Poundland seeks last-minute funding to avoid administration

Poundland and its 11,000 staff are counting on a £10 million injection from its US owner, Gordon Brothers, to extend the deadline for securing a buyer. The retailer faces a creditor moratorium that ends on Thursday, after which it could enter administration if a solvent deal is not reached.

Sources close to the situation told the BBC that the funding, while modest, may allow the chain to postpone a collapse while a longer-term solution is explored. A parliamentary committee is scheduled to question Gordon Brothers on Wednesday after accusations that the investment firm is positioning to sell Poundland’s 600 stores and inventory in pieces.

Gordon Brothers bought Poundland for £1 last year and has been criticised for restricting access to cash needed for stock, wages and rent ahead of the Christmas trading period. A recent takeover bid was rejected, prompting calls for explanations from politicians, including Prime Minister Andy Burnham.

Poundland chief Barry Williams reported that like-for-like sales rose 11.4% year-on-year, exceeding budget by £1.5 million, and that the business posted an £18.1 million profit for the year to September, after a loss of £68 million the previous year. Gordon Brothers, however, described the chain as still "challenged and vulnerable to any potential downturn in future trading". Potential buyers such as Poundstretcher, Tesco and B&M have shown interest in acquiring stores, which could preserve jobs if the business is broken up.