Poundland owner releases £10m to retailer hours before MP grilling

Poundland's owner has released millions of pounds of funding to pay the discount retailer's suppliers - a breakthrough in talks about saving the company and its 10,500 staff.

Sky News has learnt that Gordon Brothers agreed to unlock roughly £10m held on Poundland's balance sheet on Tuesday, just hours before the US investment firm's top UK executive is grilled by MPs over its stewardship of the chain.

Industry sources said the release of the funds was "a vital step" but cautioned that it did not automatically mean that Poundland would be able to avert collapsing into administration as soon as this week.

Gordon Brothers' move comes after one of the solvent bidders for Poundland said the resumption of supplier payments was essential to the prospects of a deal.

Martin Property Group is said to remain interested in a deal, while another bidder, Xyra Group Holdings, has been reported to be the frontrunner to do a deal because it is offering to repay more of a £30m shareholder loan up front.

A notice of intention to appoint administrators expires on Thursday, and Poundland's directors will be unable to seek an extension to it unless they are confident that creditors' interests would not be compromised by doing so.

If they cannot be satisfied that that is the case, they would have no choice but to proceed with the appointment of AlixPartners as administrators.

That would pose a serious threat to roughly 10,500 jobs just weeks before Christmas, and leave Poundland's 600 stores in the UK and Ireland open to being cherry-picked by high street rivals.

The notice was filed after Gordon Brothers froze Poundland's bosses' access to company funds after accusing them of breaching the terms of its asset-based lending facility - an accusation they are said to reject.

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Poundland has not placed any supplier orders for at least two weeks, meaning that even the latest release of funding offers no guarantee of survival.

Gordon Brothers has rejected a number of going concern offers for Poundland on the basis that it would not receive adequate repayment of its share of a £30m shareholder loan for which it paid just £1.

Mark Newton-Jones, Gordon Brothers' top UK executive, will appear before MPs on the business and trade select committee on Wednesday to explain the firm's conduct.

Committee members are expected to grill him on the reasons for the sudden resignation of three Poundland directors just two weeks after their appointment, as well as Gordon Brothers' insistence that it is trying to salvage as many jobs as possible.

Poundland declined to comment, while Gordon Brothers could not be reached for comment.

(c) Sky News 2026: Poundland owner releases £10m to retailer hours before MP grilling