Thousands of jobs at risk as discount retailer Poundland on brink of administration

Thousands of jobs are under threat after discount retailer Poundland moved a step closer to administration on Thursday.

The High Street chain has filed a notice of intention to appoint administrators, according to court documents. The move gives the company ten working days’ protection from creditors while efforts continue to secure a rescue deal.

Retail industry figures have warned that a collapse of Poundland could become one of the most significant retail insolvencies since the demise of BHS in 2016.

Poundland operates around 600 stores across the UK, including almost 50 in Scotland.

Owners Gordon Brothers, which bought Poundland for £1 last year, launched a sale process in September. A number of bidders are understood to be interested in parts of the business, including Wilko and The Range owner CDS Superstores, Poundstretcher owner Fortress and TG Jones owner Modella.

Advisers from AlixPartners have reportedly been appointed to oversee the insolvency process and assess bids for all or parts of the retailer.

Irish real estate company Martin Property Group had previously been identified by management as the preferred bidder. However, it is understood the offer was not fully funded and involved deferred payments.

A spokesperson for Gordon Brothers said earlier this week that attention would now turn to other active bids and that both whole-business and partial-sale options would be considered with the aim of reducing uncertainty for staff and stakeholders.

In a statement, the company said: “As well as interest from buyers for the whole business, the sale process has also 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.”

Union leaders have criticised the handling of the sale process, warning thousands of jobs could be at risk.

Usdaw national officer Bally Auluk said the decision not to accept what he described as a solvent offer from Martin Property Group increased the likelihood of the company entering administration.

He said: “This is an incredibly worrying time for our members and the union will continue to fight for their jobs and provide them with the help and support they need during this uncertain time.”

Meanwhile, Usdaw general secretary Joanne Thomas called on the UK Government to intervene, saying around 11,000 jobs were at stake.

She said: “Over the past five years, around 250,000 jobs have been lost in the retail sector. Job security is a key priority for a successful economy and I urge the (UK) Government to provide the sector with the support it needs.”

The union has accused Poundland’s owners of putting thousands of retail jobs at risk in the run-up to Christmas, while Gordon Brothers insists all options remain under consideration as the sale process continues.