Three directors appointed to the Poundland board have resigned amid growing tensions between the discount retailer’s owners and potential buyers, raising further uncertainty about the company’s future. Andrew Kirkpatrick, Stephen Welch, and Dominic Young, all brought on board just 12 days ago to help steer the business through its challenges, stepped down on Wednesday in protest against the owner Gordon Brothers’ handling of the company’s restructuring.
The resignations follow a standoff over Gordon Brothers’ apparent intention to push Poundland towards insolvency, despite the existence of solvent bids, including one from Ireland’s Martin Property Group. Sources indicate the disagreement centers on the upfront payment Martin Property Group is willing to make. Gordon Brothers, which acquired Poundland for £1 last year, is reportedly seeking £30 million for the business, while Martin Property Group has offered roughly half of that sum up front, proposing to defer the remainder over two years. Although Gordon Brothers may consider accepting a smaller immediate payment to secure a deal swiftly, Martin Property Group has threatened to withdraw from negotiations.
The dispute comes as thousands of Poundland employees face an uncertain future, with the retailer operating about 600 stores across the UK and a workforce of approximately 12,000. Yesterday, Gordon Brothers released additional funds to ensure that employee wages could be paid on Thursday, but the move is unlikely to allay anxieties as the company reportedly explores breaking up the business. Discussions are underway with Fortress, owner of rival chain Poundstretcher, about a potential acquisition of hundreds of UK stores, while Henderson Property Group is said to be negotiating to acquire Poundland’s Irish division, Dealz, which operates 70 outlets. Innovest Holdings, another Irish group, has also surfaced as a possible buyer but has yet to demonstrate verified funding.
The departures raise questions about the future of Barry Williams, Poundland’s chief executive, who led a notable turnaround with sales growth of 6.7% in September followed by 8.4% during the first three weeks of October, according to a briefing sent to suppliers last week. Despite these gains, Gordon Brothers recently rejected Williams’s business plan for 2027, a decision causing concern among suppliers who have supported the retailer throughout its sale process, initiated in September.
The restructuring has been overseen by Alvarez & Marsal, appointed earlier this year to manage the auction process, although their continued involvement appears uncertain amid recent developments.
Government officials have so far remained silent on Poundland’s plight, but union representatives have contacted Downing Street and the Department for Business, Energy and Industrial Strategy, emphasizing the risk of substantial job losses. There is hope that the issue might attract the attention of Andy Burnham, given that Poundland’s largest distribution centre is located in his Makerfield parliamentary constituency.
A spokesperson for Gordon Brothers reiterated that while Martin Property Group had been the preferred bidder, other active bids remain under consideration, including those for the entire business and for significant parts of it. Requests for comment from Poundland and Alvarez & Marsal were not immediately returned.