Poundland Founder Warns of 30,000 Job Losses Amid Owner Dispute

The founder of Poundland has warned that a collapse of the discount retailer could lead to the loss of up to 30,000 jobs. Steve Smith, who no longer owns the business, has accused its current owners, US investment group Gordon Brothers, of being 'greedy' as reports suggest the company may be placed into administration.

Smith, who co-founded Poundland in 1990, stated that the potential job losses extend beyond direct employees to include thousands of suppliers, some of whom exclusively serve Poundland. He suggested that if the company fails, taxpayers would ultimately bear the cost of supporting unemployed individuals, while liquidators would profit.

Reports indicate that Smith's own bid to buy back Poundland was rejected, despite his claims of having secured sufficient funding for the business's current valuation of £30 million. He stated that Gordon Brothers did not engage meaningfully with his offer and that he now supports a bid from the Northern Irish firm Martin Property Group.

Other figures have also voiced criticism regarding the owners' handling of the situation. Sir Andy Street, former Mayor of the West Midlands, called the apparent dismantling of the retailer 'disgraceful' and questioned why a viable bid was rejected in favor of breaking up the business. He urged that the owners be questioned and that Poundland be saved to protect jobs.

Prime Minister Andy Burnham, whose constituency includes a Poundland distribution center where 270 jobs could be lost, expressed a desire to protect employment. He stated that he and the Business Secretary want to understand why a potential owner who could avert the crisis was not accepted.

Reform's Robert Jenrick characterized the situation as 'crony capitalism,' arguing that the 12,000 workers deserve better than a company collapse. He dismissed arguments that such failures are simply part of the free market in this instance.

Poundland has faced challenges in recent years, attributed in part to deviating from its original £1 price point and expanding into new product lines like clothing and frozen food, according to retail expert Jonathan De Mello. The company is also navigating increased operating costs, including higher wages and employer National Insurance contributions, while facing competition from online retailers such as Amazon and Temu.

Several other entities have reportedly expressed interest in acquiring parts or all of the business, including rival Poundstretcher, owned by US investment group Fortress, as well as Iceland, Lidl, CDS Superstores (the group behind The Range, Homebase, and Wilko), and Modella Capital. The union representing Poundland staff described the situation as 'incredibly distressing' and accused Gordon Brothers of jeopardizing livelihoods, urging them to prioritize a unified buyer.

The Daily Mail has approached Gordon Brothers and Pepco for comment.