Poundland directors have agreed more time to try to save the struggling retailer, extending statutory protection for a further 10 working days as a sale process continues.
In a statement issued on Thursday morning, the board said it had resolved to make an application for a second Notice of Intention (NOI) to appoint administrators, with funding agreed to enable the business to keep trading during the period.
Second Notice of Intention
The statement said: "Over the past two weeks, Poundland has been operating under the statutory protection of a Notice of Intention (NOI) to appoint Administrators. Amid an ongoing sale process, and with funding agreed to enable the business to continue trading during this period, the Board of Poundland has today resolved to make an application for a second NOI with a view to identifying the best available prospects for shareholders, creditors and our people."
It added: "This extends the current protections over the business for a further 10 working days. Our stores remain open as usual during this period, and we thank our colleagues, suppliers and customers for their incredible and continued support."
The low-cost chain filed a notice of intention to appoint administrators at the end of October, which gave the business 10 days to secure a potential rescue deal, expiring at midnight.
Managing Director's Comments
After a meeting with MPs on the Commons Business, Innovation, Science and Trade Committee, managing director Barry Williams thanked the chain's staff, whose jobs are at risk. He told Sky News he was "representing 11,000 colleagues" as well as thousands in the broader supply chain and "maybe even the retail industry" at the meeting.
Asked whether he could guarantee the security of jobs and keep the business going in the run-up to Christmas, he said there were "no guarantees at this point".
It is understood that Poundland's owners Gordon Brothers have enabled the release of around £10 million of funding for items such as paying staff, taxes and suppliers of stock.
Committee Chairman's Concerns
Business, Innovation, Science and Trade Committee chairman Liam Byrne said: "I'm deeply concerned that Gordon Brothers' behaviour may have jeopardised thousands of jobs on Britain's high streets.
"Over the last 17 months, they have taken millions out of Poundland when the business was on a knife edge. Now Poundland appears to be on the rebound, there's concerning signs it's been strangled of access to its own funds in what should be its busiest trading period in the run-up to Christmas.
"Worse, Gordon Brothers refused to say it will prioritise saving jobs over and above its own financial returns. The prospect of a good outcome however is now higher thanks to the focus on the business of the last week.
"But Gordon Brothers now needs to do the right thing: give Poundland the access it needs to its own funds, and work as hard as possible for a future that protects the maximum number of jobs and stores."
Advisers have been in talks with parties interested in buying the brand or parts of the business such as swathes of shops. It has held talks with potential bidders including Tesco over proposals to buy up to 150 stores, and other chains such as Iceland and Lidl.
Investment firm Xyra Holdings has emerged as a potential buyer for the whole business, while Irish firm Martin Property Group is believed to remain interested. Gordon Brothers previously rejected a takeover offer from Martin Property Group but management named the firm as the preferred bidder last month.
