Pepco reportedly calls in advisors to explore ‘radical options’ for Poundland

Pepco Group, the Polish owner of budget store chain Poundland, is believed to have appointed advisory firm AlixPartners to address an ongoing sales slump at the firm.

According to Sky News, Pepco has hired consultants to explore “radical options” for Poundland, with a formal restructuring plan or a potential sale of the business said to be among those on the preliminary table. A company voluntary arrangement (CVA) is also being floated.

Sources close to Pepco told the media platform that no decisions had yet been taken, and the current focus was to improve Poundland’s cash performance as well as revive the retailer’s customer proposition.

In December, Pepco’s new chief executive officer, Stephan Borchert, had already publicly discussed the group’s intention to explore “every strategic option” for the Poundland business, which had caused a reported 775 million euro non-cash impairment charge for the group due to weak performance.

Evidence of its struggles continued throughout the third quarter of last year, with like-for-like sales dropping 7.3 percent over the period, largely due to continued underperformance in clothing and general merchandise.

A spokesperson for the group said, among other things, that it was refocusing on Poundland’s “long-time strengths”, such as increasing the number of core items at one pound. Pepco further stated that getting the UK business back on track was a key priority for the group.

Both Pepco and AlixPartners declined to provide a comment to Sky News.