Poundland has avoided administration after the High Court approved its turnaround plan just days before the retailer was due to run out of cash. The budget chain, which employs around 14,700 staff across 800 stores, had warned it would have been insolvent by 7 September without intervention.
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The restructuring involves a substantial cash injection, with private equity owner Gordon Brothers committing £90 million in total, including £60 million under the new plan and £30 million previously invested following the June acquisition. The plan also pushes back £276.5 million in loan repayments by three years, introduces a £30 million overdraft facility, and reduces some rents.
Poundland has already announced the closure of 68 stores, alongside the shuttering of two distribution centres, resulting in further job losses. Managing director Barry Williams said the focus would now be on stabilising and growing the business by "revamping ranges, lowering prices" and creating a "simpler and more focused Poundland."
The retailer, founded in Staffordshire in 1990, had reported a pre-tax loss of £35.7 million in the last financial year and faced added pressure from rising National Insurance contributions. Many stores were reportedly paying "higher than market rates" in rent, contributing to unprofitability. The court approved the plan without opposition, securing Poundland's immediate future.
Source: www.bbc.com
