Poundland's US owner calls retailer 'vulnerable' as 12,000 jobs hang in balance

Poundland filed a notice to appoint administrators last week, putting the jobs of its roughly 12,000 workers at risk while its US owner hunts for a rescue buyer.

Gordon Brothers, the US restructuring specialist that bought the high street chain last year for £1, said on Thursday that the business remains "challenged and vulnerable". The statement came a day after executives from Gordon Brothers and Poundland separately met government ministers to discuss the retailer's future.

The owner said it was still in "active discussions" with interested suitors and had been seeking to "protect as many jobs as possible". Advisers remain in talks with parties interested in buying the brand and a large number of stores, roughly two months after the sale process launched at the start of September.

A Gordon Brothers spokesperson said: "We are pursuing all avenues through the sale process to find a solution which protects as many jobs as possible and preserves value."

They added: "Work continues at pace, engaging in active discussions on offers with interested parties."

Why is Poundland on the brink?

The chain is close to collapse despite receiving solvent takeover offers. Gordon Brothers, under pressure to accept a bid, ceased providing funding to the retailer. Poundland's board has lined up advisory firm AlixPartners to run the process.

Last week's notice of intention to appoint administrators gave the business 10 working days of breathing space from creditors to secure a potential rescue deal before potentially entering insolvency.

Gordon Brothers defended its stewardship in its Thursday statement. "When Gordon Brothers acquired the business, it was in distress and required a radical restructure, urgent operational change and significant funding, which we provided to support the company's ability to trade," the spokesperson said.

They added: "In spite of our efforts and the tremendous efforts of management to deliver a turnaround, the business remains challenged and vulnerable to any potential downturn in future trading."

"Our intent throughout the comprehensive sale process has been to protect as many jobs as possible and preserve value in order to deliver the best available outcome for the people, creditors and local communities who care about this business as much as we do."

What do politicians want?

The prime minister, Andy Burnham, said the owner needs to find a "practical solution" to keep stores open and save jobs. He said the government was "prepared to find what we can do" to help save the chain.

Asked what his message was to Poundland's executives, Burnham said: "Focus on the people in your employment … Come up with a practical solution that saves jobs and saves those stores because many of them are viable propositions."

He added: "They're on high streets. They matter in our communities. There is a solution to be found here. Sit down with us and let's find it."

What about the suppliers?

Suppliers facing millions of pounds in losses if Poundland collapses told the Guardian on Thursday that the chain's US owner should not be permitted to maximise its return at their expense.

The clock is now the story. With the 10-working-day protection from creditors running and solvent offers on the table, Gordon Brothers faces a narrowing window to convert talks into a deal — or hand the chain to administrators and leave 12,000 workers, plus creditors owed millions, waiting on the outcome.