The discount retailer Poundland could soon be the subject of a management buyout deal if its bosses can secure the funding they’ll need to make it happen.
Reports suggest that the management team at Poundland are considering the possibility of breaking the business away from its current owner Steinhoff International.
Steinhoff is in the midst of a serious crisis brought about in large part by an accounting scandal that has led in recent weeks to the departures of its chief executive, its chairman and, in early January, its chief financial officer.
Against this backdrop, Poundland’s executive chairman Andy Bond is understood to have approached a number of private equity firms in the hope that they might fund his plans for a management-led buyout of the business.
According to the Telegraph, the turnaround specialists of Alteri have been sounded out about potentially backing the buyout, which might also involve the input of Poundland’s former chief executive Jim McCarthy.
The Telegraph is reporting that Poundland’s bosses are keen to distance the business from its parent company, which is grappling with a number of serious financial, as well as reputational and operational issues across several continents.
Several private equity firms including Advent, Bain, Clayton Dubillier & Rice, Apax, KKR and CVC are all mentioned as potential financiers of a management buyout of Poundland, which was founded in 1990 and has hundreds of stores in towns and cities across the UK.
Poundland was acquired by Steinhoff International for a sum of £610 million in July 2016, with the South Africa-based retail giant headhunting Andy Bond and appointing him as executive chairman before the end of that year.
Mr Bond’s professional history includes a stint as the CEO of Asda and for the past two years he has been leading the expansion of the low-cost fashion chain Pep&Co.
It was recently announced that Poundland would be adding to the number of its stores that incorporate Pep&Co outlets to bring the total to more than 300.
Commenting on the collaboration between the two businesses, Poundland’s UK and Ireland managing director Barry Williams said: “Who would have thought 12 months ago that we would make Poundland a must-stop fashion destination.
“Well we’re turning that ambition into reality and by the end of this year, with over 300 ‘shop-inshop’ fashion stores, we’re set to become a major fashion player.”