POUNDLAND will run out of money within days if a restructuring plan is not approved, the High Court has been told.
The company is asking a judge to approve a plan which would save it from entering administration, with barristers telling a hearing on Tuesday that it is set to run out of money by September 7 if the scheme is not sanctioned.
It announced plans to shut 68 stores in June after being sold by Pepco Group to Peach Bidco, a subsidiary of private equity firm Gordon Brothers, for £1[/caption]
Poundland, founded in Burton upon Trent, Staffordshire, in 1990, has approximately 14,700 staff members and operates around 800 stores.
It announced plans to shut 68 stores in June after being sold by Pepco Group to Peach Bidco, a subsidiary of private equity firm Gordon Brothers, for £1.
In written submissions for the hearing in London, Tom Smith KC, for Poundland Limited, said that the retailer’s financial position had “significantly deteriorated during the last two years” and that it had “performed poorly in a difficult retail and economic environment”.
He said: “The latest liquidity forecast shows that the group will run out of cash in the week ending September 7 2025.”
The barrister continued that if the restructure was not approved, the company’s directors would likely place it into administration by Friday.
In court, he said a “very significant amount of new money” would be injected into the company through the plan.
He said: “The plan will release a further £60 million of funding, and that is in addition to the £30 million that has already gone in following the purchase that took place on June 12.
“So, in effect, if you add everything up, Gordon Brothers is putting in £90 million.”
The retailer has already launched closing-down sales with discounts of up to 75% as it prepares to wind down locations by mid-October.
This month alone, 48 stores are set to shut, with 37 already closed and another 11 on August 31.
While Poundland has closed these stores to save cash, it has not yet surrendered the leases to landlords.
However, if the restructuring deal is approved it will let the company give up these leases.
The chain, which currently operates 800 stores, aims to reduce its footprint to between 650 and 700 locations.
The restructuring, led by investment firm Gordon Brothers after buying the chain for £1, also includes rent cuts at up to 180 stores and the closure of its frozen food and online shopping operations.
The Darton frozen distribution centre will shut later this year, while the Bilston national distribution centre will close in early 2026.
Poundland is consulting staff on potential job cuts and will end its online shopping service and loyalty scheme, Poundland Perks, by mid-September.
Loyalty scheme customers signed up to the Poundland Perks app have until January 15, 2026, to use their rewards vouchers.
Despite the downsizing, the retailer plans to expand its £1 product range and focus on womenswear and seasonal items.