Poundland owner weighs break-up of retailer it bought for £1
A flurry of bids for just some of Poundland’s 600 shops could prompt Poundland to consider a break up of the retailer, City AM understands. US investment firm Gordon Brothers initially sought offers for the entirety of the business, but may instead opt to sell Poundland’s stores to a number of different buyers, sources told [...]
A US investment firm, Gordon Brothers, is considering breaking up the retailer Poundland, which it purchased for just £1 over a year ago, according to City AM. The company has initiated a sale of its 600 shops, seeking bids for either the entire business or individual stores. Gordon Brothers demanded £30m from buyers to cover a pre-existing loan inherited from Poundland's previous owners, Pepco.
A consulting firm, Alvarez & Marsal, is managing the sale, with a deadline of Monday for final offers. Several parties, such as Modella Capital, TG Jones, and Fortress, are expected to submit bids for the whole business or numerous stores. Poundland's management, led by Andy Bond, a former Asda boss who previously led Poundland from 2016, is also preparing a bid to acquire the company.
The management buyout is being pursued by Poundland's management, with the aim of preventing uncertainty from affecting the firm's trading during the critical Christmas period. One insurer has already withdrawn coverage for some of the retailer's suppliers, potentially causing supply issues. Poundland has faced challenges in recent years, including a £85m pre-tax loss and a 12% drop in sales, but its current owners believe the company's turnaround is underway.
Poundland reported a 3.3% increase in like-for-like sales over the past three months and is projected to surpass last year's earnings by £80m.
Written by urgent.news from City AM's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
