Poundland's owners will be grilled by MPs as it emerged the chain's bosses cannot access the sales flowing through its own tills. The discount retailer faces a crunch day on Wednesday, with a so-called notice of intention to appoint administrators due to expire just before midnight.
However, it comes as Poundland's US owner Gordon Brothers is due to appear before MPs on the Business, Innovation, Science and Trade Committee in private tomorrow. The firm will be represented by Mark Newton Jones, the former Mothercare boss who now runs investment firm Gordon Brothers' operations in Europe.
Sales rising but funds inaccessible
MPs are likely to question him on claims that Poundland's threatened collapse was caused by it starving the retailer of funds, updates on any buyer, and what its intentions were when it bought the business for just £1 last year. However, the Mirror understands Poundland's management has been further thwarted by not being able to use funds in its own accounts.
The chain is believed to have taken roughly £30million in sales last week alone and, rather than struggling, takings are up year-on-year. The notice of intention to appoint administrators has already seen deliveries from suppliers dry up. Stock levels were high ahead of the Christmas rush but it is understood gaps could now begin to appear on shelves.
Jobs at risk before Christmas
Failure to extend this week's deadline could see Poundland plunge into administration, posing a serious threat to roughly 10,500 jobs just weeks before Christmas, and leaving Poundland's 600 stores in the UK. Also due to appear before MPs on the Business Committee is Poundland chief Barry Williams.
Gordon Brothers has rejected a number of approaches for the chain. Those include from Martin Property Group, the Northern Irish company, which wanted to buy Poundland as a going concern, and whose offer was supported by the retailer's management.
Committee chair calls for sale to succeed
Liam Byrne, the Labour MP who chairs the Business Committee, said last week: “Since we asked Gordon Brothers to appear before Parliament, we’ve been in daily contact and we understand they are now in active talks with several credible buyers about selling Poundland as a going concern.
“We want those talks to succeed and we want to understand what I know will be highly sensitive commercial information in detail. Given the assurances that Gordon Brothers are now focused on a sale of the active business that will save jobs and stores, we will permit them to appear before the Committee in private session in the first instance and issue a statement of our findings thereafter.
“What’s at stake is thousands of livelihoods, shops that keep our high streets alive and a service that communities across the country rely on. When you own a retailer of this size, the decisions you take in the boardroom are felt in homes and on high streets up and down the country. Parliament must know that every step possible is being taken to save the business.”
A spokesperson at Gordon Brothers said: “We are pursuing all avenues through the sale process to find a solution which protects as many jobs as possible and preserves value.
“Work continues at pace, engaging in active discussions on offers with interested parties.
“We recognise the Poundland business has faced several years of instability.
“When Gordon Brothers acquired the business, it was in distress and required a radical restructure, urgent operational change and significant funding, which we provided to support the company’s ability to trade.
“In spite of our efforts and the tremendous efforts of management to deliver a turnaround, the business remains challenged and vulnerable to any potential downturn in future trading.
“Our intent throughout the comprehensive sale process has been to protect as many jobs as possible and preserve value in order to deliver the best available outcome for the people, creditors and local communities who care about this business as much as we do.”
