Hundreds of Poundland stores are at potential risk of closing down as the discount retailer has been put up for sale by its owner Pepco Group.
The parent company blamed an "increasingly challenging UK retail landscape" for the popular chain's poor performance on the high street.
In recent years, Britain's economy has been hit by a wave of store closures with research from PwC suggesting 38 sites a day shut down last year.
The Polish-headquartered company announced today it is "actively evaluating all strategic options" to separate Poundland from the group during the 2025 financial year.
Pepco described the 825-store chain as "a drag on the group's financial performance" with lower profits and growth compared to its other operations.
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Poundland is up for sale, potentially putting hundreds of locations at risk
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Poundland's revenues slid by 9.3 per cent for the three months to December 31, with like-for-like sales down 7.3 per cent, as it experienced weaker clothing sales.
The company was forced to take a huge writedown on the value of Poundland, resulting in a loss of more than £450million.
Last month, the discount retailer announced plans to increase the number of products it sells for £1 or less in an effort to get the chain "back on track" amid increasing competition from rivals such as B&M.
Pepco warned that Poundland's annual underlying earnings will be between £41.7m and £58.6m as sales remained negative throughout January and February.
Furthermore, the company said Poundland had around £1.67billion in annual turnover in the 2024 financial year.
"From April 2025, the UK Government's additional tax changes announced in the Budget will also add further pressure to Poundland's cost base," Pepco stated.
Retailers have been particularly hard hit by measures in last October's Budget to increase national insurance contributions and the minimum wage.
Stephan Borchert, CEO of Pepco Group, said: "The Board and I are actively exploring separation options for Poundland, including a potential sale, from the Group, with consideration also given to the separation of the well-performing Dealz Poland over the medium term."
"We are taking clear strategic action to focus on the Pepco brand as our single future format, to move away from FMCG and create a simpler business focused on higher margin clothing and general merchandise," he added.
Poundland was founded in 1990 by Dave Dodd and Steven Smith, initially selling all items at the single price of £1. The chain began with a single location in Burton-upon-Trent but expanded rapidly, reaching its 100th store by 2003.
It acquired rival 99pStores in 2015 and began selling items for more than £1 from the mid-2010s onwards. As part of the potential sale preparations, former Poundland managing director Barry Williams will return to his previous role after serving as managing director of Pepco since September 2023.
Borchert expressed confidence in Williams' return to Poundland, stating: "Barry Williams did a great job as managing director of Pepco, returning it to like-for-like sales growth, and I am confident he will play a pivotal role in getting Poundland back on track, given his previous success there."
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High streets have been hit by a wave of store closures in the last 10 yearsPAPepco also revealed it will look at options to offload its Dealz business in Poland in the medium term. The group is reviewing its Pepco chain in Germany as part of its strategic overhaul.
Pepco said it had previously "sought to integrate the operations of its three brands" with the aim of moving to "a simpler business model with one brand, one range and one team."
However, the company admitted that "this integration has not delivered for customers or shareholders" over the last 12 months.
The group now plans to focus on its Pepco brand, which it described as "the engine of the Group's earnings potential" with a "compelling 'white space' opportunity to drive further profitable growth."
Pepco's strategic shift comes as it acknowledges the challenges facing UK high street retailers are "only intensifying". The company will now concentrate on its more profitable European operations where it sees stronger growth potential.
