MPs tell ministers to shield Poundland from predatory capitalism

Poundland's future is hanging by a thread, and Westminster is done watching quietly. MPs piled pressure on the government Tuesday over the discount chain's collapse-in-progress, urging ministers to shield it — and its 12,000 workers — from what one Labour MP called predatory capitalism.

The chain filed a notice of intention to appoint administrators at the high court last Thursday. US restructuring specialist Gordon Brothers, which owns Poundland, has lined up AlixPartners to run the process. But the political temperature is rising: in an urgent Commons question, Labour MP Gareth Snell demanded the government send Gordon Brothers a message that asset-stripping won't be tolerated, saying Britain stands with people before profit. Fellow Labour MP Antonia Bance pushed for an urgent review of whether corporate governance and insolvency rules do enough to block asset stripping and short-term financial engineering. Green MP Hannah Spencer went further, calling the situation a scandal that exposes how private equity vultures load up high street brands with debt and then ditch them for profit.

The government says it's not sitting on its hands. Minister for the future of work Kate Dearden told parliament officials held talks with Gordon Brothers Monday night, and she'll meet Poundland's management alongside shop workers' union Usdaw on Wednesday. Business secretary Jonathan Reynolds is set to meet Gordon Brothers again later this week. Dearden said ministers can't wade into commercial negotiations, but they are pressing the company to accept it has responsibilities as well as rights over Poundland and its staff.

Time is not on Poundland's side. Suppliers have held back deliveries, hurting its ability to trade, and the odds of dodging mass closures and job losses shrink by the day. Gordon Brothers is understood to be in talks with at least two potential buyers for the whole company: Northern Ireland's Martin Property Group, with a fully funded offer, and Innovest, reportedly advised by former Reform election candidate Charles Bunker, with partial funding in place. According to the Guardian, Gordon Brothers is unwilling to take Martin Property's roughly £15m offer — only half payable immediately — because it falls short of repaying a £30m shareholder loan.

The prime minister's spokesperson said the situation is extremely worrying for Poundland staff, their families and communities, and that Gordon Brothers needs to explain why it hasn't accepted any offer to keep the company going. In a letter to the government reported by Sky News, Gordon Brothers executive Mark Newton-Jones defended the firm, saying it has pumped £85m of additional financing into Poundland since buying it for £1 last year and that the chain has returned to underlying profit. But he added that rising inflation, staffing costs and shoplifting-driven shrinkage mean it still isn't cash-generative at a sustainable level.

Dozens of MPs from across the UK want reassurance for their constituents, while Conservative business spokesperson Bradley Thomas blamed the government, saying the economic landscape is hostile to British business. Poundland founder Steve Smith told the Guardian that staff could be out of work for years if the chain goes under. Gordon Brothers was approached for comment.