Poundland owner undergoes rename & keeps float or sale possibility open

3050
Poundland owner Pepkor renames to Pepco & reveals growth plans
Pepco Group, the new name of Poundland's parent company, insists it's financially independent from crisis-stricken Steinhoff, which owns Pepco, Harveys & Bensons for Beds.
// The owner of Poundland, Pepkor Europe, has officially been renamed as Pepco Group
// Pepco also revealed ambitious growth plans, but it will only optimise existing Poundland stores in the UK
// While it kept open the possibility, it said the rename has nothing to do with plans for an IPO

The owner of Poundland has kept the door open for a possible stock market flotation or sale, but insisted its official rebrand has nothing to do with either.

Pepkor Europe today announced it has renamed to Pepco Group, as it works to improve links between its Poundland, Pepco and Dealz retail businesses across Europe.

Pepco, which is based in the UK and is in turn is majority-owned by South African conglomerate Steinhoff, said the rename had “nothing to do” with immediate IPO plans.

The firm also said it completed paying off debts to Steinhoff to become financially independent from the global retail giant, which also owns Bensons for Beds and Harveys.

Chief executive Andy Bond said “who knows what will happen” when asked about a future sale of Pepco or a stock market flotation, but said its future was in the hands of Steinhoff.


READ MORE:


Steinhoff has previously said a restructure based on selling off assets in order to cut debt after a $7.4 billion (£6.1 billion) accountancy scandal in 2017 was “the only way” for the company to stay alive.

Steinhoff acquired Poundland for £610 million in 2016 and placed the retailer under the umbrella of Pepco, or Pepkor as it was known at the time.

It remains a majority shareholder of Pepco, and Bond conceded that Poundland had faced difficulties with some UK suppliers over securing credit insurance due to its relationship with Steinhoff.

However, both he and chief financial officer Nick Wharton insisted that Pepco was financially independent of its South African parent, especially after it recently secured a €475 million refinancing deal.

Pepco also forecast an 18 per cent uptick in operating profit for the year ending September 30 and revealed ambitions to grow its pan-European store estate from almost 2700 to over 4000, by adding up to 300 new stores per year over the next five years.

However, these new stores will primarily be with its Pepco fascia in central and eastern Europe, as well as an acceleration of the the roll-out of Dealz.

In the UK, Pepco said it would keep its Poundland store count “fairly flat” over the next five years and instead focus on optimising its existing estate, such as further rolling out its Pep&Co clothing concessions within the stores.

“We’re moving [Poundland] progressively away from just single price to multi-price retailer,” Bond said.

“Our key focus there is on not opening shops but optimising where our shops are and what size the shops are.”

Bond also insisted that Poundland was profit-making during the full year period.

However, chief financial officer Nick Wharton said Pepco was looking to trim costs either through rent reductions of around 25 per cent when leases come up for renewal, or end leases in order to relocate stores to larger retail premises.

Wharton added that Pepco could save up to €20 million (£17.8 million) through rent negotiations over the next five years.

Bond said around 80 per cent of Pepco’s business is outside of the UK.

Click here to sign up to Retail Gazette‘s free daily email newsletter