Poundland's managing director told suppliers the discount chain was beating sales forecasts just weeks before its US owner triggered the company's looming collapse into administration, according to documents seen by the Mirror.
A note sent to suppliers from managing director Barry Williams hailed the 600-store retailer's "encouraging" performance at the start of its new financial year, with a return to growth. Sales accelerated from 6.7% in September to 8.4% in the three weeks to October 18, with takings and profits "all running comfortably ahead of expectations", Mr Williams reassured firms in its supply base.
Notice of intention to appoint administrators
However, the board was forced to file a notice of intention to appoint administrators last week, threatening 12,000 direct job losses and the worst retail collapse since Wilko in 2023.
Steve Smith, founder of Poundland, warned the imminent collapse risks triggering 30,000 job losses in total. Mr Smith wrote on social media: "If Poundland closes down it will cost the taxpayers billions of pounds, as up to 30,000 people will have no job."
Owner accused of refusing to negotiate
Mr Smith, who no longer owns the company, also claimed he had been trying to buy it back for months, but said Gordon Brothers, the owner, refused to negotiate with him.
Mr Williams said, in separate documents seen by the Mirror, that the chain had been starved of funding by US restructuring firm Gordon Brothers, which bought the business for a nominal £1 last year.
In the message to suppliers, sent on October 21, the board said it was "pleased to see our financial performance on an improving trajectory throughout our last financial year and now momentum is continuing to accelerate in the first three weeks of the new financial year."
"Not only has our like for like sales position strengthened in October, but we are delivering an out-performance of sales, gross profit and margin against our own ambitious plans. At the start of this busy trading quarter, we trust you will be reassured by our continuing improving trajectory and strong track record to pay suppliers, in full and on time."
Government involvement and sale process
Questions are being asked about Gordon Brothers' motives, with Andy Burnham, in whose Makerfield constituency Poundland has a distribution centre, becoming involved. The MP said the government is "ready to support" Poundland staff as the retailer teeters on the brink of collapse. He also called for answers over why an offer to buy the business from its current owners, which would have protected jobs, had apparently been rejected by Gordon Brothers.
The notice of intention to appoint administrators, filed on Thursday last week, gives 10 working days to try and find a buyer.
Poundland's board said: "Over the past two months, initially prompted by interest from several parties, we have been working on a formal sale process for Poundland. Despite enormous efforts it has not been possible to identify an acceptable offer for the business as a whole. The process has however attracted several established retail operators who have made formal offers, collectively these cover a significant part of the business, and we believe offer the best available prospects for shareholders, creditors and to preserve jobs."
