The founder of Poundland has warned the store’s collapse could trigger 30,000 job losses.
Steve Smith, who no longer owns the business, has accused Poundland’s current owners of being ‘greedy’ as the retailer teeters on the brink of administration.
The future of Poundland hangs in the balance amid calls for the current owners, US investment group Gordon Brothers, to reconsider a rejected bid by a Northern Irish firm to save the company.
Mr Smith has claimed that should the company be allowed to collapse it could trigger the loss of a whopping 30,000 jobs across multiple areas.
‘If Gordon Brothers are being greedy then it is going to cost thousands of jobs, in the newspapers it says 12,000 jobs are at risk. My estimate is more like 30,000 jobs,’ he said in a lengthy post on LinkedIn.
‘It is not just the people that work for Poundland it is also their suppliers they have thousands of suppliers, some that just serve them, therefore these suppliers will suffer or be at risk of going into administration.’
Mr Smith added that if Poundland, which he co-founded in 1990, does go into administration it will be taxpayers who will foot the bill for the thousands of people out of work while the liquidators will ‘make a lot of money’.
He also claimed that he tried ‘several times’ to speak to the current owners but they ‘never returned my call’.
A Poundland in Croydon, south London. The future of the discount store hangs in the balance amid calls for the current owners, US investment group Gordon Brothers, to reconsider a rejected bid by a Northern Irish firm to save the company
The Daily Telegraph reported that Mr Smith had his own bid to buy back Poundland rebuffed despite having enough funding to buy the entirety of the business at its current £30million valuation.
He claimed that Gordon Brothers refused to meaningfully engage with his bid and he now supported the bid from Martin Property Group.
Mr Smith is just the latest figure to criticise the owners’ handling of rescue talks.
Should Poundland collapse it would mark one of the biggest high street collapses since Debenhams closed its doors in 2021 which led to the loss of around 12,000 jobs.
Sir Andy Street, the former managing director of John Lewis and former Mayor of the West Midlands, said yesterday: ‘The apparent dismantling [of the retailer] is disgraceful. Why has a viable bid been rejected in favour of breaking up the business?’
‘The owners must be called in to explain this. Poundland must be saved to protect thousands of jobs,’ added Sir Andy, whose former constituency included Walsall where Poundland’s head office is.
Meanwhile, the Prime Minister – whose Makerfield constituency houses a Poundland distribution centre where 270 jobs could be lost – said he wanted to protect jobs.
‘We want to see jobs protected. If there was a potential owner to avoid this that hasn’t been accepted, then the Business Secretary [Jonathan Reynolds] and I want to know why that is the case,’ said Andy Burnham.
Prime Minister Andy Burnham – – whose Makerfield constituency houses a Poundland distribution centre where 270 jobs could be lost – said he wanted to protect jobs
In a social media post, Reform’s Robert Jenrick claimed that should the company collapse it would be an example of ‘crony capitalism’.
He said: ‘People have attacked me for taking up this fight, saying: ‘Businesses go under all the time, that’s just the free market’.
‘Sure, but this is crony capitalism and the 12,000 workers deserve better.’
Poundland has struggled in recent years after ‘straying from the single £1 price point that defined its core identity’ and expanding into selling clothes and frozen food, said retail expert Jonathan De Mello.
Retailers are also battling higher costs, following Government moves to hike wages and employer National Insurance contributions, while shoppers have been lured in by online giants Amazon and Temu.
Other firms thought to be hoping to buy shops include rival Poundstretcher, which is owned by US investment group Fortress, and retailers including Iceland and Lidl.
CDS Superstores, the group behind The Range, Homebase and Wilko, is also thought to be interested. The group is owned by Chris Dawson, known as Britain’s ‘Del Boy Billionaire’.
Modella Capital, which bought WH Smith on the High Street and rebranded under TG Jones, has also been rumoured to be involved in talks.
Bally Auluk, national officer for the Union of Shop, Distributive and Allied Workers, said this week has been ‘incredibly distressing’ for Poundland staff and accused Gordon Brothers of attempting to ‘jeopardise their livelihoods’.
He urged its owners to ‘reconsider and to prioritise a unified buyer’.
The Daily Mail has approached Gordon Brothers and Pepco for a comment.
