Under-fire Poundland owner Gordon Brothers defends stewardship

Poundland's controlling shareholder has told the government it stands by its stewardship record even as it faces mounting pressure over the crisis which has left the discount retailer on the brink of administration.

Sky News has obtained extracts from a letter sent by Mark Newton-Jones, who runs Gordon Brothers' European operations, to a senior advisor at the Department for Business, Innovation, Science and Technology (DBIST) which claims that the firm had "supported Poundland with £85m of additional financing" since acquiring the business in the summer of 2025.

Gordon Brothers is facing intense pressure from the prime minister, business secretary and leading Reform figures over its decision to turn down a solvent bid from Martin Property Group, a Northern Irish-based business.

Last week, Poundland's directors were forced to file a notice of intention to appoint administrators, giving the retailer 10 working days of breathing space from its creditors but leaving it on the verge of collapse.

The chain's insolvency would threaten up to 10,500 jobs at Poundland, as well as many more in the company's supply chain.

Questions are now being asked of Gordon Brothers' approach because its rejection of Martin Property Group's offer appears to relate to the bidder not offering to repay a £30m shareholder loan in full on completion of the transaction.

Pepco Group, Poundland's former sole owner and now a minority shareholder, has offered to defer its right to repayment of a £7.5m chunk of that loan.

In his letter to David Bickerton, the chief business advisor at DBIST, Mr Newton-Jones said it had put "significant working capital at risk to narrow a £70m loss and return to a baseline EBITDA [earnings] positive position earlier this year".

"However, like other high street retailers, the company faces multiple economic challenges, including rising inflation, increasing staffing costs and shrinkage from severe levels of shoplifting, which means it is still not cash-generative at a sustainable level despite the turnaround efforts."

The letter is also understood to claim that the inflationary outlook for low-margin retailers has left it facing further losses, although it was unclear whether it sought to address concerns that Gordon Brothers was attempting to force Poundland into administration to give it a better chance of recouping its £30m loan.

Mr Newton-Jones told the government that a break-up of the business - with interest from retailers including B&M, Lidl and Tesco - now appeared to provide the best chance of salvaging jobs at Poundland.

This was despite Sky News' revelation late last week that Martin Property Group remains keen to pursue a solvent deal.

"It was apparent that, taken together, the approaches from some of Britain's most well-regarded employers could see the transition of multiple hundreds of stores and continued employment for many thousands of staff," an excerpt of Mr Newton-Jones's letter said.

"In light of this, Gordon Brothers took the view that attention must be paid to properly and thoroughly evaluat[ing] all options.

"Additional offers continue to be received and active discussions continue on proposals that would, together, already cover a significant number of Poundland's 10,500+ employees across its UK and Ireland stores."

Alvarez & Marsal is continuing to advise Gordon Brothers on the sale process, while AlixPartners is on standby to act as administrator.

Sky News reported on Monday that Kate Dearden, minister for the future of work, is to meet Barry Williams and Shaun Wills, Poundland's managing director and finance chief respectively, this week.

Jonathan Reynolds, the business secretary, has warned his department is closely monitoring the situation.

Any appointment of administrators would trigger a mandatory investigation by the Insolvency Service.

Gordon Brothers has been contacted for comment.

(c) Sky News 2026: Under-fire Poundland owner Gordon Brothers defends stewardship