Supplier urges government to block Poundland administration amid job loss fears

BMI Limited, the owner of pet-food brands such as Vitagen and Husky, has written to Business Secretary Jonathan Reynolds urging the government to prevent what it calls an abuse of UK administration laws. The supplier argues that Poundland should remain solvent to protect jobs and other stakeholders.

"We wish to urge the Burnham Government to take action to prevent a serious abuse of UK administration laws, protect jobs and protect all stakeholders," the letter said.

Poundland’s chief executive Barry Williams told staff that recent sales were ahead of expectations, with like-for-like sales up 11.4% in the latest week, driven by Halloween demand. Despite this momentum, the retailer’s directors filed a notice to appoint administrators on Oct. 29, triggering a 10-day moratorium while potential buyers are sought.

The move follows Gordon Brothers’ rejection of a solvent offer from Martin Property Group after the latter indicated it would not repay a £30 million shareholder loan up front. Gordon Brothers had acquired the loan for £1 as part of its 2024 purchase of the chain.

BMI Limited has halted supplies to Poundland, accusing Gordon Brothers of cutting cash to force administration and of seeking repayment of a loan that is not yet due.

"Gordon Brothers have acted in a despicable way with no regard for others," the supplier’s representative said.

Poundland founder Steve Smith warned that the collapse could jeopardise as many as 30,000 jobs across the retailer and its supply chain. The government said it is “deeply concerned” and Business Secretary Reynolds indicated willingness to act if evidence of wrongdoing is found.

Reform Party Treasury spokesman Robert Jenrick wrote to Gordon Brothers’ chief executive Norma Kuntz demanding a meeting, stating that the firm appears to be using the administration process to profit from a business it bought for £1, potentially affecting 12,000 workers, suppliers, landlords, councils, HMRC and taxpayers.

Poundland is in talks with several retail operators, including Tesco, about selling up to 150 stores, while a board spokesman said ongoing discussions aim to preserve jobs and maximise returns for shareholders and creditors.