High street discounter Poundland has filed to appoint administrators, threatening the future of around 12,000 workers.
Court filings show that the retailer has filed a notice of intention to appoint administrators on Thursday afternoon, which will give the business 10 working days of breathing space from creditors to secure a potential rescue deal.
It is understood advisers are still in talks with parties interested in buying the brand and swathes of stores.
The move means around 12,000 jobs are at risk. Poundland currently runs around 600 stores across the UK.
Poundland managing director Barry Williams told staff in a memo that the situation is “unexpected, unwanted and wholly avoidable”.
A statement from Board of Poundland Limited reads: “Over the past two months, initially prompted by interest from several parties, we have been working on a formal sale process for Poundland.
“Despite enormous efforts it has not been possible to identify an acceptable offer for the business as a whole.
“The process has however attracted several established retail operators who have made formal offers, collectively these cover a significant part of the business, and we believe offer the best available prospects for shareholders, creditors and to preserve jobs.
“We recognise any sale process creates uncertainty and particularly when set against a challenging UK economic environment. We thank all stakeholders, and in particular our people for their support during this period.
“In order to bring stability, we have today filed a Notice Of Intention (NOI) to appoint representatives of AlixPartners as Administrators to the business.
“The filing of the NOI creates an immediate ten working day legal moratorium during which we will be working closely with our advisors to identify and deliver the best possible outcome.
“Our stores remain open as normal, and we thank our staff, suppliers and customers for their continued support.”
The discount chain is due to enter insolvency after owner Gordon Brothers rejected a takeover offer from Irish real estate firm Martin Property Group, which management named as their preferred bidder earlier this month.
Gordon Brothers – which only bought Poundland last year for £1 – launched a sale process for the retailer at the start of September.
Wilko and The Range owner CDS Superstores, Poundstretcher owner Fortress and TG Jones owner Modella are all understood to be interested in buying parts of the Poundland business.
It is understood the retailer has appointed advisers at AlixPartners to oversee the insolvency process and assess offers to buy all or parts of the business.
Gordon Brothers had overseen a major turnaround programme at Poundland that included closing more than 100 shops over the past year in an effort to shore up its finances.
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