Dealz-Poundland to sell shares that may value discount retailer at €5bn                

A Dealz store in Clonakilty, West Cork, one of almost 100 outlets in the Republic. Photo: Andy Gibson

The owner of Dealz-Poundland in Ireland and Pepco in Poland plans to list its shares as part of a long-delayed spin-off that may value the discount retailer at €5bn.                           

Its ultimate parent, South African retail group Steinhoff had long eyed spinning out its discount grocery, confectionery, and clothing retailer in Europe but was engulfed by an accounting scandal about four years ago. 

In the Republic where it trades under the Dealz name, Pepco has almost 100 outlets since it first opened a decade ago, and in the North, where it is known as Poundland, it operates from over 30 stores. Its clothing range Pep&Co competes with Penneys-Primark.  

Across Europe, it has a total of 3,200 stores, including a large presence in Romania, Hungary, the Czech Republic, as well as in Poland where it has more than 1,000 stores. 

It is no surprise that Steinhoff has chosen Warsaw over London to sell shares in its Pepco European unit. Earlier this month, Reuters reported that Pepco could be valued at around €5bn in any shares sale. 

Pepco is led by Andy Bond, a former chief executive of Britain's Asda supermarket chain.  Parent group Steinhoff is still battling the fallout from a 2017 accounting scandal. It said it would sell at least 15% of Pepco's shares. 

"We are strongly positioned to deliver significant long-term growth, given our market-leading customer proposition in the most attractive sector of retail," said Mr Bond.

Pepco has appointed Richard Burrows, chairman of British American Tobacco, as its chair and will appoint four other non-executive directors.

Its trading update for the six months to the end of March 31 showed revenue grew 4.4%, helped by 225 new stores. 

However, like-for-like revenue fell 2.1%, due to Covid store closures. 

Additional reporting Reuters