Poundland unable to buy new stock as fears over collapse grow
Summary
Poundland says it cannot buy new stock after its owner, Gordon Brothers, restricted access to about £50 million in the chain’s bank accounts. The retailer has until Thursday to secure a rescue or seek an extension to creditor protection; a London-based bidder, Xyra Group, is reported to be making progress.Key Facts
- Gordon Brothers bought Poundland for £1 last June.
- The restriction on funds is affecting stock supplies at Poundland’s 600 stores.
- Poundland has filed a notice of intention to appoint administrators, which gives it protection from creditors until Thursday.
- Poundland has about 11,000 employees.
- Poundland chief executive Barry Williams told staff that the business made a reported £18.1 million profit in the year to September, compared with a £68 million loss the previous year; the latest accounts have not been audited.
- Gordon Brothers said Poundland remains challenged and vulnerable to a downturn, and said it had provided significant funding to support the business.
- A source familiar with the sale process said Xyra Group was making significant progress with a bid to buy Poundland.
- Poundstretcher, Tesco and B&M have shown interest in acquiring some Poundland stores.
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