Pepco mulls strategic options for struggling Poundland

Following a lacklustre financial year at Poundland, the UK discount retailer has now come under the lens of its parent company, Pepco Group, which is hoping to initiate a turnaround in its performance.

Speaking to Reuters, Pepco’s new chief executive officer, Stephan Borchert, said the company was looking into “every strategic option” for the Poundland business, which caused a reported 775 million euro non-cash impairment charge for the group due to its weak performance.

As such, Borchert told the media outlet: “It is important to look at every strategic option for this company to bring it back on track.”

When asked if Poundland would stay in the Pepco Group, Borchert said more information on the group’s strategy would come when he hosts a Capital Markets Day on March 6.

His comments come after Poundland posted a like-for-like sales drop of 3.6 percent in 12 months to September 30, while its underlying earnings declined 21.5 percent to 153 million euros.

Borchert said the company “continued to face headwinds” in the new financial year, with sales for clothing and general merchandise declining following a transition to Pepco-sourced product ranges at the beginning of the year.

He continued: “With the transition to the Pepco ranges, I think the business lost a bit of its DNA, so we are working now as a team there to bring this back.”