Poundland news: is iconic pound bargains shop closing down as brand for sale - at risk store locations

• Poundland, with 825 stores, is considering a potential sale due to challenging market conditions
• Pepco Group, its owner, is reviewing strategic options amid rising costs and tax changes
• Speculation surrounds possible store closures or restructuring if the business changes hands
• Government budget measures, such as tax hikes and minimum wage increases, are adding pressure on operations
• Poundland may undergo significant changes, including potential store closures or acquisitions

An iconic “everything for a pound” high street chain with 825 stores, could be facing a major shake-up as it considers a potential sale.

Poundland has enlisted advisers from Teneo to oversee the sale process amid speculation that some locations may close if the business changes ownership.

The news follows the recent announcement that Pepco Group, the owner of Poundland, is exploring a sale due to challenging trading conditions.

Based in Poland, Pepco revealed it is reviewing "all strategic options" for Poundland, particularly in light of upcoming UK Budget measures that will significantly raise wage costs.

Read more: Sale of UK pound bargains firm explored as Pepco faces uncertainty

But in recent years, Pepco has been shifting its focus toward its more profitable Pepco brand, as it warns of weaker annual earnings for Poundland, which is facing rising costs and tough market conditions.

Pepco said: “Poundland is a strong brand that serves millions of customers every week and had around two billion euros (£1.67 billion) in annual turnover in financial year 2024, but it is also operating in an increasingly challenging UK retail landscape that is only intensifying.

“From April 2025, the UK Government’s additional tax changes announced in the Budget will also add further pressure to Poundland’s cost base.

“Therefore the board is actively evaluating all strategic options to separate Poundland from group during financial year 2025, including a potential sale.

Retailers have been impacted by measures announced in the October 2024 Budget, such as a national insurance increase and a rise in the minimum wage, both set to take effect in April 2025.

The national insurance rate is set to rise from 13.8% to 15%, while the threshold for employers to start paying will drop from £9,100 to £5,000 annually.

At the same time, the minimum wage will increase by 6.7%, with rates rising from £11.44 to £12.21 per hour for those aged 21 and older, from £8.60 to £10 for ages 18-20, and from £6.40 to £7.55 for under-18s and apprentices.

Poundland, known as a go-to destination for bargain shoppers, currently operates 825 outlets across the UK. A potential sale could result in significant changes, with the possibility of store closures if a buyer opts to streamline operations and reduce costs.

On the other hand ,n acquisition by a larger retailer could inject the investment needed to bolster Poundland’s position in the UK market.

A personalised morning news round-up with NationalWorld Today - sign up here.

Which stores are most at risk?

While no official announcements regarding store closures have been made, there are certain factors that could influence which Poundland stores might be at risk in the event of a sale.

Stores in areas with low foot traffic or weak sales figures are likely to be considered for closure or downsizing. If certain locations consistently fail to meet revenue targets, they could be seen as less viable for a new owner.

High rent costs or difficult lease agreements could also lead to store closures, particularly in areas where commercial property prices are high. A new owner might look to streamline operations by shutting down stores with less favourable lease terms.

If Poundland has multiple stores in close proximity in certain regions, some may be redundant or less profitable compared to others. A buyer might consolidate these locations to reduce costs.

Locations in rural or low-density areas may also face higher risks of closure, as these stores may struggle with limited customer bases, especially if the market for discount retailers is weaker in those areas.

Stores in older, outdated retail parks or shopping centres that are not part of the modern retail landscape might be seen as less appealing for future investment, and as such, could be more vulnerable to closure.

What do you think about Poundland's potential sale and the impact on its stores? Do you think closures are inevitable, or could a new owner bring fresh opportunities? Share your thoughts and opinions in the comments section.