Poundland faces risk of collapse as owners consider offers for business
Poundland could enter insolvency within days
Discount retailer Poundland, which has seven shops in Sheffield, could be facing collapse and insolvency as its owners consider offers for part of the business.
Gordon Brothers, the private equity group that bought the business last year for £1, is understood to be leaning away from a proposed takeover for the business.
This means the group could potentially enter insolvency in the coming days.
The Irish real estate firm, Martin Property Group, was named as the preferred bidder by management earlier this month.
However, it is understood that this bid is not fully funded and would involve deferred payments, meaning some of the money would be paid later.
There are currently around 600 Poundland stores in the UK and Ireland, employing 12,000 people.
In Sheffield, there are seven stores, including one on the Moor, High Street and one in Meadowhall.
A spokesman for Gordon Brothers said: “While Martin Property Group had been identified as the preferred bidder by Poundland’s management team, attention must now turn to other active bids.
“As well as interest from buyers for the whole business, the sale process has also surfaced a number of formal and indicative offers for significant viable parts of the business from established retail operators.”
Gordon Brothers is assessing a number of other bids, largely from a retail rivals, which would involve buying parts of the Poundland business and ultimately see the company enter insolvency.
Wilko and The Range owner CDS Superstores, Poundstretcher owner Fortress and TG Jones owner Modella are all among companies interested in buying parts of the retailer.
This comes after the company’s major restructuring plan that saw a range of stores closing across the country last year, in an attempt to focus the retailer’s efforts on its strongest performing locations.
The spokesman for Gordan Brothers added: “These options will now be objectively evaluated, with a view to minimising uncertainty for Poundland’s people and all relevant stakeholders.”
Whilst it is positive that multiple buyer offers have been placed, uncertainty still remains over future store closures and job losses for thousands of people.