Suppliers threaten to cut ties with Poundland as chain nears collapse

Major suppliers are moving to cut ties with Poundland as the discount chain lurches towards an insolvency process which threatens to unleash thousands of job losses.

Sky News understands that a number of big suppliers have begun taking steps to curtail deliveries to the discounter amid suggestions that they will not be paid as scheduled this week.

Industry sources said that Gordon Brothers, Poundland's majority owner, had restricted access to the company's finances, effectively preventing its management team from making routine payments.

The chain's roughly 10,500 staff were expected to be paid on time this month, however.

The deepening crisis means that Poundland is unlikely to avert collapse, with its directors potentially filing a notice of intention to appoint administrators as early as Thursday.

Sky News revealed on Tuesday that a trio of directors drafted in by Gordon Brothers just a fortnight ago were in the process of resigning in protest at the owner's behaviour, after a solvent takeover bid for Poundland was rejected in favour of an administration process.

The crisis at Poundland - which operates a distribution centre in Prime Minister Andy Burnham's Makerfield constituency - has already drawn attention from the government, with a senior official at the Department for Business, Innovation, Science and Trade making enquiries of participants in the sale process.

Retail executives are now predicting that a collapse of Poundland would become the most politically contentious retail insolvency since BHS ceased trading in 2016.

If a notice of intention to appoint AlixPartners as administrators is filed on Thursday, it will trigger a ten-day moratorium while Poundland's management scramble to salvage as many jobs as possible.

Sources said that relations between Gordon Brothers and the chain's management team, who have fought to secure a solvent outcome for the business, had deteriorated sharply in recent weeks.

One suggested that Poundland executives had been accused by Gordon Brothers of breaching the terms of an asset-based lending facility by failing to submit a budget to the shareholders on time despite an agreed grace period - with the business now outperforming those forecasts.

The filing of a notice to appoint administrators within hours of John Healey's budget will be interpreted as a wider blow to the government, with retailers complaining it did nothing to address the industry's concerns about rising costs.

"There is no reason for Poundland to be in insolvency proceedings," said one source close to the process.

Irish-based Martin Property Group had made a solvent offer for the company - including preserving the Makerfield warehouse - and there were still faint hopes on Thursday morning that a change of stance from Gordon Brothers might allow it to be revived.

Poundland trades from about 600 stores, including via the Dealz chain in Ireland.

A minority stake in the company is owned by Warsaw-listed Pepco Group, which sold a £30m shareholder loan to Gordon Brothers during the summer for just £1.

Gordon Brothers has been insisting during the eight-week sale process that potential bidders repay the full £30m - which Martin Property Group had agreed to do at maturity.

However, the current owner is understood to have expressed concern that Poundland could be liquidated before that date, meaning it would miss out on full repayment of the loan.

A pack of retailers, including rival Poundstretcher, B&M, Iceland and The Range, have expressed interest in varying numbers of Poundland stores.

Even after a store closure programme triggered by its sale last year, Poundland remains one of the biggest general merchandise retailers in the UK.

Neither Poundland nor Gordon Brothers could be reached for comment.

(c) Sky News 2026: Suppliers threaten to cut ties with Poundland as chain nears collapse