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5mo ago

Poundland's Struggles Lead to €775M Write-Down for Parent Company Pepco

Pepco reports a €554 million annual loss, citing Poundland's declining sales, increased competition, and rising costs from UK budget measures.

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Pepco operates 836 Poundland stores and the business makes up about 30 per cent of its total revenue

Overview

  • Pepco, the Warsaw-listed parent company of Poundland, reported a €554 million pre-tax loss for the year ending September 30, reversing a €159 million profit from the previous year.
  • A €775 million non-cash impairment charge was recorded due to Poundland's underperformance, driven by declining sales in clothing and general merchandise and increased competition in the discount retail sector.
  • Poundland's like-for-like sales fell 3.6% over the year, with overall revenues growing just 0.2%, as the company struggled to transition to Pepco-sourced product ranges.
  • Rising costs from UK budget measures, including increased employer national insurance contributions and a higher minimum wage, have added further financial pressure on the business.
  • Pepco's newly appointed CEO, Stephan Borchert, announced plans to refocus Poundland on its core strengths and reassess its competitive positioning to improve future performance.