Poundland’s founder has warned that the retailer’s collapse could put as many as 30,000 jobs at risk.
Steve Smith, who no longer owns the discount chain, has accused its current owners of being “greedy” as Poundland faces the prospect of administration.
The company’s future remains uncertain, with pressure mounting on US investment group Gordon Brothers to reconsider its decision to reject a bid from Northern Irish firm Martin Property Group, which says it can save the business.
Mr Smith, who co-founded Poundland in 1990, said a collapse would affect far more than the retailer’s own workforce and could result in tens of thousands of job losses across the wider supply chain.
“If Gordon Brothers are being greedy then it is going to cost thousands of jobs,” he wrote in a lengthy LinkedIn post. “In the newspapers it says 12,000 jobs are at risk. My estimate is more like 30,000 jobs.”
He said the potential losses extended beyond Poundland employees, warning that the retailer’s thousands of suppliers could also be hit. Some, he claimed, depended almost entirely on the chain and could themselves be forced into administration.
Mr Smith also argued that if Poundland entered administration, taxpayers would ultimately bear the cost of supporting thousands of unemployed workers, while liquidators would “make a lot of money”.
He added that he had attempted to contact the current owners “several times”, but claimed they “never returned my call”.
A Poundland store in Croydon, south London. The discount retailer’s future hangs in the balance as calls grow for US investment group Gordon Brothers to reconsider its rejection of a Northern Irish bid to save the company
The Daily Telegraph reported that Mr Smith’s own attempt to buy Poundland back had been rejected, despite him having sufficient funding to purchase the entire business at its current £30million valuation.
He said Gordon Brothers had refused to engage meaningfully with his proposal and confirmed that he now backed the offer from Martin Property Group.
Mr Smith is the latest prominent voice to criticise the owners’ approach to the retailer’s rescue negotiations.
A Poundland collapse would be one of the biggest high street failures since Debenhams shut its stores in 2021, resulting in the loss of about 12,000 jobs.
Sir Andy Street, the former managing director of John Lewis and former Mayor of the West Midlands, said the apparent dismantling of Poundland was “disgraceful”. He asked: “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, home to Poundland’s head office.
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Meanwhile, Prime Minister Andy Burnham said he wanted to protect jobs. His Makerfield constituency includes a Poundland distribution centre where 270 positions could be lost.
“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 includes 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 said a collapse 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.