Poundland’s future hangs in balance as administration deadline looms

The future of Poundland remains uncertain as last-ditch efforts continue to save the struggling retailer.

Managing director Barry Williams said a board meeting was being held to decide the company’s future.

The low-cost chain filed a notice of intention to appoint administrators at the end of October.

This gave the business 10 days to secure a potential rescue deal, which will expire at midnight.

Asked if the company was going into administration on Thursday, Mr Williams told reporters: “We’re going to go and have a board meeting now to have those conversations.”

After a meeting with MPs on the Commons Business, Innovation, Science and Trade Committee, Mr Williams thanked the chain’s staff, whose jobs are at risk.

He told Sky News he was “representing 11,000 colleagues” as well as thousands in the broader supply chain and “maybe even the retail industry” at the meeting.

Asked whether he could guarantee the security of jobs and keep the business going in the run-up to Christmas, he said there were “no guarantees at this point”.

It is understood that Poundland’s owners Gordon Brothers have enabled the release of around £10 million of funding for items such as paying staff, taxes and suppliers of stock.

Any extension to Wednesday’s deadline could mean the prospect of a deal that would satisfy the company’s creditors remained on the table.

If not, it is expected that administrators would be appointed, with corporate advisory firm AlixPartners understood to be lined up.

This would pose a threat to the future of Poundland’s roughly 600 shops and 11,000 employees.

Poundland’s board was meeting on Wednesday night (Jonathan Brady/PA)

PA Wire

Business, Innovation, Science and Trade Committee chairman Liam Byrne said: “After extensive cross-examination this afternoon, I’m deeply concerned that Gordon Brothers’ behaviour may have jeopardised  thousands of jobs on Britain’s high streets.

“Over the last 17 months, they have taken millions out of Poundland when the business was on a knife edge.

“Now Poundland appears to be on the rebound, there’s concerning signs it’s been strangled of access to its own funds in what should be its busiest trading period in the run-up to Christmas.

“Worse, Gordon Brothers refused to say it will prioritise saving jobs over and above its own financial returns.

“The prospect of a good outcome however is now higher thanks to the focus on the business of the last week.

“But Gordon Brothers now needs to do the right thing: give Poundland the access it needs to its own funds, and work as hard as possible for a future that protects the maximum number of jobs and stores.”

Advisers have been in talks with parties interested in buying the brand or parts of the business such as swathes of shops.

It has held talks with potential bidders including Tesco over proposals to buy up to 150 stores, and other chains such as Iceland and Lidl.

Investment firm Xyra Holdings has emerged as a potential buyer for the whole business, while Irish firm Martin Property Group is believed to remain interested.

Gordon Brothers previously rejected a takeover offer from Martin Property Group but management named the firm as the preferred bidder last month.

Redorm UK deputy leader Richard Tice said: “Hopefully the directors will be able to extend the notice of administration period from tonight to allow time for a deal to be done with a new buyer for Poundland.

“This will protect many thousands of jobs and keep an important value retailer on the High Street, for hard-pressed consumers worried about rising bills.”