Poundland has moved to reassure suppliers about its financial position after credit insurers reportedly stopped providing new cover to some businesses trading with the discount retailer.
Senior management has held discussions with suppliers in both the UK and China as owner Gordon Brothers continues its efforts to find a buyer for the business.
According to reports, a Poundland management delegation travelled to Shanghai this month to meet Chinese factory owners, while talks were also held with UK suppliers last week.
The discussions follow decisions by credit insurers to stop offering new policies to some Poundland suppliers amid uncertainty over the retailer’s ownership.
Trade credit insurance protects suppliers if a customer is unable to pay its bills. A withdrawal or restriction of cover can result in suppliers requesting shorter payment terms or payment upfront, potentially putting further pressure on a retailer’s cash flow.
The issue is not new for Poundland. Similar concerns emerged during its sale by former owner Pepco last year, when the withdrawal of trade credit insurance reportedly led some suppliers to seek shorter payment terms.
The latest development comes as Gordon Brothers pursues another sale of the discount chain, little more than a year after acquiring Poundland from Pepco for £1.
Alvarez & Marsal has been appointed to oversee the process, with Gordon Brothers reportedly seeking around £30 million for the business.
Several potential buyers are understood to have submitted offers, while Poundland’s existing management team has also reportedly lodged a bid. Modella Capital has also been linked with the sale process.
Turnaround continues
Poundland currently operates around 600 stores and employs approximately 11,000 people following a major restructuring programme which resulted in around 150 store closures.
Despite the uncertainty over its future ownership, the retailer recently said its turnaround was gathering momentum.
Poundland expects adjusted like-for-like sales to have increased 6.4 per cent during its fourth quarter to 27 September, while unadjusted like-for-like sales are expected to be up 3.3 per cent, helped by stronger demand within grocery.
Profitability is also said to be on a “strongly improving trajectory”, with pre-tax earnings expected to be approximately £80 million better than the previous year.
Poundland Finance Chief Shaun Wills said: “The fundamentals of this business are strong.”
As part of its turnaround, the retailer has been working to reinforce its value credentials by simplifying prices and returning more products to its traditional £1 price point. Around half of its grocery range is now priced at £1.
However, its latest filed accounts demonstrate the scale of the challenge. Poundland recorded a pre-tax loss of £85.2 million for the year to 28 September 2025, although it ended the period with more than £30 million in cash and access to additional borrowing facilities.
Gordon Brothers acquired Poundland in June 2025 before completing a court-approved restructuring later that summer, allowing the business to close loss-making stores and reduce costs.
The latest concerns among suppliers add another challenge for Poundland as the search for a new owner continues ahead of the key Christmas trading period.
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