Reported by The Guardian
With the chain on the brink of administration, its low-profile US owners face questions about their conduct
‘I t was a very successful and simple proposition,” laments one former Poundland boss. With every product in the shop sold at £1, and the price in its name, its proposition to shoppers was the clearest of any UK high street chain.
Now the UK’s first and biggest nationwide single-price retailer could disappear amid heavy competition and inflation that has eaten into its ability to offer bargains.
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Its potential collapse has brought distress for its up to 12,000 staff in the run-up to Christmas, and as shoppers head to the chain for Halloween costumes and treats.
Meanwhile, its low-profile owners are facing questions from the prime minister over their behaviour in the week his government’s budget attempted to offer support to the high street .
Poundland’s future hangs in the balance – and not for the first time – after the 36-year-old retailer filed a notice of intention to appoint administrators at the high court on Thursday, with the advisory firm AlixPartners lined up to run the process.
The legal measure protects Poundland, which operates 600 stores, including Dealz outlets in Ireland, from the demands of creditors for 10 days while a solution to its problems is sought. However, the prospect of it avoiding mass store closures and job losses diminishes by the day as suppliers hold back on deliveries, hurting its ability to trade.
The chain’s potential demise comes after Gordon Brothers, the American restructuring specialist which bought Poundland for a nominal £1 from its previous owner in June last year, rejected a management-backed rescue bid for the whole chain by Martin Property Group.
While the Northern Irish firm is still in talks about taking on Poundland, it is understood its offer amounts to about £15m. That would pay off only half the £30m shareholder loan, the majority of which was taken on by Gordon Brothers when it bought the company. The deal would also include taking on a further, asset-backed loan worth about £90m, it is understood.
This deal has been…