Poundland sold: 'I sincerely hope they will stay in Walsall,' council leader reacts as discount store sale confirmed

It was announced this morning (Thursday) that the West Midlands discount chain Poundland had been sold for £1 to Gordon Brothers.

The high street bargain retailer, known for its £1 products, was put on the market earlier this year after a sharp downturn in trading.

Poland-based Pepco Group today confirmed it had completed the sale of he business which it had owned since 2016. 

The sale is expected to result in the closure of around 100 stores as Poundland undergoes a restructuring plan and its understood rent reductions from landlords will also be sought.Poundland has not communicated any further details but it's believed full details of the shake-up will be sent out to company creditors in the coming days.

The sale means an uncertain future for 800-plus stores and approximately 16,000 employees. Poundland was set up by Willenhall father and son Keith and Steve Smith who were market traders who sold it to Pepco while its headquarters remained in Walsall, with an impressive modern office in Midland Road.

Leader of Walsall Council, Councillor Mike Bird, has told the Express & Star it's "bad news for the high street" but he very much hopes the company retains its Walsall head office.

He said: "They are a big business based in Walsall and I sincerely hope their headquarters will stay there."It started in Willenhall, originally started on Willenhall Market."The company has been sold 2/3 times now."Like any business they rely on people visiting their retail shops and sadly they've suffered like everybody else. 

"No doubt there will be some store closures. It does not bode well for the high street."Poundland has a host of stores in the West Midlands close to where it all began including outlets in Wolverhampton, Walsall, Bloxwich, Willenhall, Bilston, Wednesbury, Tipton, West Bromwich, Dudley, Brierley Hill and the Merry Hill shopping centre.

Poundland was originally 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.

They had been selling items for 10p in a box on Bilston Market and this had proven successful so they set up an office in Sedgley, above the Concord Market, with a second hand fax machine, a second hand desk and a dream of making it big.They opened their first store in Burton-on-Trent on December 13 1990 and since then Poundland has grown to become one of the most popular names on the high street.

However, physical retail shops have suffered since the pandemic and the rise of online shopping and even Poundland hasn't been immune to this.

The discount retailer has faced significant competition from the likes of B&M, Home Bargains, and The Range as well as budget supermarkets like Aldi and Lidl which have popular 'middle aisles' filled with special promotions and a wide range of non food items.

In a statement about the sale of Poundland, Stephan Borchert, Pepco Group's chief executive, said: “Poundland remains a key player in UK discount retail, with millions of customers annually and a well-loved brand and proposition.

“We want to sincerely thank all the Poundland team for their ongoing commitment and contribution to the group and wish Barry Williams and his team all the best for the future.”

Pepco said the deal will help it to shift away from food and drinks, improve revenue growth and boost its profitability.

The retailer reported last month that revenues had dropped by 6.5% to 985 million euros (£830 million) for the six months to March, compared with a year earlier.

As part of the restructuring plan, Pepco will retain a minority stake in Poundland.

Poundland’s stores and employees will now be transferred to the ownership of Gordon Brothers, which owns brands including Laura Ashley, as a result of the buy out.

Black Country of Commerce's CEO Sarah Moorhouse said the Chamber would be "monitoring the situation closely" at this uncertain time for staff in the region.

She told the Express & Star: "Poundland has been a retail success story born right here in the Black Country and it's sale is obviously going to be concerning for the thousands of employees across the UK.

"My thoughts are with the head office team based in Willenhall and the many hundreds of staff employed in the company's high street stores in our region. The resilience of our Black Country workforce is well-known, but they deserve support and clear communication during this uncertain time.

"As a Chamber, we will be monitoring the situation closely and would like to see a commitment from Gordon Brothers to this region which has supported Poundland from its beginnings."