By Karim Hammam
High street discounter Poundland has filed a notice of intention to appoint administrators, putting the future of around 12,000 workers in jeopardy. Court filings show the retailer submitted the notice on Thursday afternoon, granting the business 10 working days of protection from creditors while advisers seek a rescue deal.
Administration process and potential rescue
The move provides breathing space for negotiations with parties interested in acquiring the brand and a significant number of stores. Corporate advisory firm AlixPartners is expected to be appointed as administrators. Poundland stressed that all its roughly 600 UK stores remain open and trading as normal during the insolvency process.
Management statement
Managing director Barry Williams said that despite enormous efforts, an acceptable offer for the business as a whole could not be identified. However, the process has attracted several established retail operators who have made formal offers covering a significant part of the business, which he believes offer the best prospects for shareholders, creditors and job preservation.
Background and interested parties
The development follows owner Gordon Brothers' rejection of a takeover offer from Irish real estate firm Martin Property Group, which management had named as their preferred bidder earlier this month. Gordon Brothers, which acquired Poundland for £1 last year, launched a formal sale process in September. Interested buyers include CDS Superstores (owner of Wilko and The Range), Fortress (owner of Poundstretcher) and Modella (owner of TG Jones). Any deals are unlikely to encompass all Poundland stores, meaning some job losses are probable. Gordon Brothers had previously overseen a turnaround programme that saw more than 100 shops closed over the past year to shore up finances.
