The proprietor of Poundland, one in all Britain’s greatest low cost retailers, has drafted in Metropolis advisers to discover radical choices for arresting the rising disaster on the chain.
Sky Information has learnt that Pepco Group, which has owned Poundland since 2016, has employed consultants from AlixPartners to deal with a gross sales droop which has raised questions over its future possession.
Metropolis sources mentioned this weekend that the disaster would immediate Pepco to discover extra basic for Poundland, together with a proper restructuring course of that might immediate important retailer closures, and even an try and promote the enterprise.
AlixPartners is known to have been formally engaged final week, with choices together with an organization voluntary association or restructuring plan mentioned to have been floated by a variety of advisers on a extremely preliminary foundation.
Sources near the group mentioned no selections had been taken, and that the instant focus was on bettering Poundland’s money efficiency and reviving the chain’s buyer proposition.
A sale course of was not underneath method, they added.
Poundland trades from 825 shops throughout the UK, competing with the likes of House Bargains, B&M and Poundstretcher, in addition to Britain’s main grocery store chains.
Final 12 months, the British discounter recorded roughly €2bn of gross sales.
It employs roughly 18,000 individuals.
Earlier this week, Pepco Group, the Warsaw-listed retail big which additionally trades as Pepco and Dealz in Europe, mentioned Poundland had seen a like-for-like gross sales droop of seven.3% through the Christmas buying and selling interval.
In its buying and selling assertion, Pepco mentioned that Poundland had suffered “a tougher gross sales setting and client backdrop within the UK, alongside margin stress and an more and more larger working value setting”.
“We count on that the hardest comparative quarter for Poundland is now behind us – the identical quarter final 12 months represented a interval previous to the adjustments made inside our clothes and GM [general merchandise] ranges – and due to this fact, we count on the unfavourable gross sales efficiency for Poundland to reasonable as we transfer via the 12 months.”
It added that Poundland wouldn’t enhance the scale of its retailer portfolio on a web foundation through the course of this 12 months.
“We’re persevering with a complete evaluation of Poundland to get well buying and selling and get the enterprise again to its core strengths, together with endeavor an intensive evaluation of all prices throughout the enterprise, in addition to evaluating its general aggressive positioning,” it added.
The appointment of AlixPartners got here a number of weeks after Stephan Borchert, the Pepco Group chief govt, mentioned he would think about “each strategic possibility” for reviving Poundland’s efficiency.
He’s anticipated to set out formal plans for the way forward for Poundland, together with the remainder of the group, at a capital markets day in Poland on 6 March.
Among the many measures the corporate has already taken to halt the chain’s declining efficiency have been to extend the vary of FMCG and normal merchandise merchandise bought at its conventional £1 price-point.
Poundland’s disaster contrasts with the well being of the remainder of the group, with Pepco and Dealz each displaying sturdy gross sales development.
A spokesman for Pepco Group, which has a market capitalisation equal to about £1.7bn, declined to remark additional on the appointment of advisers
AlixPartners additionally declined to remark.
