Summary
Discount retailer Poundland is on the brink of collapse. Poundland’s bosses have filed a notice of intention to appoint administrators, giving the business 10 days to find a rescue deal. The move comes after managing director Barry Williams told staff that the chain’s US owner had cut off a vital supply of funding despite Poundland’s strong sales.
Details
Poundland has 600 stores in the UK and Ireland, including those in Cheltenham, Gloucester and Tewkesbury. The uncertainty surrounding Poundland’s future has left its 12,000 members of staff fearful about the future of their jobs.
The discount chain is teetering on the edge after its US-based owners Gordon Brothers cut off a vital funding supply and rejected a takeover offer from Irish firm Martin Property Group (MPG), the BBC reported. Prime Minister Andy Burnham has said the government was “ready to support” Poundland staff.
He has called for answers over why an offer to buy the business from its current owners, which would have protected jobs, had been rejected. The PM told the BBC: “This is a deeply worrying time for Poundland staff and their families. We want to see jobs protected.
If there was a potential owner to avoid this that hasn’t been accepted, then the business secretary and I want to know why that is the case. “We stand ready to support the workforce however we can.” It is understood Gordon Brothers wants to break Poundland up, with rivals Poundstretcher, B&M and Lidl interested in potentially buying up its stores.
Gordon Brothers bought Poundland, which had been struggling, from the Polish retail group Pepco last year for a nominal £1. A little over a year later, it put the business up for sale. Despite an offer on the table for the business, Poundland’s managers and owners have not been able to agree on a buyer.
It could still be purchased out of administration in a so-called pre-pack deal, but the most likely option is for it to be broken up and for Poundland’s stores to be sold off. Poundland was founded in 1990 with a store in Burton-upon-Trent and has around 20 million customers per year. It sells low-cost everyday products, general merchandise and fashion on local high streets.
Report source: Punchline Gloucester
