Poundland directors resign amid dispute over sale and possible administration
Three directors appointed to turn around discount retailer Poundland have quit as owner Gordon Brothers pursues a sale that could lead to a breakup or administration, putting thousands of jobs at risk.
Three directors who were appointed to oversee a turnaround at discount retailer Poundland resigned on Tuesday, citing a disagreement with owner Gordon Brothers over the proposed sale of the business. The directors – Andrew Kirkpatrick, Stephen Welch and Dominic Young – had been in post for only 12 days and will leave without pay.
Gordon Brothers, which bought Poundland for £1 last year, is seeking £30 million for the company and has indicated a willingness to break up the chain of about 600 stores or place it into administration. The firm rejected a solvent offer from Ireland’s Martin Property Group because the bidder proposed paying roughly half of the purchase price up front and deferring the remainder for two years.
"While Martin Property Group had been identified as the preferred bidder by Poundland’s management team, attention must now turn to other active bids," a Gordon Brothers spokesperson said. "These options will now be objectively evaluated, with a view to minimising uncertainty for Poundland’s people and all relevant stakeholders."
Sources said Gordon Brothers might accept a shortfall in the upfront payment to close a deal within 48 hours, but Martin Property Group has threatened to withdraw from negotiations. In the meantime, Gordon Brothers released funds to allow Poundland to meet payroll for its 12,000 employees on Thursday.
The dispute comes as the company reports recent sales growth – 6.7% in September and 8.4% in the first three weeks of October – but Gordon Brothers has reportedly rejected chief executive Barry Williams’ 2027 business plan. Potential buyers include Fortress, owner of Poundstretcher, and Henderson Property Group for the Irish arm, Dealz, while Innovest Holdings has been mentioned as a possible investor.
Union officials have alerted government ministers to the risk of large-scale job losses, noting that Poundland’s main distribution centre is located in the constituency of Prime Minister Andy Burnham. The government has not yet commented on the situation.