Poundland supplier 'will lose millions' if retailer collapses

Poundland supplier says it could “lose millions” if retailer fails

Adam Turner is sales director at Poundland supplier Hillcrest

One of Poundland’s suppliers has said it would lose millions if the company collapses.

Although that supplier would remain in business, there are fears that some smaller and medium-sized suppliers could go under.

That comes on top of the possibility of thousands of job losses among employees.

This week, politicians have been questioning representatives of Poundland owners Gordon Brothers, seeking “clarity” over the retailer’s plans.

Adam Turner, sales director at Highcrest Retail Brands - a family owned Bradford business - told the BBC that Poundland is one of Highcrest’s biggest customers, and that the two companies have worked together for decades.

Highcrest mainly supplies confectionary to Poundland and has a turnover of about £50m.

He said it would “lose a few million” if Poundland became insolvent, leaving a hole in its balance sheet next year.

Mr Turner said Highcrest was a “longstanding business that can stomach this”, but other medium and small suppliers had told him that “if Poundland goes under, so do they”.

That reflects a warning from Poundland founder Steve Smith on Monday that two or three thousand suppliers to the company, which only work for Poundland, would be directly hit by its collapse.

He said not only would 12,000 Poundland staff be affected, but potentially tens of thousands more as well.

If Poundland’s stores are sold to new owners, some staff may be offered new jobs at the same locations. However, it is understood that buyers are currently interested in only about half the stores - meaning roughly 6,000 employees would not be re-employed.

Mr Turner said the final three months of the year are the “golden quarter” for retailers. For sweets, Poundland receives Halloween stock from July and Christmas stock from September.

Those three months are when suppliers will be owed the most by Poundland.

If Poundland collapses, suppliers would get “pennies in the pound” back from the administration, he said, which is “very upsetting” - though he still hopes a deal can be reached so Poundland can stay solvent.

Poundland owners Gordon Brothers would be a secured creditor, meaning they would be first in line to recover their money, while suppliers “who have done nothing wrong” would bear the financial loss.

“It’s sad. It’s a nightmare for us all to be honest with you. It’s not just the suppliers, it’s the staff at Poundland, some of these guys have been there for many years.

“It’s from the warehouse staff all the way to the shop staff to everybody within head office. It’s a massive ripple effect through the supply chain,” he added.

Mr Turner said he did not know whether Gordon Brothers had deliberately timed Poundland’s move into administration so it could benefit from high stock levels, which it could then sell.

One way Gordon Brothers makes money is through stock liquidations - selling off stock from collapsed businesses.

An insider familiar with the situation told the BBC that the timing of Poundland’s collapse was “odd” - most retailers do not fail in the run-up to Christmas.

Gordon Brothers was contacted for comment.

Meanwhile, business secretary Jonathan Reynolds will meet Gordon Brothers later this week after he and Prime Minister Andy Burnham questioned why a solvent deal had not been reached.

Business minster Kate Dearden told MPs that government officials had also met representatives from Gordon Brothers on Monday.

“I am deeply concerned about the uncertainty surrounding Poundland’s future and the impact it could have on its staff and their families who are at the forefront of my mind,” Dearden told the House of Commons.

“Poundland is not currently in administration and the business continues to trade, but this is a worrying time for employees, suppliers and communities”, she added.

The minister confirmed she would also meet Poundland executives on Wednesday.

She said the government does not want to interfere with “current ongoing commercial negotiations”, but said ministers would seek “clarity” on the retailer’s plans.

“It’s absolutely legitimate for this government to ask the business if they’re doing everything they can to protect employees and suppliers up and down the country,” she added.

Dearden told MPs that the government would be ready to help the company’s employees if the current situation ends in administration.

“We stand ready to support them if they need to move into new employment, however... our priority is always in protecting jobs and the Secretary of State and I will continue to engage with the company to secure the best possible outcome,” she added.

The head of Gordon Brothers’ European operations reportedly told the government that the firm stood by its stewardship and had provided Poundland with £85m in extra financing since its purchase in 2025.