Major UK store files for administration with thousands of jobs at risk

It would be among the biggest retailers to go bust

Earlier this week it was reported that the directors appointed to the Poundland board just this month were getting ready to resign amid a dispute with the discounter’s majority owner, US investment Gordon Brothers.

Now, as per reports from Sky News, the retailer has filed a notice to appoint administrators, a move intended to buy the company time ahead of potential collapse.

The chain, which is headquartered in Walsall, was founded in 1990 by Dave Dodd and Steven Smith.

It originally sold all of its items at the single price of £1.

Thousands of job losses are now at risk following the decision by the directors which were recruited to steer Poundland through its emergency sale process less than two weeks ago.

As a result, one of Britain's biggest discount retailers could collapse within days.

The move to appoint administrators is a tactical one that will legally protect the chain from creditors for 10 days while its fate is decided.

A statement from Poundland said the move was made, "in order to bring stability".

It added: "Our stores remain open as normal and we thank our staff, suppliers and customers for their continued support."

Poundland has been working on a formal sale but has not received an "acceptable offer for the business as a whole".

"The process has however attracted several established retail operators who have made formal offers, collectively these cover a significant part of the business, and we believe offer the best available prospects for shareholders, creditors and to preserve jobs," it added.

What the dispute means for Poundland as thousands of high street jobs at risk

According to Sky sources, the dispute, centres on the shareholder's decision not to accept a solvent offer for the company from Martin Property Group, meant that Poundland was increasingly likely to be broken up.

The chain has more than 600 stores and employs over 10,000 people.

Who were the three appointed directors earlier this month?

Appointed to the Poundland board on 15 October were Andrew Kirkpatrick, a former adviser to Steinhoff International when it owned Poundland; Stephen Welch, who is overseeing efforts to revive British-based fintech FNZ; and Dominic Young, a former director of The Spectator's owner when it was sold to the hedge fund tycoon Sir Paul Marshall.

The trio, as Sky News reported, had expressed disquiet at what appeared to be attempts by Gordon Brothers to manoeuvre Poundland towards an insolvency process.

A solvent offer for the company was made by Martin Property Group.

That included preservation of a distribution centre in Andy Burnham's Makerfield constituency.

Meanwhile, The Telegraph reported at the weekend that another Irish company, Innovest Holdings, was also pursuing a solvent bid for Poundland.

However, on Tuesday morning the extent of its funding remained unclear.

What Poundland's potential collapse means for UK and Ireland

Poundland would be among the biggest retailers to go bust for years, if the collapse does happen.

Trading form about 600 stores, it employs over 10,000 people.

The chain remains one of the biggest general merchandise retailers in the UK, even following a store closure programme which was triggered last year by its sale.

Poundland also has a presence in the Irish retail market, taking its total number of outlets to between 550 and 600.