Poundland owner Pepco Group said it will consider “every strategic option” for the struggling discount chain.
The group’s chief executive Stephen Borchert told Reuters the business was looking at its options “to bring [Poundland] back on track” after it booked a £675m impairment charge on its UK subsidiary due to a weaker performance against increasing competition and cost challenges.
When asked if Poundland would stay in the group, he said he would say more on the group’s strategy for the discount chain at Pepco’s Capital Markets Day on March 6.
Poundland’s profitability more than halved as underlying EBITDA dropped 62% to £23m (€28m) in the year to September as sales remained flat at £1.64bn (€2bn).
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Borchert told the publication that Poundland “continued to face headwinds” in its new financial year, as sales continued to fall in clothing and general merchandise following the transition to Pepco-sourced product ranges.
“With the transition to the Pepco ranges I think the business lost a bit of its DNA, so we are working now as a team there to bring this back,” he said, referencing the reintroduction of more products priced at £1 in Poundland.
Earlier this year, Retail Gazette revealed the discount chain was restructuring its head office in Walsall and had put 60 jobs under consultation across its supply chain, finance, IT and property teams as it looked to cut costs across the business.
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