Poundland eyes 50 more stores as owners seek to sell business
“We are growing strongly so we are able to leverage that volume. And we are strong enough to delist products that become more expensive and put in new products that are attractive and still offer amazing value.”
Poundland’s continued growth is likely to make it an attractive target for any potential buyer which comes forward.
Advent International has appointed Close Brothers to review options for the firm, which could include a sale to another private equity firm or competitor.
Birmingham-based private equity specialist Owen Trotter, investment partner at Key Capital Partners, said retail was an attractive proposition and Poundland had a particularly robust model – which could see it sell for “certainly more than a pound”.
He said: “It seems retail is the flavour of the month for large buyout houses – there are clear growth opportunities through increasing stores now high street rents are reduced. They are cash generative and if you believe the UK economy is emerging from the recession, given that we are a nation hooked on shopping, the high street should be one of the first places to benefit.”
The last couple of months have seen a mixed picture for M&A activity in the retail sector – with deals such as the float of Superdry clothing brand owner SuperGroup going ahead.
Meanwhile there is intense competition among buyout firms in the bid to snap up arts and craft retailer HobbyCraft after Redditch-based Halfords left the race to purchase the company.
But others deals have fared less well with New Look, owned by private equity groups Apax Partners and Permira, scrapping its flotation plans in February just days after Matalan called off its attempted sale to private equity buyers – who balked at the £1.5 billion asking price.
