Poundland's future hangs in the balance as chain edges towards collapse

Poundland's future appears uncertain as the discount retailer edges closer to collapse, according to the BBC. It has filed a notice to appoint administrators, a move that, if approved by the High Court, will grant the business ten days to seek a rescue deal.

Managing director Barry Williams informed his 12,000 employees across the 600 stores on Tuesday that the American owner of the chain had restricted Poundland's access to funding. The retailer, which struggled previously, was purchased from Polish group Pepco by Gordon Brothers for a nominal sum of £1 last year. However, only a year later, Poundland was put up for sale in September.

An Irish firm, Martin Property Group (MPG), reportedly submitted a bid to acquire the business as a going concern, but it falls short of Gordon Brothers' expectations. Gordon Brothers seeks to recover a £30m shareholder loan inherited from the previous owners as part of its deal, but MPG was not willing to pay the full amount upfront.

At present, Poundland is on the brink of an insolvency process, with Gordon Brothers exploring two options: seeking a new owner through a pre-pack administration or breaking the business apart to sell portions to interested parties such as Iceland, Lidl, and B&M.