Poundland Secures Rescue Deal to Avoid Collapse
Poundland has successfully averted collapse following the approval of a rescue deal by the High Court. The discount retailer sought permission from a High Court judge for a restructuring plan that includes reducing rents, closing numerous stores, and distribution centers.
The company warned that without the green light for the overhaul, it could face insolvency by the end of the week. The approved plan will inject up to £60 million in new funding to sustain Poundland.
Sir Alastair Norris, in endorsing the restructure, stated that he would provide detailed reasons later. Poundland has already disclosed plans to shut down 68 branches, with 11 set to close this week and another in early September.
The private equity firm Gordon Brothers, which acquired Poundland for £1 in June from Pepco Group, is committed to injecting £90 million into the business. Managing director Barry Williams expressed gratitude for the court’s decision, emphasizing the importance of stabilizing the business to secure jobs and store operations.
The company’s lawyer had warned that failure to approve the restructure could lead to administration by the end of the week, given Poundland’s deteriorating financial status over the past two years. Poundland, established in 1990 in Staffordshire, employs around 14,700 staff and operates approximately 800 stores.
The restructuring plan includes additional funding of £60 million, in addition to the £30 million already invested by Gordon Brothers. Alongside store closures, Poundland will shut down its frozen and digital distribution sites, affecting around 1,000 jobs.
Further closures are planned without specific locations identified yet, with announcements expected later in the year. The company’s focus is now on revitalizing its operations to drive growth, improve product ranges, and enhance customer experience.
Poundland’s restructuring and recovery plan have progressed following court approvals, with store closures and operational changes aimed at ensuring the company’s long-term viability.