Poundland founder warns 12,000 jobs could be gone for years if chain collapses

Poundland's founder has a blunt message for the chain's owners: take the deal, or thousands of people pay for it. Steve Smith, who opened the first store in Burton upon Trent in 1990, warned staff could be out of work for "years" if the retailer goes under. The discount chain, controlled by US restructuring specialist Gordon Brothers, filed a notice of intention to appoint administrators at the high court on Thursday, with advisory firm AlixPartners lined up to run the process.

That legal step shields Poundland from creditor demands until 12 November while a rescue is hunted. The clock is not being kind. Suppliers have held back deliveries, denting the chain's ability to trade, and the chances of dodging mass closures and job losses shrink by the day. Some 12,000 employees are staring at an uncertain Christmas.

Smith wants Gordon Brothers to accept an offer from Northern Ireland's Martin Property Group rather than call in administrators and carve the business up. The restructuring firm is understood to reckon a breakup brings in more money than the Martin bid. Smith, who sold his last shares for £250m in 2006, said he would back that offer but Martin doesn't need his cash. He had put in his own bid when Poundland was first put up for sale, heard nothing back, and says it's too late to launch another. "It was my baby," he said.

The Martin proposal runs to about £7.5m up front and the same again in deferred payments across two years, according to the Guardian. That would clear only half of a £30m shareholder loan, most of which Gordon Brothers took on when it bought the company. The package would also involve taking on a further asset-backed loan worth roughly £90m. Pepco, a former Poundland owner that holds the other £7.5m of the debt, is willing to wait for repayment to keep the business alive, as Sky News first reported — and Gordon Brothers still turned it down. The firm has been approached for comment.

"If they have got offers on the table, why is Gordon Brothers not taking it and saving all these people?" Smith said. He pointed out retail is brutal right now and that workers living week to week need their wages. His fear stretches well past the shop floor.

Smith reckons as many as 30,000 jobs could be on the line across Poundland's stores, its more than 2,000 suppliers — some of which deal only with the chain — and neighbouring high street businesses. He noted the retailer pulls in 4 million to 5 million customers every week. Poundland's management is due to meet Kate Dearden, the minister for the future of work, on Wednesday as political pressure piles on Gordon Brothers.