Poundland’s American owners have released funds to help the struggling discount chain temporarily restock its shelves, keeping hopes for a rescue deal alive ahead of crucial talks with the government.
In a move dubbed “Operation Gloria,” named after the Gloria Gaynor song “I Will Survive,” Poundland dispatched around 16 million grocery items to 600 stores in the UK and Ireland over the weekend. Staff shared a defiant social media video showing pallets of Yorkshire Tea and Pot Noodles being delivered to shops.
This emergency resupply follows Gordon Brothers agreeing to release £21 million of a total £50 million that had previously been withheld, which MPs claimed endangered the business. The funds will give Poundland breathing space while supplier deliveries continue, especially in the lead-up to Christmas.
The chain filed a notice of intention to appoint administrators late last month, putting its 12,000 employees and about 2,000 suppliers in a precarious situation. Last week, Poundland was granted an extension for legal protection from creditors, allowing until 26 November to find a buyer.
As discussions ramp up, concerns have surfaced regarding Gordon Brothers’ interests, with allegations—denied by them—suggesting they may wish to break up the business, despite indications of an improvement in trading performance.
Gordon Brothers purchased Poundland for a nominal £1 from the Polish retail group Pepco last year and has claimed to have saved the company from collapse. However, MPs have accused them of extracting significant sums while the chain teeters on the edge. Liam Byrne, chair of the business select committee, compared Gordon Brothers to “the wolf of Wall Street, on the British high street.”
Documents revealed to MPs show that the investment firm has taken nearly £20 million in interest and fees since acquiring Poundland. Gordon Brothers stated that they did not freeze funds that should have been available to the company and pointed to loans provided to support it through this crisis.
Business Secretary Jonathan Reynolds plans to meet with Poundland and Gordon Brothers before the administration deadline to ensure a resolution. He and Andy Burnham have raised concerns about the conduct of Gordon Brothers in light of the company’s situation, with the Prime Minister questioning why the US firm has not accepted offers for a business that employs thousands.
Poundland is reportedly in talks with three potential buyers, but interest from investment groups Xyra and Innovest seems limited. Martin Property Group, a Northern Irish firm, is the preferred bidder, though negotiations have stalled over loan repayment terms. Several high-street retailers, including Tesco, are also eyeing Poundland’s locations.
The Guardian has contacted Gordon Brothers, the business department, and Poundland for their comments.
