Poundland crisis branded 'disgraceful' as rejected bidder reattempts takeover

The looming collapse of Poundland has been dubbed ‘disgraceful’ by a retail veteran as politicians demand answers from its owners.The future of the discount retailer and its nearly 12,000 staff hangs in the balance as it prepares to call in administrators amid calls for US investment group Gordon Brothers to reconsider a rejected bid by a Northern Irish firm. Andy Street, the former managing director of John Lewis, is the latest to criticise the handling of rescue talks.Street, who was also Mayor of the West Midlands between 2017 and 2024, said: ‘The apparent dismantling [of the retailer] is disgraceful. Why has a viable bid been rejected in favour of breaking up the business?' ‘The owners must be called in to explain this. Poundland must be saved to protect thousands of jobs,' added Street, whose former constituency included Walsall where Poundland’s head office is. Dismay and outrage: The Prime Minister has said he will ask questions over the 'deeply worrying' situation at retailer Poundland His concerns echo those of the Prime Minister, who last night said he would demand answers and had instructed officials to establish the facts.The chain, which has 600 shops, filed a notice of intention to appoint administrators from AlixPartners with the High Court on Thursday, giving the business, bought by Gordon Brothers for less than £1 last year, some breathing room for ten days to find a rescue deal.But the Poundland brand and its shops will not be sold as a whole, leading to a carve-up of the 36-year-old retailer - and meaning jobs are at risk at any shop not bought.Staff cuts could hit 600 shops and a distribution centre in Makerfield, Burnham's constituency in Greater Manchester, which employs around 270 workers.Poundland's failure would mark one of the biggest High Street collapses since Debenhams closed its doors in 2021 with the loss of 12,000 jobs. In a statement on Thursday, the board of Poundland said that the latest move would 'bring stability' and 'several established retail operators' had made bids for 'a significant' number of shops.A spokesman said there had not been an 'acceptable offer' made for the business as a whole, even 'despite enormous efforts' in the last two months.This comes despite unions and the retailer’s management hoping that an earlier bid from Martin Property Group would be accepted so that business could be saved.The firm is reportedly still keen to buy the retailer and has contacted advisers AlixPartners, who are poised to handle an insolvency process, to make clear its continued interest, according to reports by Sky News.Talks between Gordon Brothers and Martin Property Group had broken down over the repayment of a £30million loan.> Union bosses warn of Poundland job losses before Christmas - what next for the retailer? Burnham said: 'We want to see jobs protected. If there was a potential owner to avoid this that hasn't been accepted, then the Business Secretary [Jonathan Reynolds] and I want to know why that is the case.' His concerns were echoed by Labour MP Liam Byrne, chair of the Commons Business and Trade Committee, who called for an urgent investigation.MPs have also expressed concern for workers in their constituencies. Labour MP for Clapham and Brixton Hill, Bell Ribeiro-Addy MP, said: ‘The owners must engage with workers and ministers, exploring every option to save jobs and shops.’Poundland has struggled in recent years after ‘straying from the single £1 price point that defined its core identity’ and expanding into selling clothes and frozen food, said retail expert Jonathan De Mello.Retailers are also battling higher costs, following Government moves to hike wages and employer National Insurance contributions, while shoppers have been lured in by online giants Amazon and Temu.Other firms thought to be hoping to buy shops include rival Poundstretcher, which is owned by US investment group Fortress, and retailers including Iceland and Lidl.CDS Superstores, the group behind The Range, Homebase and Wilko, is also thought to be interested. The group is owned by Chris Dawson, known as Britain’s ‘Del Boy Billionaire’.Modella Capital, which bought WH Smith on the High Street and rebranded under TG Jones, has also been rumoured to be involved in talks.Bally Auluk, national officer for the Union of Shop, Distributive and Allied Workers, said this week has been ‘incredibly distressing’ for Poundland staff and accused Gordon Brothers of attempting to ‘jeopardise their livelihoods.’He urged its owners to ‘reconsider and to prioritise a unified buyer’.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. 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