One of Poundland’s suppliers has said it will lose millions if the firm collapses. While that supplier will stay afloat, it is feared that some small and medium-sized suppliers could go under. This is in addition to potentially thousands of job losses among staff. Politicians have been putting questions to representatives of Poundland owners Gordon Brothers this week seeking “clarity” on plans for the retailer.
Adam Turner, sales director at Highcrest Retail Brands – a family owned Bradford business – told the BBC that Poundland was one of Highcrest’s biggest customers, and that the firms have had a relationship for decades. Highcrest mainly sells confectionary to Poundland, and turns over about £50m. It will “lose a few million” if Poundland becomes insolvent, so it will have a gap in its balance sheet next year, he said. Highcrest was a “longstanding business that can stomach this”, but other medium and small suppliers have told him that “if Poundland goes under, so do they”, Mr Turner said.
This echoes a warning from Poundland founder Steve Smith on Monday that two or three thousand suppliers to the firm, which only work for Poundland, would be directly affected by its collapse. Not only 12,000 Poundland staff would be affected, but also potentially tens of thousands more, he said. If Poundland’s stores are sold to new buyers, some of the employees may get new jobs on the same premises. However, it is understood that buyers are only interested in about half the stores at present – meaning roughly 6,000 employees would not be re-employed.
Poundland’s founder offers to invest in firm Mr Turner said that the last three months of the year is the “golden quarter” for retailers. In terms of sweets, Poundland will get its Halloween stock in from July, and Christmas stock in from September. These three months will be the time of year when suppliers will be owed the most by Poundland. If Poundland goes under, suppliers will be getting “pennies in the pound” back from the administration, he said, which is “very upsetting” – although he still hopes a deal can be done so Poundland can remain solvent.
Poundland owners Gordon Brothers will be a secured creditor, which means they are first in line to get their money back, and suppliers “who have done nothing wrong” will take the financial hit. “It’s sad. It’s a nightmare for us all to be honest with you. It’s not just the suppliers, it’s the staff at Poundland, some of these guys have been there for many years.
“It’s from the warehouse staff all the way to the shop staff to everybody within head office. It’s a massive ripple effect through the supply chain,” he added. Mr Turner said he had no knowledge of whether Gordon Brothers had deliberately timed the process of Poundland going into administration so it could take advantage of having high stock levels, which it can then sell. One of the ways Gordon Brothers makes money is through stock liquidations – selling off stock from collapsed businesses.
One insider familiar with the situation told the BBC that the timing of Poundland facing collapse was “odd” – most retailers don’t fall over in the run-up to Christmas. Gordon Brothers was approached for comment. Meanwhile, business secretary Jonathan Reynolds will meet with Gordon Brothers later this week after he and Prime Minister Andy Burnham questioned why a solvent deal had not been made. Business minster Kate Dearden told MPs that government officials had also met with representatives from Gordon Brothers on Monday.
“I am deeply concerned about the uncertainty surrounding Poundland’s future and the impact it could have on its staff and their families who are at the forefront of my mind,” Dearden told the House of Commons. “Poundland is not currently in administration and the business continues to trade, but this is a worrying time for employees, suppliers and communities”, she added. The minister confirmed she would also be meeting with Poundland executives on Wednesday. She said the government doesn’t want to interfere with “current ongoing commercial negotiations”, but said ministers would be seeking “clarity” on the plans for the retailer.
“It’s absolutely legitimate for this government to ask the business if they’re doing everything they can to protect employees and suppliers up and down the country,” she added. Dearden told MPs that the government would be ready to help the company’s employees, should the current situation end in administration. “We stand ready to support them if they need to move into new employment, however… our priority is always in protecting jobs and the Secretary of State and I will continue to engage with the company to secure the best possible outcome,” she added. The head of Gordon Brothers’ European operations reportedly told the government that the firm stood by its stewardship and had given Poundland £85m in additional financing since its purchase in 2025.
