Poundland could 'run out of money in days' ahead of 12 store closures

Bargain chain Poundland will run out of cash next week if a turnaround plan is rejected, the High Court has been told.

The retailer is asking a judge to approve an overhaul that will involve rents being slashed and the closures of dozens of stores and distribution centres. Another 11 branches are earmarked to pull down the shutters for good this coming Sunday.

Poundland owner private equity firm Gordon Brothers, which bought the struggling chain from Pepco Group for £1 in June, has vowed to pump £90million into the business in return.

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Its barrier told the High Court that if the restructure is not approved, its directors would likely place it into administration by Friday this week, when a loan to Pepco is due to be repaid.

In written submissions for the hearing in London, Tom Smith KC said that the retailer’s financial position had “significantly deteriorated during the last two years” and that it had “performed poorly in a difficult retail and economic environment”.

He said: “The latest liquidity forecast shows that the group will run out of cash in the week ending September 7 2025.”

Sources said the planned shake-up was not opposed by creditors. The judge could announce a decision by the end of Tuesday, or tomorrow.

Poundland, founded in Burton upon Trent, Staffordshire, in 1990, has approximately 14,700 staff members and operates around 800 stores.

Mr Smith said a “very significant amount of new money” would be injected into the company through the plan. He said: "The plan will release a further £60million of funding, and that is in addition to the £30 million that has already gone in following the purchase that took place on June 12. So, in effect, if you add everything up, Gordon Brothers is putting in £90million.”

As well as the store closures, which would put around 1,000 jobs at risk, Poundland also said it would close its frozen and digital distribution site at Darton, South Yorkshire, later this year and another warehouse at Springvale in Bilston, West Midlands, early next year.

A further 350 people will be affected by the warehouse closures, which are linked to the company’s plan to stop online sales through its Poundland.co.uk website.

Poundland first appeared at the High Court in July at what is known as a “convening hearing”, where barristers asked for a judge’s permission to convene “plan meetings” of its creditors to vote on the restructuring plan. Following the meetings earlier this month, barristers are now asking a judge to rubber-stamp the plans at what is known as a “sanctioning hearing”.

It came as Poundland confirmed the locations of a further 12 stores that will close under its restructuring and
recovery plan, including 11 this Sunday.

Poundland closures this week

• Blackburn
• Cookstown, Northern Irelandf
• Erdington, Birmingham
• Kimberley, Nottingham
• Horsham , Sussex
• Hull
• Kettering, Northants
• Omagh, Northern Ireland
• Shepherds Bush, London
• Southport, Merseyside
• Taunton, Somerset

Poundland also announced its store in Irvine, Scotland, will shut on September 14. Darren MacDonald, Poundland’s retail director, said: “When a store nearby closes, we understand how disappointing that is for customers, but nevertheless look forward to welcoming them to another Poundland store in the future.

"Work is underway to with colleagues through a formal consultation process in stores scheduled to close, exploring any suitable alternative roles.”