Poundland Sold for £1 Amid UK Retail Crisis—What Went Wrong With the Budget Giant?

British discount retailer Poundland was sold 12 June for a mere £1 to American investment company Gordon Brothers, according to a press release from Poundland's parent company, Pepco. The brand was put up for sale by Pepco in March amid challenges from tougher competition and increased wage costs from the government's April tax plan, according to The Guardian. Pepco also stated a desire to focus on its more profitable brands.

'As set out during our Capital Markets Day in March 2025, this transaction will strongly support our accelerated value creation programme by simplifying the Group and focusing on our successful Pepco business,' the press release read. 'I am confident that Pepco has the right foundations to be one of Europe's most successful discount retailers, delivering customer satisfaction, profitable growth and shareholder value.'

Tough Times for the Discount Store

The sale means up to 100 locations may close, according to the BBC. Poundland currently has 825 locations across the UK and employs around 16,000 people.

Sales have slumped over the past year and were down in January and February. The government's April raise of National Insurance contributions affected the company. The previous rate meant that employers had to pay 13.8 percent on employees who earn more than £9,100 a year, however that has now changed to 15 percent on all salaries over £5,000.

Experts say that the nominal sale of the company means it has not kept up with the market in terms of popularity, although Pepco stated that Poundland was still a beloved shop. They also pointed to the fast, cheap online market as factors changing consumer's expectations.

The Future of Poundland

Poundland will still be led by current Managing Director Barry Williams, according to the press release. It will continue using the Poundland brand.

'Poundland remains a key player in UK discount retail, with millions of customers annually and a well-loved brand and proposition,' Pepco CEO Stephen Bochart said in the release. 'We want to sincerely thank all the Poundland team for their ongoing commitment and contribution to the Group and wish Barry Williams and his team all the best for the future.'

Pepco will also retain a minority investment share in Poundland.