The discount retailer could enter administration within days
One of the nation’s biggest discount retailers is facing the threat of closure as American owners attempt to sell the business, it has been reported.
It is feared that Poundland could enter administration in only a matter of days as owners at the US investment firm Gordon Brothers is seeking a buyer for the chain.
The decision comes only a year after they acquired the company for just £1.
In a recent trading update, the company said they ended Q4 with “significant momentum” and that the recovery plan is “working”.
There are around 600 Poundland stores in the UK and Ireland, employing 12,000 people.
In Sheffield alone there are eight stores, including two within the city centre – one on the Moor and the other on High Street – and one in Meadowhall.
Martin Property Group, in Ireland, is reportedly seeking a deal that would keep the business out of administration however retail workers’ union Usdaw warning that administration could be imminent if a deal cannot be agreed.
The closure comes despite it being reported that sales at Poundland are on the rise.
Insolvency expert Molly Monks, of Parker Walsh, said: “A business can have customers coming through the door and still be in serious financial trouble.
“Sales are only one part of the picture – what matters is whether the business has enough cash to meet its immediate commitments and fund its future.
“When a retailer is under pressure, there can be a very real difference between improving trading and having a financially viable business. A rescue needs to address the underlying financial position, not just the performance of its stores.”
Poundland MD Barry Williams recently said: “We ended Q4 with significant momentum, returning to positive like-for-like growth and that momentum has only strengthened in the first week of the new financial year.
“Our recovery plan is working, thanks to our investment in simple low pricing and new ranges, powered by our new in-house teams.
“That positive customer reaction is great news for our shareholders, colleagues and suppliers.”
