Poundland has reportedly been blocked from ordering new stock ahead of the crucial Christmas trading period, despite an £86m improvement in its financial performance over the past year.
The embattled company has been unable to pay suppliers for new products since 27 October after owner Gordon Brothers restricted its access to credit facilities and cash generated through trading, according to ITV News.
The restrictions mean Poundland is continuing to sell its existing inventory, but cannot replenish its shelves, raising fresh concerns over its ability to continue trading.
As of 3 November, Poundland reportedly had around £25m in cash that management was unable to access, despite the balance continuing to grow through store sales.
Poundland boss Barry Williams revealed a dramatic improvement in the retailer’s financial performance in a message to staff on Friday.
According to the internal memo, seen by ITV News, Poundland swung from an EBITDA loss of £68.1m in the financial year to September 2025 to a profit of £18.1m in the year to September 2026.
The £86.2m turnaround comes as like-for-like sales continue to improve, with sales rising seven per cent in the first period of the new financial year.
Trading strengthened further during Halloween week, when like-for-like sales jumped 11.4 per cent year on year and exceeded budget by £1.5m.
Williams acknowledged that total sales remained below last year’s levels but attributed the decline to the closure of 115 stores as part of the retailer’s restructuring programme.
The figures have yet to be audited.
However, Gordon Brothers, which acquired Poundland from Pepco Group for £1 in June 2025, has maintained that the business remains financially vulnerable despite its improving performance.
In a letter to the government last week, Gordon Brothers’ UK operations boss Mark Newton-Jones warned that rising inflation, higher employment costs and shoplifting continued to put pressure on the company.
He said Poundland was still not generating cash at a sustainable level, despite its turnaround efforts.
Martin Property Group and Xyra Group Holdings are among the parties to have submitted proposals to acquire Poundland as a going concern.
Meanwhile, Tesco, B&M, Iceland, Poundstretcher, The Range and Lidl have all expressed interest in acquiring parts of the retailer’s store estate.
Martin Property Group has reportedly urged Gordon Brothers to release funding to allow Poundland to replenish stock and keep trading while rescue negotiations continue.
Poundland’s management has also held talks with the government, with Williams and chief financial officer Shaun Wills meeting business minister Kate Dearden last week.
Gordon Brothers is set to face scrutiny from MPs over its handling of the retailer’s financial difficulties, with the Business and Trade Committee due to hear evidence from company executives in private on Wednesday.
Poundland’s notice of intention to appoint administrators is due to expire on Thursday 12 November, leaving just days to secure a deal that could safeguard more than 10,000 jobs.
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