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Good morning. Today we're talking about Poundland’s demise, Warner Bros. split and the downgraded global outlook.

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Poundland’s £1 sale

UK discount retailer Poundland has been sold for a nominal sum of £1 by its parent, Pepco Group, to US investment firm Gordon Brothers. This symbolic sale highlights the significant challenges facing the high street chain, which has seen five consecutive quarters of falling sales. Founded in 1990 with its first store in Burton upon Trent, Poundland rose to popularity by offering value products from food and cosmetics to homeware and stationery, with all items originally priced at £1. However, it moved away from this core £1 model in 2019, introducing a new pricing structure. Only in recent months has it tried to win back customers by increasing its £1 product range. Gordon Brothers, which previously owned women’s fashion retailer Laura Ashley, has committed up to £80m in financing to support a radical turnaround. This plan, expected to go before the High Court, includes the potential closure of up to 200 of its 800+ UK stores and steep rent reductions. Poundland CEO Barry Williams will lead efforts to return the "iconic retailer" to its £1 heritage. Pepco Group stated the sale allows it to simplify operations and focus on its higher-margin Pepco business in Europe.

Warner Bros. Discovery divides

Warner Bros. Discovery (WBD) has announced it will split into two independent companies. This strategic move, effectively reversing its 2022 merger, is driven by the stark industry contrast where streaming services now attract hundreds of millions of users globally, while cable TV audiences have been in decline. Under the new structure, WBD's traditional cable TV channels, including CNN, TNT, and TBS, along with Discovery+ and Bleacher Report, will form Global Networks. Simultaneously, its film studios and core streaming operations, notably HBO Max – which has enjoyed critical and audience success with shows like Succession, The White Lotus, and The Last of Us – will consolidate under Streaming & Studios, led by current CEO David Zaslav. WBD states this separation will allow both new entities to focus intensely on their core businesses and pursue distinct dealmaking opportunities. While the company highlights strategic alignment, observers speculate the move also positions Global Networks for a potential sale, reflecting its $9.1bn downgrade of TV networks last year. This restructuring mirrors broader industry trends where media conglomerates are shedding legacy TV assets to prioritise future-focused streaming ventures.

World faces decades-low growth

The World Bank has predicted that the global economic growth this decade is set to average a mere 2.5%, marking the slowest pace since the 1960s. This pessimistic outlook is underscored by a recent downgrade for the current year's global economic growth forecast to 2.3%, a reduction from 2.7% in January and 2.8% last year. Chief Economist Indermit Gill warned that "without a swift course correction, the harm to living standards could be deep," attributing the downturn significantly to "international discord—about trade, in particular" and persistent policy uncertainty. This includes the lingering effects of wide-ranging tariffs that continue to weigh on global economic prospects. The twice-yearly Global Economic Prospects report reveals lowered forecasts for nearly 70% of all economies, encompassing major players like the US, China, and Europe, alongside six key emerging market regions. This latest revision aligns with a series of downgrades from other international organisations. While the outlook is notably subdued, the World Bank's report does not yet predict an outright global recession, signaling a period of significant deceleration rather than outright contraction.

Elsewhere...

Takeover talk: The high street lender Metro Bank has been approached about a private equity-backed takeover in a move that could lead to the disappearance of another company from the London Stock Exchange.

Rising tensions: Global oil prices jumped after Israel said it had struck Iran in a dramatic escalation of tensions in the Middle East.

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