Bidding war brews for Poundland as more buyers join the race

The race to acquire Poundland is heating up, with a growing number of potential buyers preparing to submit takeover bids for the Walsall-based discount retailer.

Private equity firm Modella Capital, owner of The Original Factory Shop and WHSmith’s high street business, has progressed to the second phase of the auction process, according to Sky News.

Modella, which is actively involved in retail turnaround efforts, including recent CVAs for Hobbycraft and TOFS, is said to be seriously considering a formal bid.

Turnaround investor Endless, Hilco Capital (now owner of Lakeland), and Alteri Investors, which owns Bensons for Beds, were reportedly in the running at the end of April. 

Poundland’s parent group, Pepco Group, confirmed in March it was exploring a sale of the struggling retailer to refocus on its core Pepco brand.

Despite the chain generating over £1.67bn (€2bn) in revenue last year, persistent losses have weighed heavily on the group’s performance.

The company logged a £649m (€775m) impairment for Poundland, contributing to a £548m (€662m) group-wide net loss.

The British discount chain, which operates 825 stores, has faced rising operating costs, a tough consumer environment, and higher employer taxes following the government’s October budget.  Pepco is being advised by Teneo on the sale.