Ex-Poundland owner says he'd invest in firm
Steve Smith says he has attempted to contact owners Gordon Brothers but has had not reply.
Ex-Poundland owner says he'd invest in firm
Any sale process creates uncertainty, especially in the context of a difficult UK economic climate, the board of Poundland Limited has said.
The former owner of Poundland has said he would put money into the company, as a government minister says she will meet the retailer’s board.
Steve Smith, who left the business in 2006, said he had tried to get in touch with owners Gordon Brothers after being "really surprised" to hear they had filed for administration when sales were 11% higher than a year earlier.
The BBC understands that Business Minister Kate Dearden will meet senior Poundland executives later this week to discuss the company’s threatened insolvency.
US-based Gordon Brothers said it was assessing interest in the entire business, along with formal and indicative offers for substantial viable parts of it.
Gordon Brothers, which bought the company from Polish retail group Pepco last year for £1, has stopped funding the business and turned down a takeover bid from Irish firm Martin Property Group (MPG).
The retailer has given the business until Thursday to secure a rescue deal, putting as many as 12,000 staff at risk.
Steven Smith founded Poundland in 1990 with the help of his father, Kevin Smith.
It is understood the meeting with Dearden will mainly be a "fact finding" session, with government sources acknowledging there is limited room for the government to intervene in a commercial deal, even one that places more than 10,000 jobs and hundreds of stores in jeopardy.
No meeting is currently planned between the government and executives from the current owners, US private equity group Gordon Brothers.
There are concerns that Gordon Brothers rejected an offer from another buyer to keep Poundland going in order to ensure repayment of a £30 million loan it inherited after purchasing the company for £1.
Prime Minister Andy Burnham has said the government was "ready to support" staff, while also demanding answers over why an offer to buy the business was rejected.
Smith, from Wolverhampton, who launched the firm in 1990 with a store in Burton-upon-Trent, Staffordshire, said he had contacted the owners over the past three months but received no response. He had taken that as a positive sign, assuming the company must have had offers on the table.
"And maybe I was a bit too late, but I'd certainly... with talking to the staff and how Poundland's performing at the moment, I'd certainly, if there's an opportunity, I definitely want to put some money back in there."
He said he remained in contact with staff at different levels in the business and that "even last week" sales were 11.2% above last year.
"Although Poundland made a loss last year, they're going to make a good profit this year, so it's just crazy."
Staff at Poundland's customer support centre in Walsall staged a protest last week, with some dressing as the Poundland "Pound Hound" mascot.
He warned that the two or three thousand suppliers to the company only worked for Poundland, so they would be directly hit by its collapse.
"This is not just about 12,000 jobs. I'm estimating more like 20 or 30,000 jobs," he added.
The company has 600 stores in the UK and Ireland, and Smith said it had between four and five million customers a week, so if Poundland disappeared from high streets it would "cause a lot of other retailers to fall as well".
Liam Byrne, chair of the Business, Innovation, Science and Trade Committee and Labour MP for Birmingham Hodge Hill and Solihull North, said he believed the company could be saved and that "the whole deal stinks to high heaven right now".
"Because I think the issue that we've got is, you've got an owner that could well be trying to cut and run, to sell a business that is in fact a going concern in order to maximize their own profits and put in jeopardy 12,000 British jobs on the high street."
"Our message today to government and to ministers is, do not leave this to the last minute, which is Thursday... please get on the case now to get everybody around the table to maximize every option to save as much of the business as possible," he added.
In a statement, the board of Poundland Limited said it had been "working on a formal sale process for Poundland" and that despite "enormous efforts it had not been possible to identify an acceptable offer for the business as a whole".
"We recognise any sale process creates uncertainty and particularly when set against a challenging UK economic environment."
Gordon Brothers said: "While Martin Property Group had been identified as the preferred bidder by Poundland's management team, attention must now turn to other active bids."
The interest, formal and indicative offers were being assessed "with a view to minimising uncertainty for Poundland's people and all relevant stakeholders."
Poundland