Modella Capital has emerged as a potential bidder for Poundland, as the discount chain’s owner Gordon Brothers prepares to launch a sale process.
The retail investor, which acquired TGJones earlier this year, is being sounded out over its interest in the British value retailer, according to Sky News.
Industry sources said Modella had not yet committed to making an offer, although it could be seen as a logical buyer after purchasing Dealz, Poundland’s former sister chain in Poland, several months ago.
Gordon Brothers, which has owned Poundland for just over a year, has appointed Alvarez & Marsal to oversee an auction of the business, with a formal sale process expected to launch within weeks.
The restructuring specialist acquired Poundland from Pepco Group for a nominal £1 last year, in a deal that triggered a major overhaul of the retailer’s store estate.
Poundland currently trades from around 600 stores across the UK and employs approximately 12,000 people.
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The prospective sale comes after around 200 stores were closed as part of last year’s restructuring programme, which followed months of uncertainty over the discounter’s future.
People close to the business have insisted Poundland’s financial performance has improved since the restructuring, although another change of ownership would add fresh uncertainty for the high street chain.
In January, Poundland managing director Barry Williams said the business was “on the right track” after coming close to collapse, as it focused on rebuilding its value proposition and simplifying its offer.
Before the restructuring, Poundland operated a larger estate and employed more than 14,000 people, serving millions of shoppers across the UK each year.
Modella’s potential involvement would put another turnaround investor in the frame for one of Britain’s best-known discount retailers, as value chains continue to navigate pressure from weak consumer confidence and rising operating costs.
Modella and Poundland declined to comment.
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3 Comments. Leave new
Its all gone so well with the Smith and Jones purchase, lets hope the outlaws do a better job with Poundland
disgrace that Modella cannot manage TG Jones after a short period but has cash ? to buy Poundland ? Makes no sense after all Modella’s complaints
If sold to Modella no doubt landlords will be asked to take up to 75% hit on rental income for the next 3 years and unsecured creditors asked to write off 100% of debt