By Salma El-Sakka
A second buyer has entered the race to save discount retailer Poundland as the chain teeters on the brink of collapse, putting thousands of jobs at risk. London-based Xyra Group has offered to pay off half of Poundland’s outstanding debts immediately, a key sticking point in takeover talks so far.
Xyra Group's offer details
Sources familiar with the offer said Xyra is proposing to immediately pay £12.5 million of a £30 million loan on Poundland’s books, with the remainder deferred. The offer came as Business Secretary Jonathan Reynolds held crunch talks with Gordon Brothers, the US-based owners, urging the investment firm to protect staff however possible.
Gordon Brothers rejects rival bid
Gordon Brothers, which bought Poundland for £1 last June, has already rejected a rival bid from Irish property group Martin Property Group that would have saved its 12,000 staff. The company said the business has faced years of instability and “remains challenged and vulnerable.” It committed at the meeting to prioritise offers that protect its shops and workers.
Government intervention
Both Reynolds and Prime Minister Andy Burnham have questioned why a deal for the future of Poundland has not yet been made. Gordon Brothers said it is pursuing all avenues through the sale process to find a solution that protects as many jobs as possible and preserves value.
Credibility concerns
Doubts remain about the credibility of Xyra’s offer, as there is little evidence they meet Gordon Brothers’ tests, including whether they have the money and would be good long-term owners. Sources pointed to the appointment of Andrew Brode to Xyra’s board as a sign of credibility; Brode works for RWS, a company that provides AI solutions for businesses.
Supplier impact
Several Poundland suppliers have said they would also go bust if the retailer collapses. Founder Steve Smith said two or three thousand suppliers that solely work for Poundland would be caught up, potentially affecting up to 30,000 people overall, including the retailer’s 12,000 staff.
