Poundland supplier angry as owners face scrutiny over administration
Supplier warns of wider fallout
Highcrest, a family-owned business that mainly sells confectionery to Poundland, has an annual turnover of about £50m. Director Turner said the company could absorb the impact, but smaller and medium-sized suppliers had told him they could go under if Poundland did.
Turner said the consequences could extend beyond Poundland’s 12,000 employees to tens of thousands of other people. If the retailer enters administration, he said, suppliers might recover only “pennies in the pound”.
Turner urges owners to act
Turner said he was amazed Poundland was being put into administration, citing the company’s profitability. He urged Gordon Brothers to consider whether it could put a deal together so the retailer could remain solvent.
He said the situation was a nightmare for suppliers and staff, including employees who had worked at Poundland for many years. If stores are sold to new buyers, some workers may be able to find jobs at the same premises.
Questions over timing and scrutiny
Turner said he did not know whether Gordon Brothers had deliberately timed the administration process to benefit from high stock levels that could be sold. An insider familiar with the situation described the timing as “odd”, saying retailers rarely fail in the run-up to Christmas.
Business secretary Jonathan Reynolds is due to meet Gordon Brothers later this week. Reynolds and Prime Minister Andy Burnham have questioned why a deal to keep Poundland solvent was not reached.
Government seeks assurances
Dearden told the House of Commons she was deeply concerned about uncertainty over Poundland’s future and the effect on staff and their families. She said she would also meet Poundland executives on Wednesday.
Dearden said the government could ask whether the business was doing everything possible to protect employees and suppliers. She said the government stood ready to support workers moving into new employment, while its priority remained protecting jobs.
Key points
- Highcrest says it could lose millions if Poundland collapses.
- Turner warned that smaller suppliers could also go under.
- Gordon Brothers rejected a bid that would have kept Poundland in business.
- Ministers are seeking answers and say protecting jobs is a priority.