Poundland owner ‘not acting in best interests’ of workers, says No10
Poundland owner Gordon Brothers is “not acting in the best interests” of the discount retailer’s staff and stores as it hurtles towards collapse, Downing Street has said.
The Boston-based investment firm, which has faced intense criticism over its attempted sale of Poundland, must explain why it has rejected solvent offers to rescue the troubled retailer and its staff, No10 has warned.
Downing Street’s intervention comes amid growing political pressure on Gordon Brothers, as figures from Labour and Reform UK have criticised the Poundland owner for putting the firm’s 12,000 jobs at risk.
The Prime Minister’s official spokesman said on Tuesday: “We continue to stay close to what’s an extremely worrying situation for Poundland staff, their families and communities.
“Gordon Brothers need to explain why they haven’t accepted any offer to keep the company going. That’s the case. It appears they’re not acting in the best interests of their loyal UK staff and stores.”
Business secretary Jonathan Reynolds is due to meet with Gordon Brothers later this week while future of work minister Kate Dearden is set to hold talks with Poundland’s managing director and finance officer, Barry Williams and Shaun Wills, in the coming days, they added.
“Both the PM and the business secretary have been clear they want to know what’s happening,” the spokesman said.
Andy Burnham, whose Makerfield constituency is home to a Poundland distribution centre, last week urged Gordon Brothers to explain why it turned down rescue offers for the retailer.
Poundland’s owners turned down a solvent bid from Irish firm Martin Property Group because it did not offer up-front payment for a £30m loan which was inherited from the retailer’s previous owners, PepCo.
Innovest, an Irish investment firm, had also tabled a solvent bid for Poudland. This offer proposed to pay for the £30m loan up front but it is not being considered because the bidder could not provide proof of funds.
Reform slams ‘greedy’ owners
Robert Jenrick, Reform UK’s Treasury spokesman, told City AM on Monday that he has been offering support to multiple Poundland bidders as he hit out at “greedy” Gordon Brothers.
The government has faced pressure to intervene to secure the future of Poundland’s workers but shadow chancellor Andrew Griffith said on Tuesday that Labour should avoid an “interventionist” approach and instead cut costs for employers.
Poundland filed a notice to appoint administrators on Thursday last week, making it more likely that the company will be broken up between a horde of buyers.
Retailers including Lidl, Tesco, Iceland, B&M, The Range and Poundstretcher are among those hoping to pick up some of Poundland’s stores if the firm collapses.
Gordon Brothers believes it has found buyers for about half of Poundland’s 600 stores but is racing against time to find homes for the remainder of its estate before the moratorium lapses next Thursday, sources said.
Poundland’s owner has sought to reassure the government that it is acting in the best interests of the retailer’s employees, according to a letter reported by Sky News.
Mark Newton-Jones, the head of Gordon Brothers’s European operations, told the Business Department that a break-up offers the best hope of saving jobs, adding that the firm has invested £85m into Poundland since it took control of the company last year.