Poundland owner releases funds as collapse threat looms

Summarised from 4 outlets · 5 reports · Updated 10 Nov, 20:38 · Archive

Poundland's American owner Gordon Brothers has released £10m to help the struggling discount chain pay suppliers, as it faces a Thursday deadline to avoid administration.

Poundland is facing a critical deadline after being blocked by its American owner Gordon Brothers from accessing cash in its bank accounts. The BBC understands that about £50m has been frozen, leaving the 600-store chain unable to buy stock to fill its shelves. However, Gordon Brothers has now agreed to release around £10m to pay suppliers, according to multiple reports.

The retailer has filed a notice of intention to appoint administrators, which protects it from creditors until Thursday. Poundland's management has been unable to use funds in its own accounts to pay for stock, despite the chain generating significant sales. The Mirror reports that Poundland took roughly £30m in sales last week alone and that takings are up year-on-year.

Pressure on Gordon Brothers has intensified amid political scrutiny. The US investment firm met with Business Secretary Jonathan Reynolds, who stressed the group 'must do everything in [its] power to protect jobs and provide certainty for workers', according to City AM. Gordon Brothers' bosses are due to appear before the Business, Innovation, Science and Trade Committee.

Poundland's boss Barry Williams told staff that like-for-like sales were up 11.4% last week, and the business made a profit of £18.1m in the year to September, described as a 'strong recovery' from previous losses of £68m. Gordon Brothers, however, has said the chain remains 'challenged and vulnerable to any potential downturn in future trading'.

Gordon Brothers bought Poundland for £1 last June and has provided significant funding since. A source cited by the BBC said access to funds had been limited because of tension between Gordon Brothers' dual role as both creditor and shareholder, but expected a relaxation in the next two days. Industry sources told Sky News the fund release is a 'vital step' but warned it does not necessarily prevent administration this week.

How it is being reported

• Poundland hopeful for last-minute rescue deal to stave off collapseThe BBC understands the discount chain, which has been edging towards administration, will be given more time to find a buyer.BBC Business · 11 Nov, 00:02
• Poundland owner set to release £10m to retailer ahead of MP questioningThe owner of Poundland has agreed to release around £10m of funding in order to pay the firm’s suppliers a day before its bosses are grilled by the government. Gordon Brothers, the US investment firm which owns the retail group, will unlock the funds held on Poundland’s balance sheet as the first in a series [...]City AM · 10 Nov, 18:40
• Poundland owner's showdown with MPs amid questions over chain's access to fundsEXCLUSIVE: Poundland generated around £30million in sales last week alone, yet discount chain is still facing risk of collapseThe Mirror · 10 Nov, 14:11
• Poundland owner releases £10m to retailer hours before MP grillingPoundland's owner has released millions of pounds of funding to pay the discount retailer's suppliers - a breakthrough in talks about saving the discount retailer and its 10,500 staff.Sky News · 10 Nov, 11:47
• Poundland unable to buy new stock as fears over collapse growThe discount chain is continuing to edge towards collapse and is said to be "running on fumes", according to one insider.BBC News · 9 Nov, 16:46

In this story: Poundland · Gordon Brothers · Jonathan Reynolds · Barry Williams · United Kingdom · United States

This summary was written by AI from the headlines and standfirsts above, and states as fact only what at least two outlets report. How we use AI · Report a problem · Corrections log