Poundland's founder, Steve Smith, has said he would invest in the discount retailer if an opportunity arises. Smith, who set up the Walsall-based business in 1990, said he was "really surprised" to learn that owner Gordon Brothers had filed for administration when sales were up 11% on last year.
Smith said he had tried to contact Gordon Brothers over the past three months but received no reply. He said he was still in touch with staff and that sales were 11.2% higher than a year earlier even last week. He added: "Although Poundland made a loss last year, they're going to make a good profit this year, so it's just crazy."
The BBC understands that Business Minister Kate Dearden will meet senior Poundland executives later this week. Sky News first reported the meeting. According to government sources, the meeting will be mainly a "fact finding" session, and there is limited scope for the government to intervene in a commercial transaction.
Poundland has until Thursday to find a rescue deal, putting up to 12,000 staff at risk. Gordon Brothers, a US-based firm, bought the business from Polish retail group Pepco last year for £1. It has stopped funding the business and rejected a takeover offer from Irish firm Martin Property Group (MPG). Gordon Brothers said MPG had been identified as the preferred bidder by Poundland's management team, and that attention must now turn to other active bids. It said it is evaluating interest for the whole business and formal and indicative offers for significant viable parts of it.
Concerns have been raised that Gordon Brothers declined an offer from another buyer that could have kept Poundland afloat, in order to ensure repayment of a £30 million loan it inherited after buying the company. The BBC reports that Gordon Brothers has not said whether this is the reason.
Liam Byrne, chair of the Business, Innovation, Science and Trade Committee and Labour MP for Birmingham Hodge Hill and Solihull North, said he believed the company could be saved. He said the owner could be trying to sell a going concern to maximise its own profits. Prime Minister Andy Burnham has said the government was "ready to support" staff and called for answers about why an offer to buy the business was rejected.
The board of Poundland Limited said it had been "working on a formal sale process" but had not been able to identify an acceptable offer for the business as a whole.