MPs Say Poundland Owner Took Millions Out as Chain Seeks Time

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Poundland's management will ask the high court on Thursday morning for two more weeks of protection from creditors, while MPs accuse its owner, Gordon Brothers, of taking millions out of the chain.

What a sale would have to cover

The shareholders took on £30m of debt when Gordon Brothers bought Poundland for a nominal £1 in June 2025. The previous owner, the European retail group Pepco, still holds £7.5m of it. Pepco will accept a delay in repayment if that helps the business survive. The bids on the table are understood to be worth less than the full £30m.

Xyra Group, a little-known finance company with no earlier retail experience, is thought to have offered about £12m up front and close to £30m in total. Martin Property Group, a Northern Irish family-owned firm, backs a management-backed rescue bid that includes the Dealz chain in Ireland. Its first offer was rejected. It came to no more than half of the £30m Gordon Brothers wants, with less than £7m up front.

Gordon Brothers is understood to be in talks with three potential bidders for the whole chain. It has also indicated that selling stock and groups of stores to rival retailers could raise more.

The legal breathing space

Poundland filed a notice of intention to appoint administrators two weeks ago. Administrators are insolvency specialists who take control of a failing company. The notice holds creditors off until Thursday morning, which gives management time to look for a solution.

Directors now want a further 10 working days, and the court must approve them. Gordon Brothers is understood to support the request. It has also released another £10m so Poundland can buy new stock and keep trading.

If the protection lapses, administrators are the likely next step, and Alix Partners has already been lined up.

What the committee heard

Committee chair Liam Byrne said afterwards he was seriously worried about the owner's behaviour. By his account, Gordon Brothers has taken millions out of Poundland over 17 months, while the business was on a "knife-edge". He added that Poundland appears to be on the rebound, yet there are worrying signs it has been "strangled of access to its own funds" in its busiest trading period before Christmas.

Byrne also said Gordon Brothers refused to say it would put saving jobs ahead of its own financial returns.

Mark Newton-Jones, European head of Gordon Brothers, gave evidence in private to the Commons business select committee on Wednesday afternoon. The session lasted almost two hours. The committee separately heard from Poundland's management, led by Barry Williams.

Poundland employs 12,000 people and runs 600 stores in the UK and Ireland. Sources say sales are above last year's level, yet the cash on hand would last only briefly. Gordon Brothers has said the chain remains vulnerable to any downturn in future trading.

Gordon Brothers has been approached for comment.

Source: the Guardian