LONDON, Jan 16 (Reuters) - European discounter Pepco Group PCOP.WA said on Thursday the performance of its struggling Poundland business in Britain deteriorated in the Christmas quarter, with underlying revenue falling 7.3%.

The Warsaw-listed retailer, which also owns the Pepco and Dealz brands, said group like-for-like revenue fell 1.1% in the three months to Dec. 31, its fiscal first quarter, narrowing from 3.5% in the prior quarter.

Like-for-like revenue rose 1.4% at the Pepco fascia and 6.6% at Dealz.

The group said Poundland's decline was largely caused by continued weakness in the clothing and general merchandise segment, alongside previously flagged challenging market conditions.

Pepco said last month it was considering strategic options for the 825-store chain after it booked a 775 million euros ($797.1 million) charge, plunging the group to an annual net loss of 662 million euros.

($1 = 0.9723 euros)

(Reporting by James Davey; Editing by Varun H K)

((james.davey@thomsonreuters.com))