UK discount retailer Poundland can prosper even as the country’s economy moves into a phase of fully-fledged recovery, the company’s new owner said today (4 May).
US private-equity group Warburg Pincus has acquired a majority stake in Poundland, the general merchandise retailer that sells over 3,000 items for GBP1 each.
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Poundland has thrived in the last 18 months as cash-strapped UK shoppers looked to discount retailers for greater value.
However, while the likes of Aldi, Lidl and Netto have seen the early buoyant sales growth they enjoyed in late 2008 and early 2009 fade, Poundland has benefited from the demise of Woolworths plc.
In a further sign of its confidence, Poundland is planning to open 50 stores this year as the retailer looks to take its annual sales to around GBP700m (US$1.06bn) in 2011.
A spokesman for Warburg Pincus said Poundland did not need recession to drive its sales. “It’s really when the economic cycle is better that it performs best,” the spokesman told just-food.
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By GlobalData“Warburg Pincus is a growth investor and this is exactly in line with its strategy; it’s right in its sweet spot.”
Poundland’s management, led by chief executive Jim McCarthy, will take a minority stake in the business, which had been owned by another private-equity firm, Advent International, since 2002.
Financial details of the transaction were not disclosed, although reports in the UK have suggested Warburg Pincus struck a deal for around GBP200m.
Food makes up around 30% of sales at Poundland, which has around 260 stores in the UK.
