Pepco Group proceeds with Poundland's exit process with selected group of bidders, says CEO

"The group is still very actively exploring options to exit the Poundland business. We expect this to happen by the end of the 2025 fiscal year," CEO Borchert told PAP Biznes.

"The process is confidential so I can't give any more information. What I can say is that we are progressing with a selected group of bidders in this process, and we are very determined to see this through. We will keep the market informed, we are making progress," he added.

Pepco Group's CEO reported that the first effects of the remedial measures at the chain are being seen.

"At Poundland, we are making changes in terms of pricing and assortment, we are introducing a lot more products at lower prices (...). There are some promising signs, but with over 800 shops, it will take time to reverse the negative trends," he said.

In March, the group announced that it was actively considering all strategic options to spin off Poundland from the group in the 2025 financial year, including a potential sale.

The ground behind this decision was the group's aim to move away from selling the fast-moving consumer goods (FMCG) category and ultimately operate under a single Pepco format, focused on our higher-margin Pepco-branded clothing and everyday products.

Poundland's results for the first half of 2025 financial year remain weakened, the company reported. LFL sales were down 7.3 percent, and the chain continues to struggle with Pepco's sourced range.

The group maintains that revenue and underlying EBITDA (IFRS 16) for the Pepco brand on an annualised basis will grow at a high single-digit rate in the 2025 financial year. In the case of Dealz, the guidelines point to an approximately EUR 30 million EBITDA (IFRS 16).

"We are very satisfied with H1 performance of Pepco and Dealz, they are both delivering on objectives we set out. Pepco, our key growth and profit engine, delivered revenue growth of 9.3 percent and also achieved the second consecutive quarter of positive like-for-like with 2.3 percent year on year," CEO Borchert said.

"The implementation of the strategic pillars I presented at the Capital Market Day is well underway. We remain committed to also reposition our group with a focus on Pepco as a single future format," he added.

The CEO said that the group is very positive about continuing the positive trend in Pepco's LFL sales throughout the year.

Asked about the third quarter, he replied: "We had a very good start in April in Pepco and Dealz. We continue to be very positive for the quarter. For Poundland, it's a very slight improvement. The actions we have taken there around the model stores are showing first improvements, but it remains under pressure."

The CEO assessed that, given the global geopolitical and economic situation, the consumer sentiment is highly mixed.

"I believe this is playing in our cards. We continue to be in a very strong price leadership situation and consumers see that. We see strong volume growth," he pointed out.

The group's target for 2025 is to open approximately 250 new shops, with the new shop openings focusing on the Pepco brand, primarily in the CEE region. In the first half of the year, the group opened 101 net new shops, which translates into 5,049 shops in operation.

As the CEO reported, the second half of the year is always stronger in terms of openings.

"We want to open 250 stores per annum at least. We always open more stores in the second half of the year. Will we fully reach 300? I am not sure yet. We want to have a stricter capital allocation policy, and we want to make sure the stores will deliver their return," he told PAP Biznes.

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