Poundstretcher owner Fortress Investment Group is in talks over a potential takeover of Poundland.

Fortress is understood to be in discussions with Poundland owner Gordon Brothers as the latter presses ahead with an auction of the value chain, according to The Telegraph.

It is understood that Fortress is not considering a merger of the two brands at this time.

Advisers at Alvarez & Marsal are engaging with Fortress alongside a handful of other interested parties, with discussions over a potential deal understood to be at an early stage.

A management buyout is also among the options being explored for Poundland.

Gordon Brothers launched a formal sale process for Poundland earlier this month, just over a year after acquiring the retailer from Pepco Group for a nominal £1.

The restructuring specialist appointed Alvarez & Marsal to oversee the auction and is looking to secure a deal before the crucial Christmas trading period, with initial bids expected in early October.

TGJones and Hobbycraft owner Modella Capital has also emerged as a potential suitor for Poundland, while strategic and financial investors are expected to consider bids.

Poundland has undergone a major restructuring since Gordon Brothers took control, shutting roughly 200 stores and reducing its estate to about 600 locations.

The discounter has also sought to revive its value credentials by returning more products to its signature £1 price point and simplifying grocery pricing around £1, £2 and £3 tiers.

The potential buyer has itself recently overseen a rescue of Poundstretcher.

Fortress, which acquired Poundstretcher in 2024, secured High Court approval for the retailer’s restructuring plan in June after 93 per cent of voting creditors backed the proposals.

The deal was designed to reduce property costs across its store estate and avoid administration, with the retailer saying at the time that its roughly 300-store network and 3,000 jobs had been protected.

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