By Basant El-Faramawy
High street discount chain Poundland is preparing to file a notice of intention to appoint administrators, a move that puts around 12,000 jobs at risk. The retailer is set to enter insolvency after its owner, Gordon Brothers, rejected a takeover offer from Irish real estate firm Martin Property Group.
Takeover offer rejected
Gordon Brothers, which bought Poundland for £1 last year, turned down the bid from Martin Property Group even though management had named the Irish firm as its preferred bidder earlier this month. The owner launched a formal sale process for the retailer at the start of September.
Potential buyers
Several other parties are understood to be interested in acquiring parts of the business, including CDS Superstores (owner of Wilko and The Range), Fortress (owner of Poundstretcher), and Modella (owner of TG Jones). Advisers at AlixPartners have been appointed to oversee the insolvency process and assess offers for all or parts of the company.
Store closures and turnaround
Poundland currently operates around 600 stores across the UK. Over the past year, Gordon Brothers oversaw a major turnaround programme that included closing more than 100 shops in an effort to stabilise finances. Managing director Barry Williams told staff in a memo that the situation is "unexpected, unwanted and wholly avoidable."
