Poundland gets £10m lifeline as midnight rescue deadline looms

Poundland has been handed a £10m release of funding by its US owners, a move sources close to the situation told the BBC could at least postpone the discount chain's collapse while a longer-term fix is hunted down. The money is described as “small in the scale of things,” but it buys breathing room as a deadline to find a buyer for the business ticks towards midnight on Tuesday. Around 11,000 jobs hang on the outcome.

The chain has been sliding towards administration after Gordon Brothers, which bought Poundland for £1 last year, blocked it from touching cash sitting in its own bank accounts. The BBC understands about £50m was frozen, leaving bosses unable to restock shelves across its 600 shops. Gordon Brothers has denied accusations that it wants to profit by selling those stores and their stock off piecemeal. A committee of MPs will question the investment firm on Wednesday.

Poundland's 10-day moratorium, which shields it from creditors, runs out on Thursday. If a solvent deal looks possible, that deadline could stretch further. Pressure on the owners is still hot after a takeover bid was rejected — a decision that drew calls for answers from politicians, including Prime Minister Andy Burnham.

The two sides don't agree on how the business is doing. Poundland boss Barry Williams told staff last week that like-for-like sales rose 11.4%, a stretch that included Halloween and came in £1.5m ahead of budget. He said the chain made £18.1m profit in the year to September, a “strong recovery” from £68m of losses the year before. Gordon Brothers counters that Poundland remains “challenged and vulnerable to any potential downturn in future trading.”

Poundstretcher, Tesco and B&M are among those interested in picking up stores, which could keep workers employed if the chain is carved up. The crunch question is whether selling in chunks saves more jobs than a single buyer willing to keep Poundland running as a national chain.