BBC Breakfast halted its regular programming to bring viewers a major update on discount retailer Poundland, which is on the verge of going bust. The chain employs 12,000 people across the UK and Ireland, and its difficulties are expected to have a knock-on effect on suppliers, who could receive back “pennies in the pound” if the company goes into administration.
Poundland files notice to appoint administrators
Presenters Sarah Campbell and Jon Kay handed over to Peter Ruddick to explain the latest on the retailer. “It's unfortunately a familiar and troubling story, isn't it? A well-known, well-loved, and formerly successful high street name in difficulty,” he said. “Poundland filed a notice of intention to appoint administrators last week. That gives the business a bit of time to find a rescue deal.”
This process could put 12,000 jobs at risk across 600 stores in the UK and Ireland. US firm Gordon Brothers only acquired the brand for a pound last June, then put it up for sale in September after saying it had invested to help steady the ship.
Government and supplier concerns
“But the question is, have there been offers for the business as a whole that might protect the brand, the stores, and the jobs?” Ruddick said. “That's the concern from those in government, from the prime minister down.”
The business minister, Kate Dearden, said the government would not be commenting on any deal or intervening in the commercial operations. However, she is meeting executives and unions today, with a focus on jobs. There is also big uncertainty for companies that supply Poundland.
Ruddick cut to a clip of Adam Turner, sales director at Bradford-based Highcrest Retail Brand, one of Poundland's suppliers. “It's a nightmare for all, to be honest with you, because it's not just the suppliers; it's the staff at Poundland,” Turner said. “Some of these guys have been there for many years. It's from the warehouse staff all the way to the shop staff to everybody within the head office.”
Next steps for the company
“It's a massive ripple effect through the supply chain because we're in a very fortunate position to stomach this. But at the end of the day, we've got a gap in our turnover for next year. It's a big area of growth to get back, so it's going to be a detrimental effect to everybody in the game,” he said.
Ruddick confirmed: “Now, as well as today's meetings, the business secretary Jonathan Reynolds will meet the company's ownership tomorrow.” He concluded: “There does appear to now be a debate about whether it's best for the company, the current owners, those owed money by the company, to sell it as a business as a whole, or to be broken up, and that determines lots of jobs.”
