Float is 'start of the Poundland story' as Spanish launch nears, says boss Jim McCarthy

The retailer is set to become the first value general merchandise retailer on the stock exchange after officially confirming its intention to float this morning.

McCarthy said the single-price point retailer, which is owned by private equity group Warburg Pincus, has approached a wide variety of investors in the UK and the US.

McCarthy said: “It will be mainly blue chip UK but US investors are naturally good at recognising growth opportunities.”

Warburg Pincus holds a 75% stake in Poundland currently, and is yet to decide what proportion of shares it will divest when the retailer floats, although 25% is the minimum requirement.

It is thought the retailer could be valued at between £700m-£750m, although McCarthy said the market will decide its final price. It is set to float at the end of March.

Poundland plans to enhance its existing UK stores by investing in more own-brand products and offering new exclusive products.

It will also upsize or relocate older stores to larger sites as it currently has 111 stores under 4,000 sq ft or less. It hopes this will allow it to enhance the customer experience and offer a wider product offer.

It still has plans to launch a transactional website.

Poundland will also use money raised from the float to launch 10 trial stores in Spain, as revealed by Retail Week two weeks ago.

McCarthy said 60% of products stocked in the Spanish stores, which will trade under its Dealz fascia, will mirror the UK offer. The remaining 40% of products will target the Spanish market in particular.

McCarthy added: “The economy in Spain has been challenging and come under pressure. The Spanish market has very similar characteristics as Ireland did when we launched there in 2011. And since its launch Ireland has paid back every cent that was invested.”

McCarthy added that Poundland had hired “several” people in Spain to help lead it and work alongside international development director David Coxon and support people who will “embed the culture”.

McCarthy declined to give details about when and where the first stores will launch but he said the process is “well progressed”. However, he said Poundland would focus on the float before unveiling any Spanish stores.