Slaughters and DLA bag roles on bargain bin £1 Poundland buyout

In something of an ironic turn, discount retailer Poundland has been sold to US-based investment firm Gordon Brothers for £1, staying true to its namesake reputation as the champion of one-pound deals.

The deal involves a major restructuring, including a substantial cash injection by Gordon Brothers to turn the struggling retailer around.

The deal

Poundland, which operates over 800 stores across the UK and employs around 16,000 people, was acquired by Polish firm Pepco in 2016.

But after facing tough competition from other discount chains and mounting financial pressures including heightened wage costs, Pepco has decided to sell the retailer.

The buyer, Gordon Brothers, is a turnaround specialist with plenty of experience supporting struggling UK retailers. Recent efforts include the rescue of fashion brand Laura Ashley after the company entered administration in 2020.

As part of the deal, Gordon Brothers plans to inject £80 million into Poundland to support its turnaround. The restructuring plan will be put forward for High Court approval in the coming weeks.

Advising

A Slaughter & May team led by restructuring partner Ian Johnson and corporate partner Alex Dustan advised Pepco on the sale and restructuring plan. They were supported by banking partner Susan Hughes.

DLA Piper advised Gordon Brothers on both the acquisition and associated financing to turn Poundland around. The DLA team was led by restructuring head Rob Russell and also included partners Jonathan Richards, Joseph Frew and Gavin Smith.

Neither Slaughters nor DLA are strangers to their respective clients. Slaughters previously advised Pepco's management on its £4.4 billion IPO on the Warsaw Stock Exchange in 2021, while DLA guided Gordon Brothers on its sale of Laura Ashley in 2024.