Poundland in £200 million buy-out

Poundland's penny-wise ways have created big business for its owners, after the announcement of a £200 million buy-out by American private equity group, Warburg Pincus.

The discount fixed-price retailer was bought by Advent International in 2002 for £50 million.

The company has proven to be a rare success story amid the recession, benefiting from the dissolving of the stigma of discount shopping and the demise of Woolworths in 2008/2009.

Poundland chief executive, Jim McCarthy – who will remain in his position – said the deal opened the door for a raft of new opportunities.

"It will enable us to accelerate our growth plans and bring the single price proposition to even more customers throughout the UK," he said.

"Poundland and Warburg Pincus both recognise the significant opportunities for future growth from increasing numbers of consumers who are seeking value for money whilst not compromising on quality."

Poundland was established in 1990 and under Advent's ownership expanded its store base from 70 to 260 and increased its workforce from 3,000 to 7,000, to become the UK market leader in single-price stores.

Last year, it sold 185m batteries, 21m metres of aluminium foil, 1.7m umbrellas, 4m jars of coffee and 500,000 garden gnomes. Revenue rose by a quarter to £510m in the year to March 2010.

McCarthy drew up plans last year to open 50 new stores in the next year, with ambitions to one day see 650 stores nationwide.

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