Poundland is seeking a last-minute rescue deal as the discount retailer faces the threat of administration. For the chain’s 11,000 employees, the clock is ticking toward a midnight deadline to find a buyer.
The retailer’s survival hangs on a desperate attempt to unlock liquidity. US investment firm Gordon Brothers—which bought the chain for £1 last year—has been accused of blocking access to bank accounts, leaving roughly £50m frozen. This standoff has crippled the company’s ability to pay staff, cover rent, and restock shelves across its 600 stores ahead of the critical Christmas trading period.
Gordon Brothers has denied these allegations. While sources suggest a £10m funding release could buy enough time to postpone administration, insiders warn that this injection is small in the scale of things.
The crisis has reached Westminster. A committee of MPs is set to grill Gordon Brothers on Wednesday over claims the firm intends to strip the company’s assets by selling stores and stock piecemeal. Prime Minister Andy Burnham has joined the chorus of politicians demanding answers following the rejection of previous takeover bids.
Management already filed a notice to appoint administrators last Thursday, triggering a 10-day moratorium to hold off creditors. Now, the board is weighing offers from the Xyra Group and Ireland’s Martin Property Group.
The path forward remains fraught with financial hurdles. Gordon Brothers is demanding clarity on a £30m price tag and the repayment of a £30m loan. While Xyra Group has proposed a £12.5m upfront payment to preserve solvency, the bidder itself is now under fire as observers scrutinize the origin of its funding.
Earlier coverage: Poundland Owner Warns of Vulnerability as Rescue Talks Continue Amid Job Risk
