Poundland on edge of administration with 12,000 jobs at risk
The notice will give the business 10 working days of breathing space from creditors to secure a potential rescue deal
High street discounter Poundland has filed to appoint administrators, threatening the future of around 12,000 workers.
Court filings show that the retailer has filed a notice of intention to appoint administrators on Thursday afternoon, which will give the business 10 working days of breathing space from creditors to secure a potential rescue deal.
It is understood advisers are still in talks with parties interested in buying the brand and swathes of stores.
The move means around 12,000 jobs are at risk. Poundland currently runs around 600 stores across the UK.
Poundland managing director Barry Williams told staff in a memo that the situation is “unexpected, unwanted and wholly avoidable”.
The discount chain is due to enter insolvency after owner Gordon Brothers rejected a takeover offer from Irish real estate firm Martin Property Group, which management named as their preferred bidder earlier this month.
Gordon Brothers – which only bought Poundland last year for £1 – launched a sale process for the retailer at the start of September.
Wilko and The Range owner CDS Superstores, Poundstretcher owner Fortress and TG Jones owner Modella are all understood to be interested in buying parts of the Poundland business.
It is understood the retailer has appointed advisers at AlixPartners to oversee the insolvency process and assess offers to buy all or parts of the business.
Gordon Brothers had overseen a major turnaround programme at Poundland that included closing more than 100 shops over the past year in an effort to shore up its finances.
A spokesman for Gordon Brothers said: “While Martin Property Group had been identified as the preferred bidder by Poundland’s management team, attention must now turn to other active bids.
“As well as interest from buyers for the whole business, the sale process has surfaced a number of formal and indicative offers for significant viable parts of the business from established retail operators”.
“These options will now be objectively evaluated, with a view to minimising uncertainty for Poundland’s people and all relevant stakeholders,” the spokesperson added.