Poundland reportedly seeking rent reductions on 500 stores as part of rescue plan

Reports in national media say the discount retail chain, which has over a dozen stores in the Black Country and also runs outlets in Telford, Newport and Shrewsbury, has also identified around 200 loss-making stores have reportedly been identified for closure as part of the plan.

A spokesperson for Poundland said no announcement had been made regarding store closures, and described the reports as "speculative".

The news comes as the business prepares to be sold off by owners Pepco Group, a deal which could take place as early as September.  Distressed investors Hilco and Gordon Brothers are believed to be the final two bidders after Modella Capital dropped out of the process last month.

Hilco is the former owner of HMV and Homebase, and retail investment firm Gordon Brothers are the former owners of Laura Ashley.

According to the reports, any potential new owners would be required to invest up to £100m to stablise the business, with the new owners also expected to take on a recovery plan drawn up by Managing Director Barry Williams.

Last month in a trading update, Pepco slashed its full-year earnings forecast for the chain, now expecting between £0m and £16.8m, significantly lower than earlier guidance of up to £59m.

“The focus of the group and advisers is currently on a potential sale of Poundland. This is an ongoing process and no final decisions have been taken,” a Pepco Group spokesperson said.

Poundland revenues dropped by 6.5% to 985 million euros (£830 million) for the six months to March, compared with a year earlier.

Poundland was originally hailed as one of the region's biggest retail success stories, having began as the brainchild of father and son market traders Keith and Steve Smith, from Willenhall, who created the business with fellow former market trader Dave Dodd.

The firm opened its first store in Burton-On-Trent in December 1990, but today operates 825 stores in the UK and employs around 16,000 people.

The company was sold to current owners Pepco in 2016 for £610 million.

However Pepco said its efforts to integrate Poundland into it's wider brand had failed, adding that it had become clear over the last 12 months that the plan had not delivered for either customers or shareholders.

Stephan Borchert, chief executive of Pepco, said: “At Poundland, trading remains challenging, which is reflected in a profit outturn below expectations for H1 and a weaker outlook for the full year.

“Barry Williams, who was reappointed as Poundland managing director in March 2025, and his team are actively driving a recovery plan to help turn around the business by refocusing on its traditional core strengths.”

At it's Capital Markets Day investor event in March, Mr Borchert confirmed the group was exploring "actively exploring separation options" for Poundland - previously described as one of the Midlands biggest business success stories.

Earlier this year the Willenhall-based brand reported poor festive trading, a period which saw sales plummet by 9.3% for the three months to December 31, with like-for-like sales down 7.3%, with weaker clothing and general merchandise sales blamed for the dip.

In January, the company said it was taking “immediate measures” to turn around the performance of the UK discount chain after a sharp drop in sales - including an increase in the number of products it sells for £1 or less as part of efforts to get the chain “back on track”.