Poundland could be sold as taxes increase, says the owner

The owner of Poundland said he was planning to put the chain for sale after changes in the warning tax to come in April exert more pressure on the company.

The reduction chain has 825 stores in the United Kingdom, but sales decreased in January and February, said its Polish owner Pepco Group.

An increase in contributions from the national insurance of the employer (NI) announced in the start of the budget in April and Pepco claims that this “will add additional pressure” to Poundland costs.

A multitude of street brands have warned against store closings, job losses and prices increase due to the cost increase, but a government spokesman said the Chancellor had taken measures to “support business”, including the cap of the corporate tax rate.

Chancellor Rachel Reeves previously defended the increase in Ni as “good decisions in the national interest”.

The Pepco group said Poundland “operated in a retail landscape in the increasingly difficult United Kingdom that is only intensifying.”

“From April 2025, additional tax changes from the British government announced in the budget will also add additional pressure to the Poundland cost base,” he added.

The retailers were among the most vocal companies criticizing the increase in Ni and the increase in the minimum wage, which will both occur in April.

Tesco, Amazon, Greggs, Next and dozens of other channels last year wrote to the Treasury that urged him reconsider some of the budgetary measures.

The government defended the tax increase if necessary to avoid reductions in public services.

The Pepco group, which has Pepco and Defffor stores in Europe, has a profit, so it seeks to separate from Poundland, “including a potential sale,” he said.

As part of the plans, the former managing director of Poundland, Barry Williams, who took office as general manager of Pepco in September 2023, will return to his role as Poundland.

Stephan Borchert, Managing Director of Pepco Group, told Reuters that there were “parties definitively interested in this business” and said that he was convinced that the future of Poundland would be decided by September this year.

“We are certainly looking for all the options, but a sale may be a very good option because we think that the company will do better with a new owner,” he said.

Pepco Group said that his “ultimate ambition” was to operate under the unique Pepco brand, focusing on his more profitable clothes and the ranges of general goods. He also plans to separate efficient Dealz Poland.