Reported by The Guardian
Budget retailer and 12,000 jobs at risk after US owner fails to accept buyout offers
MPs have called on the government to protect Poundland and other high street stores from “predatory capitalism” and asset-stripping.
The fate of the retail chain and its 12,000 staff remains uncertain after it filed a notice of intention to appoint administrators at the high court last Thursday. The US restructuring specialist Gordon Brothers, which controls Poundland, has lined up the advisory company AlixPartners to run the process.
More from the original report
In an urgent question in the House of Commons on Tuesday, Gareth Snell, Labour MP for Stoke-on-Trent Central , asked the government what could be done to “send a message to Gordon Brothers that the predatory capitalism that they are putting into this company will not be tolerated, because we in this country will always stand with people before profit”.
Another Labour MP, Antonia Bance, asked what measures the government would use to “hold Gordon Brothers to account”, and if it would “establish an urgent review of whether our corporate governance and insolvency frameworks give sufficient protection against asset stripping and short term financial engineering, at the cost of jobs and our high streets?”
The Green party MP Hannah Spencer said the “scandal” of Poundland “exposes a very serious problem, that our economy is vulnerable to private equity vultures who swoop in and prey on our high street brands by loading them with debt and then trying to ditch them for a profit”.
Kate Dearden, minister for the future of work, told parliament that government officials had held talks with Gordon Brothers on Monday night and she would meet Poundland’s management team along with Usdaw, the shop workers’ union, on Wednesday.
She said Jonathan Reynolds, the business secretary, would meet Gordon Brothers again later this week as political pressure mounts on the company to accept a solvent bid for Poundland.
Dearden said the government could not involve itself in the “commercial negotiations” with potential buyers or comment on individual bids.
However, she said the government was “taking a responsible approach not to sit by and do nothing” and…