A second buyer has entered the race to rescue Poundland, with London-based Xyra Group making a bid to take over the whole business as it teeters on the brink of collapse. The offer includes immediately paying off £12.5m of an outstanding £30m loan, with the remainder deferred, according to sources familiar with the bid.
Gordon Brothers, the US investment firm that bought Poundland for £1 last June, has already rejected a previous bid from the Martin Property Group. Business Secretary Jonathan Reynolds held crunch talks with Gordon Brothers, urging the firm to protect workers. Prime Minister Andy Burnham has also questioned why a deal has not yet been struck.
Gordon Brothers said the business has faced years of instability and 'remains challenged and vulnerable'. The firm has committed to prioritising offers that protect shops and workers. 'We are pursuing all avenues through the sale process to find a solution which protects as many jobs as possible and preserves value,' the company said. 'Work continues at pace, engaging in active discussions on offers with interested parties.'
Doubts remain about the credibility of Xyra's offer. Sources said there is little evidence the company meets Gordon Brothers' tests, including whether it has the funds and would be a suitable long-term owner. Sources have pointed to the appointment of Andrew Brode to Xyra's board as a sign of its credibility; Brode works for RWS, a company that provides AI solutions for businesses. It is also unclear whether Xyra would keep Poundland together as its owner or break the company up.
Poundland’s founder, Steve Smith, said a collapse of the retailer would affect more than its 12,000 staff. He said two or three thousand suppliers who work solely for Poundland would also be caught up in the collapse, potentially affecting up to 30,000 overall.
Gordon Brothers reiterated their intent to find a solution that preserves value for all stakeholders. 'Our intent throughout the comprehensive sale process has been to protect as many jobs as possible and preserve value in order to deliver the best available outcome for all the people, creditors and local communities who care about this business as much as we do,' the firm said.