Poundland on brink of administration as 12,000 jobs and hundreds of stores at risk

Poundland has moved to the brink of administration, putting around 12,000 jobs and hundreds of stores at risk as last-ditch rescue talks continue.

The high street discount giant filed a notice of intention to appoint administrators on Thursday afternoon, giving it 10 working days of protection from creditors while advisers try to secure deals for the business.

All Poundland stores remain open and are trading as normal for now.

But the future of large parts of its roughly 600-store UK estate is uncertain, with potential buyers understood to be interested in snapping up stores rather than taking on the entire chain.

Poundland managing director Barry Williams said: “Despite enormous efforts it has not been possible to identify an acceptable offer for the business as a whole.”

He said several established retail operators had made formal offers which collectively covered a “significant part” of Poundland and could offer the best chance of protecting jobs.

Corporate advisory firm AlixPartners is understood to be lined up to act as administrator if Poundland formally enters administration.

The dramatic development comes after owner Gordon Brothers rejected a takeover offer from Irish real estate firm Martin Property Group, which Poundland management had identified as its preferred bidder.

Gordon Brothers bought Poundland for just £1 last year and launched a sale process for the troubled retailer at the beginning of September.

Wilko and The Range owner CDS Superstores, Poundstretcher owner Fortress and TG Jones owner Modella have all been linked with bids for parts of the business.

B&M, Lidl and Aldi have also reportedly shown interest in individual stores.

That could provide a lifeline for some branches and employees, but any break-up of Poundland is unlikely to save its entire store network.

The retailer had already been through a major restructuring under Gordon Brothers, shutting more than 100 shops over the past year as bosses tried to cut costs and stabilise the company.

Tensions have since emerged between Poundland's management and its owner over the handling of the attempted sale.

A key issue is understood to involve a £30 million loan which Gordon Brothers wanted covered as part of any takeover agreement.

Williams told staff earlier this week that the prospect of administration was “unexpected, unwanted and wholly avoidable”.

Poundland will now be racing to secure agreements with potential buyers during the protection period, with the fate of thousands of workers likely to depend on how many stores bidders are prepared to take on.