Poundland owner breaks its silence as it warns chain is “vulnerable”
The owner of Poundland has insisted it is working to protect as many jobs as possible, but warned that the Willenhall-headquartered discount chain remains “vulnerable” to any downturn in trading.
In a statement to TheBusinessDesk.com, a spokesperson for Gordon Brothers said: “We are pursuing all avenues through the sale process to find a solution which protects as many jobs as possible and preserves value. Work continues at pace, engaging in active discussions on offers with interested parties.”
The US-based investor, which bought Poundland from Pepco for £1 last year, said it had stepped in when the business was already struggling.
“We recognise the Poundland business has faced several years of instability,” the spokesperson said. “When Gordon Brothers acquired the business, it was in distress and required a radical restructure, urgent operational change and significant funding, which we provided to support the company’s ability to trade.
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“In spite of our efforts and the tremendous efforts of management to deliver a turnaround, the business remains challenged and vulnerable to any potential downturn in future trading.”
The statement came after Gordon Brothers met Business Secretary Jonathan Reynolds yesterday (Wednesday). According to City AM, the firm committed to protecting jobs at the meeting, and Reynolds stressed that it “must do everything in their power to protect jobs”.
City AM also reported that Gordon Brothers is still considering a £12.5m offer from new bidder Xyra Group Holdings for the business as a going concern. However, Xyra must prove it has the funds and address its lack of retail experience.
The pressure on the owner has been building across Westminster. Prime Minister Andy Burnham told Poundland’s owners: “Focus on the people in your employment. Come up with a practical solution that saves jobs and saves those stores because many of them are viable propositions.”
Meanwhile, business minister Lord Leong caused a stir in the House of Lords when he was asked if he could “rule out specific Poundland subsidy or nationalisation as a solution”. He replied: “The answer is no.”
According to the Daily Mail, departmental officials later said he had “misspoken”, and a Whitehall source added: “There are no plans to nationalise Poundland.” Shadow chancellor Andrew Griffith said nationalising the chain would be “insane”.
Gareth Snell, the Labour MP for Stoke-on-Trent Central, told The Telegraph that Gordon Brothers was guilty of “predatory capitalism”.
Shopworkers’ union Usdaw, whose national officer Bally Auluk met employment minister Kate Dearden and Poundland’s senior management yesterday, said the owner had refused to talk to it.
“We are aware that Poundland’s owners are set to meet with the Business Secretary, which is welcome, but we urge Gordon Brothers to engage directly with Usdaw as the trade union for Poundland staff, which they have so far refused to do,” Auluk said.
Poundland filed a notice of intention to appoint administrators last week. The moratorium protecting it from creditors runs until 12 November. Around 12,000 jobs and more than 600 stores are at risk.
Gordon Brothers has also been asked to appear before the Commons business and trade committee next week.
