Poundland is edging closer to an overseas debut under its new owner, US private equity firm Warburg Pincus, which bought the retailer for £200m.
Jim McCarthy, the single price point retailer’s chief executive, said the timing of the move overseas had grown nearer since the acquisition, as Warburg Pincus would encourage the retailer to ramp up its expansion plans.
“It will take some time, but whatever that time is, it is closer now than it was before,” said McCarthy, who identified Continental Europe as an attractive market.
However, McCarthy said there was still plenty for Poundland to do in the UK. It plans to increase its current 260 stores to 800, in locations on the high street, in retail parks and in Northern Ireland, where it plans to have 20 shops by the end of the year.
Management retained a minority stake as part of the sale to Warburg Pincus. The share now owned by the board is understood to be between 20% and 25%.
Dave Dodd, Poundland co-founder and boss of new start-up variety chain The Hub, sold his 12% stake and no longer has a financial interest in Poundland.
McCarthy said he felt “very positive” about the sale.
He said: “Warburg Pincus has the ability to accelerate our growth plans. It’s a very good deal for all stakeholders in the business.”
The retailer expects to open 50 shops this year.
Poundland, which expects to make more than £700m in revenue in 2011, is also on track to develop a transactional website, which it will test in the “relatively near future”, according to McCarthy.
However, he added: “Bricks and mortar are our main focus.”
Previous owner Advent International, which bought sofa giant DFS last month for £500m, had hired merchant banker Close Brothers to advise on the strategic options for the business. Warburg Pincus describes itself as a “growth-oriented investor” operating across North America, Europe and Asia.