Business secretary seeks update from Poundland owner amid administration concerns

The UK Business Secretary has written to Gordon Brothers, the US investment firm that purchased the 600-store Poundland chain for £1 last summer, to obtain an update on the retailer’s situation. Sources say the firm is preparing to file a notice of intention to appoint AlixPartners as administrator, possibly as early as Wednesday, after rejecting a bid from Northern Ireland’s Martin Property Group.

Poundland employs about 12,000 staff and also operates the 50-store Dealz chain in Ireland. The rejected bid was described by the retailer’s chief executive as “unexpected, unwanted and wholly avoidable”. An improved offer from Martin Property Group has not been ruled out, though it is believed to fall short of the £30 million debt Gordon Brothers incurred when acquiring the business.

Industry insiders note that suppliers have begun to hold back deliveries, complicating any rescue effort. Gordon Brothers is reported to be considering a rapid break-up of the chain, selling stores and stock to multiple buyers, which it believes could raise up to £30 million and preserve more jobs in the long term. Potential interested parties include US firm Fortress, owner of Poundstretcher, The Range, and retailer B&M.

Reynolds has asked his chief strategic business adviser, David Bickerton, to “establish the facts” regarding the potential collapse, as first reported by the Financial Times. He has contacted Gordon Brothers but not Poundland’s management, which had supported the Martin Property Group bid.

A spokesperson for the business department said the situation is “concerning for Poundland employees, their families and communities across the UK” and added that the process is commercial, with the final decision resting with the owners, limiting further government comment.