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Poundland appoints former Tesco boss as chairman
Poundland has delivered a major coup by appointing former Tesco finance director Andrew Higginson as its non-executive chairman, taking the business a step closer to a possible stock market listing.
The company, which has performed well during the economic downturn, could be worth up to £500m in an IPO.
However, sources close to the business have played down the prospect of any sale in the next few years.
Higginson had been tipped for the top job at Tesco after Sir Terry Leahy stepped down, but resigned shortly after he was overlooked for Philip Clarke.
It is thought that his appointment could lead to an IPO, with one source close to the company saying: "The business is not ready to be sold, but I think Andrew gives them the IPO option."
Last night Higginson said: "I'm thrilled to bits. I'm trying to put together a portfolio after being named chairman of N Brown [the online fashion group] last week."
He added: "My Tesco experience must count for something and hopefully I can bring that to Poundland."
Retail analyst Clive Black at Shore Capital said: "Poundland has an enormous capacity to grow, and Andrew's strategic insights and operational capacity will take it to the next level."
Higginson is a highly respected City figure with significant contacts. He was part of Leahy's team which turned around the fortunes of Tesco's, increasing profits from £1bn to £3bn.
He was instrumental in Tesco buying RBS's 50% stake in Tesco Personal Finance for £950m in 2008 and led its retailing services division, including Tesco Bank.
Poundland saw sales of £780m to April, up 21.6% on last year, with underlying profits of £40m, up 26.5%. The company plans to open 60 new stores next year.
It is owned by the private equity firm Warburg Pincus, which bought it two years ago from rival Advent for £200m. Advent paid its founders £50m in 2002.
Higginson replaces Colin Smith, the former head of Safeway supermarkets, who has been Poundland's chairman for 10 years.
Story taken from Simon Neville's report in The Guardian on Wednesday 11th July 2012.