Poundland’s owner has said it is considering putting the chain up for sale after warning tax changes coming in April will put more pressure on the business.
The discount chain has 825 UK stores but sales were down this January and February, its Polish owner Pepco Group said.
A rise in employer National Insurance (NI) contributions announced in the Budget start in April and Pepco says these will “add further pressure” to Poundland’s costs.
A host of High Street brands have warned of shop closures, job losses and price rises as a result of rising costs, but Chancellor Rachel Reeves has defended the NI increase as “the right decisions in the national interest”.
Pepco Group said Poundland was “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,” it added.
Retailers have been among the most vocal of businesses criticising the NI increase and the rise in the minimum wage, which will both happen in April.
Tesco, Amazon, Greggs, Next and dozens of other chains last year wrote to the Treasury urging it reconsider some of the Budget measures.
The government has defended the tax rise as necessary to avoid cuts to public services.
The Pepco Group, which owns Pepco and Dealz stores in Europe, is making a profit so is looking at ways to separate itself from Poundland “including a potential sale,” it said.
As part of the plans, former Poundland managing director Barry Williams, who took over as managing director of Pepco in September 2023, will return to his Poundland role.
Stephan Borchert, chief executive of Pepco Group, told Reuters there are “definitely interested parties for this business” and said he was confident Poundland’s future would be decided by September this year.
“Definitely we’re looking at all options but a sale is possibly a very good option since we believe that the business will do better with a new owner,” he said.
Pepco Group said its “ultimate ambition” is to operate under the single Pepco brand, focusing on its more profitable higher clothing and general merchandise ranges. It is also considering separating out the well-performing Dealz Poland.
