Through its 2010 investment in discount store chain Poundland, Warburg Pincus helped transform Poundland into the largest single-price value retailer in Europe by both sales and number of stores. In partnership with management, Warburg Pincus almost doubled store numbers in the space of four years, attracted new types of customer and supported the company’s move into Europe.
The company operates under the “Poundland” brand in the UK, where it sells branded and own label products at the single price point of £1, and under the “Dealz” brand in Ireland, where it sells the vast majority of its products for €1.49. Poundland opened its first store in 1990 and has grown to operate a network of over 500 stores across the UK and Ireland, with a long-term target of operating over 1,000 stores in the UK. In 2014, Poundland floated on the London Stock Exchange.
Under private equity ownership, we have continued to grow the business both in the UK and also by entering the Irish market. This growth, supported by Warburg Pincus, has enabled us to both deliver strong financial performance and also create almost 1,500 jobs in the last year.
Jim McCarthy CEO, Poundland
What did the business need?
- Clear plan and shareholder support to accelerate the growth of the business
- Support to expand the business beyond the UK
- Help with improving reporting and management systems appropriate for a public company
How did private equity backing create lasting value?
- Developed UK expansion roadmap; over 250 new stores opened; target of 1,000 in the UK
- Strengthened infrastructure, including investment in distribution to support store growth
- Entered the European market with establishment of the Dealz brand in Ireland
- Positioned Poundland to appeal to middle-class shoppers
- Strengthened the board
What outcomes did private equity investment achieve?
- Grew the number of stores from 283 to in excess of 500
- Opened first store in Ireland in 2011; there are now over 30 stores there
- Opened a new 200,000sq ft distribution centre in 2012 in Hoddesdon, creating 250 jobs
- Piloting further European expansion with ten trial stores opening in Spain
- Increased employee numbers from 7,000 to 11,757
Grew sales by 73% over three-year period