Deals Review – June 2015

Friday 12th June 2015

In partnership with the Business Desk, several of our experts will comment on significant deals every month. For June our Retail expert, Andy Brian, takes a look at Poundworld’s reported £150 million acquisition of a controlling stake by US private equity house TPG which finally came to fruition last month.

This demonstrates the outstanding success of value retailers during the last few years in particular.

Poundworld is a stand-out entrepreneurial success story, having grown from a Wakefield market stall in 1974 to a household name retailer with 280 stores and millions of customers across the country today. The majority of that growth has come within the last decade, Poundworld having opened its first high street store in 2004.

The growth of value grocers such as Aldi and Lidl, at the expense of the traditional “Big Four”, is well documented and here to stay. The Poundworld deal is further evidence that this trend is not exclusive to food retail.

According to recent figures 57 per cent of UK adults are using discount shops like Poundworld and its rivals on a weekly basis, up from 36 per cent a year ago.

The outstanding success of rivals B&M, Poundland’s proposed acquisition of 99p Stores, and even suggestions that retail heavyweight Mike Ashley is considering an assault on the general merchandise sector, are all indicative that this trend in consumer spending habits will continue on an upward trajectory. Certainly this deal demonstrates that TPG are confident that Poundworld’s growth will continue at pace.

Previous deals reviews: