Sources Expect More Time for Poundland as £10m Is Released
Poundland's 11,000 employees are waiting to learn whether the retailer's collapse can be pushed back far enough for a rescue deal. Sources close to the situation told the BBC that extra time is expected after the owners released £10m.
Two readings of the same business
Boss Barry Williams told staff last week that like-for-like sales, which leave out new stores, were up 11.4%. That period included Halloween, and he put it £1.5m ahead of budget.
He also said Poundland made a profit of £18.1m in the year to September, after losses of £68m the year before. Gordon Brothers, the owner, sees it differently. It says the chain remains "challenged and vulnerable to any potential downturn in future trading".
Who could take the stores
Poundstretcher, Tesco and B&M have shown interest in picking up Poundland stores. That could mean continuing work for staff if the chain is split up and sold in chunks.
The open question is whether selling the stores in pieces would save more jobs than one buyer who keeps Poundland running nationwide. The report does not say which is likelier.
The frozen cash and the clock
The BBC understands that Gordon Brothers had frozen about £50m. Managers could not restock shelves across the 600 shops. The sources called the £10m release "small in the scale of things", but said it could at least postpone the collapse while a longer-term solution is explored.
A deadline to secure a buyer was set to expire at midnight, and the sources expect it to be extended.
Separately, a 10-day moratorium shielding Poundland from its creditors ends on Thursday. It could also be extended if a solvent deal looks possible.
Owners accused of forcing a break-up
MPs on a committee are due to question Gordon Brothers, Poundland's US owners, on Wednesday. The investment firm is accused of hoping to profit by selling off the 600 stores and their stock in pieces.
The firm, which paid £1 for the chain last year, is accused of engineering that outcome by withholding the cash Poundland needs for stock, wages and rent before Christmas. It denies this.
Pressure on the owners also remains after a takeover bid was rejected. Politicians, among them Prime Minister Andy Burnham, have asked for explanations of that rejection.
Source: BBC News