Poundland has moved to reassure suppliers over its financial position after credit insurers stopped providing new cover to some companies trading with the chain.
Senior management has held talks with suppliers in the UK and China in an effort to maintain confidence as owner Gordon Brothers pursues a sale of the retailer, according to The Telegraph.
A management delegation is understood to have travelled to Shanghai this month to meet Chinese factory owners, while similar discussions with UK suppliers took place last week.
The talks follow moves by credit insurers to stop offering new policies to some Poundland suppliers amid uncertainty surrounding the retailer’s ownership.
Trade credit insurance protects suppliers against losses if a customer fails to pay its bills. Removing or restricting that cover can lead suppliers to shorten payment terms or demand payment upfront, putting additional pressure on a retailer’s cash flow.
The issue previously emerged during Poundland’s sale by former owner Pepco last year, when the withdrawal of trade credit insurance prompted some suppliers to seek shorter payment terms, according to documents relating to its subsequent restructuring.
The latest concerns come after Gordon Brothers appointed Alvarez & Marsal to oversee a fresh sale process for Poundland, little over a year after acquiring the business from Pepco for £1.
Gordon Brothers is understood to be seeking around £30m for the chain, with several potential buyers having submitted offers last week.
Poundland’s existing management team is also reported to have lodged a bid for the business, while Modella Capital has been linked with the process.
It currently operates around 600 stores and employs approximately 11,000 staff following a major restructuring that saw roughly 150 shops close.
Despite the uncertainty surrounding the sale, Poundland last week insisted its turnaround was gathering pace.
The discounter expects adjusted like-for-like sales to have risen 6.4 per cent in its fourth quarter to 27 September, with unadjusted like-for-likes up 3.3 per cent , following stronger demand across its grocery business.
It said profitability was also on a “strongly improving trajectory”, with pre-tax earnings expected to be around £80m better than the previous year.
Poundland finance chief Shaun Wills said: “The fundamentals of this business are strong.”
The retailer has been attempting to restore its value credentials by simplifying prices and putting more products back at its traditional £1 price point, with around half of its grocery range now priced at £1.
However, its most recently filed accounts underline the scale of the turnaround required.
Poundland recorded an £85.2m pre-tax loss for the year to 28 September 2025, although the business had more than £30m of cash on its balance sheet and access to additional borrowing facilities. Its accounts were filed at Companies House in August.
Gordon Brothers took control of Poundland in June 2025 before completing a court-approved restructuring later that summer, which allowed the retailer to shed loss-making stores and reduce its cost base.
The latest supplier concerns add another complication to Gordon Brothers’ efforts to secure a new owner ahead of the crucial Christmas trading period.
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