Tue, 07 May 2013 | BUSINESS SALE
Warburg Pincus is mooting a sale of cut price retailer Poundland, which could generate as much as £600 million for the US venture capital owner.
Warburg bought the retail chain for £200 million in 2010 and is now looking at a sale or flotation of the business in 2014. An auction is considered to be highly likely.
The strongly performing business has 450 outlets and has plans to increase this number to 1,000 shops over the next five to ten years. It opened 60 stores last year and has said that it will open the same number this year.
Established in 1990 by Dave Dodd and Stephen Smith with the opening of its first shop in Burton-upon-Trent, Poundland was later purchased by Advent International in 2002 for £50 million. Under this new ownership, the retailer grew from 70 stores to 260 and its workforce from 3,000 to 7,000. This year the business is set to take on a further 2,000 staff, which will take the workforce total to 14,000.
Poundland, which has the former Tesco director Andrew Higginson as its chairman, has stuck to its promise of selling every item for £1, which is increasingly popular with cash-strapped consumers two decades on.
Its sales reflect its strong growth with £780.1 million reported for last year, up from sales of £518.4 million for 2011. Its pre-tax profits increased from £10.4 million in 2011 to £18.2 million in 2012.
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