Founder warns Poundland collapse could cost up to 30,000 jobs
Founder Steve Smith says the retailer's insolvency could lead to as many as 30,000 job losses when the impact on suppliers is considered.
Poundland faces insolvency after its directors filed a notice to appoint administrators, putting more than 12,000 staff jobs at risk. Founder Steve Smith warned that the total number of jobs lost could rise to 30,000 when the effect on the chain's suppliers is taken into account.
"If Poundland closes down it will cost the taxpayers billions of pounds, as up to 30,000 people will have no job," Smith wrote in a social-media post on Saturday.
Smith said he had been attempting to purchase the business for months but that Gordon Brothers, the current owner, declined to negotiate. A source close to Gordon Brothers said the firm had not received any formal correspondence from Smith.
Reform Party Treasury spokesman Robert Jenrick criticised the owners, calling the situation "crony capitalism" and arguing that the 12,000 workers deserve better. He also noted that Gordon Brothers had rejected a solvent bid from Ireland's Martin Property Group.
Andy Burnham, mayor of Greater Manchester, said he was seeking answers about the chain's future. The Telegraph reports that Smith claims he has sufficient funding to buy Poundland at its £30 million valuation, but that Gordon Brothers has not engaged with his offer. Smith added that he now supports the management-backed bid from Martin Property Group.
"I tried to talk to Gordon Brothers for the past three months and they never came back to me. I was willing to buy the whole business but now there is no time. I might as well support the management team and Martin Group who are ready to buy it. I am backing whoever can save Poundland," Smith said.
Employees have posted on social media that store performance had improved but accused Gordon Brothers of slowing the sale process. Pepco, a former owner that still holds a stake, has offered to defer repayment of its £7.5 million portion of a £30 million loan to ease pressure on the retailer.
Poundland, founded in 1990, once operated more than 800 stores across the UK and Europe and now runs about 600 outlets serving six million customers weekly. Gordon Brothers and Pepco declined to comment further.