Poundland skirts administration as restructuring plan gets court approval

Poundland has received court-backing for its restructuring plan, allowing it to bypass administration. A representative told the High Court earlier today that the budget retailer would run out of money by September 7, 2025, if the plan was not approved.

Speaking to the court for Poundland Limited, Tom Smith KC said the retailer’s financial position had “significantly deteriorated during the last two years” and that it had “performed poorly in a difficult retail and economic environment”.

According to Smith, if the plan was approved a further 60 million pounds of funding, in addition to the 30 million pounds already invested by Poundland’s new owner Gordon Brothers, would be released to the company.

As part of the restructuring, Poundland had previously announced plans to close 68 of its 800 stores across the UK. The company now has the green light to move forward with such closures, impacting 1,000 staff, and push for rent reductions on other locations.

Over 68 stores expected to close as part of plan

In a statement to the press, Poundland’s managing director, Barry Williams, said the decision today, initially reported on by the BBC, was vitally important for the company and would allow it to "stabilise the business, securing the future for hundreds of stores and thousands of jobs”.

Williams acknowledged the impact the ruling would have on the company’s employees, “especially those leaving us as we streamline our store estate, distribution network and support teams”, he noted. “Nevertheless, our wider attention must now turn to getting Poundland back to growth,” Williams added.

Poundland had released further details regarding a business-wide refocus earlier this year, stating that it intended to close its frozen and digital distribution site in South Yorkshire, and another warehouse in the West Midlands by early 2026.

Elsewhere, the retailer is looking to return its “successful clothing business” in-house, where it intends to explore womenswear and seasonal merchandise in greater detail.

Poundland’s former owner Pepco lowered the retailer’s full-year profit guidance in May after reporting a pre-tax loss of 35.7 million pounds in the last financial year, citing “highly challenging trading conditions”.

The company had been due to pay back 276.5 million pounds in loans by September 1, however, the deadline will be pushed back by three years under the restructuring plan.