Ex-Poundland owner says he'd invest in firm

The former owner of Poundland has said he would invest in the firm as a government minister said she would meet the firm's board.

Steve Smith, who left the business in 2006, said he had attempted to contact owners Gordon Brothers having been "really surprised" to learn about them filing for administration when sales were up 11% on last year.

The BBC understands that Business Minister Kate Dearden will meet with senior Poundland executives later this week to discuss the company's threatened insolvency.

US-based Gordon Brothers said it was evaluating interest for the whole business and formal and indicative offers for significant viable parts of it.

Gordon Brothers, who bought the firm from Polish retail group Pepco last year for £1, has stopped funding the business and rejected a takeover offer from Irish firm Martin Property Group (MPG).

The retailer has given the business until Thursday to find a rescue deal, putting up to 12,000 staff at risk.

It's understood the meeting with Deardon will be predominantly a "fact finding" meeting with government sources conceding there is limited scope for the government to intervene in a commercial transaction albeit one that puts over 10,000 jobs and hundreds of stores at risk.

The meeting was first reported by Sky News.

There is no current meeting planned between the government and executives from current owners, US private equity group Gordon Brothers.

Concerns have been raised that Gordon Brothers have declined an offer from another buyer to keep Poundland afloat in order to ensure repayment of £30 million loan it inherited after buying the company for £1.

Prime Minister Andy Burnham has said the government was "ready to support" staff as he also called for answers over why an offer to buy the business had been rejected.

Smith, from Wolverhampton and who set up the firm in 1990 with a store in Burton-upon-Trent, Staffordshire, said he contacted the owners over the last three months but had no reply. He had thought that was good news as he assumed the firm must have had offers on the table.

"And maybe I was a bit too late, but I'd certainly... with talking to the staff and how Poundland's performing at the moment, I'd certainly, if there's an opportunity, I definitely want to put some money back in there."

He said he was still in touch with staff there at levels within the business and "even last week" sales were 11.2 % upon last year.

"Although Poundland made a loss last year, they're going to make a good profit this year, so it's just crazy."

He warned that the two or three thousand suppliers to the firm only worked for Poundland so they would be directly affected by its collapse.

"This is not just about 12, 000 jobs. I'm estimating more like 20 or 30,000 jobs," he added.

The company has 600 stores in the UK and Ireland, and Smith said it had between four and five million customers a week, so with Poundland not being present on high streets would "cause a lot of other retailers to fall as well".

Liam Byrne, chair of the Business, Innovation, Science and Trade Committee and Labour MP for Birmingham Hodge Hill and Solihull North, said he felt the company could be saved and "the whole deal stinks to high heaven right now".

"Because I think the issue that we've got is, you've got an owner that could well be trying to cut and run, to sell a business that is in fact a going concern in order to maximize their own profits and put in jeopardy 12,000 British jobs on the high street."

"Our message today to government and to ministers is, do not leave this to the last minute, which is Thursday... please get on the case now to get everybody around the table to maximize every option to save as much of the business as possible," he added.

In a statement, the board of Poundland Limited said it had been "working on a formal sale process for Poundland" and despite "enormous efforts it had not been possible to identify an acceptable offer for the business as a whole".

"We recognise any sale process creates uncertainty and particularly when set against a challenging UK economic environment."

Gordon Brothers said: "While Martin Property Group had been identified as the preferred bidder by Poundland's management team, attention must now turn to other active bids."

The interest, formal and indicative offers were being evaluated "with a view to minimising uncertainty for Poundland's people and all relevant stakeholders."

Follow BBC Wolverhampton & Black Country on BBC Sounds, Facebook, X and Instagram.