Poundland is expected to shut dozens of stores following its £1 sale to investment firm Gordon Brothers, as part of a major restructuring effort.
The discount chain, which operates over 800 outlets and employs around 16,000 people, was offloaded by owner Pepco Group amid falling sales and rising operating costs.
Gordon Brothers, which has pledged to invest up to £80 million in the business, is preparing a turnaround plan that may include rent reductions and a significant cut to its store estate.
The move puts thousands of jobs at risk, although final details have yet to be confirmed.
Pepco, which acquired Poundland in 2016, is shifting focus to its higher-margin Pepco brand and has acknowledged that the sale will not generate major returns for shareholders.
Budget chains like Poundland have struggled recently due to growing competition and mounting cost pressures.