Poundland will run out of money within days if a restructuring plan is not approved, the High Court has been told. The company, which has around 14,700 staff and 800 stores, is seeking judicial approval for a plan that would prevent it from entering administration. Barristers told a hearing on Tuesday that the retailer is set to exhaust its cash by September 7 if the scheme is not sanctioned.
The restructuring plan would see Gordon Brothers, the private equity firm that bought Poundland for £1 in June, inject a total of £90 million into the company. This includes £30 million already provided since the purchase and an additional £60 million. The plan also involves closing 68 stores, putting around 1,000 jobs at risk, and shutting two warehouses, affecting a further 350 employees.
In written submissions, Tom Smith KC for Poundland Limited said the retailer's financial position had "significantly deteriorated during the last two years" due to a difficult retail environment. The company made a pre-tax loss of approximately £35.7 million in the 2024 financial year. Under the plan, £276.5 million in loans due by September 1 would be pushed back by three years, and a £30 million overdraft facility would be provided, along with rent reductions for many stores.
No one appeared in court to oppose the plan. The hearing before Sir Alastair Norris is expected to conclude later on Tuesday. If approved, the restructuring will allow Poundland to continue trading, avoiding collapse.
