Poundland is unable to buy new stock to fill its shelves after being blocked by its owners from accessing cash in its bank accounts.
The discount chain is on the brink of collapse with one insider describing it as “running on fumes”. It has until Thursday to secure a rescue deal
About £50m has been frozen by its American owner Gordon Brothers, the BBC understands, meaning its 600 shops are running out of stock.
Pressure is building on Gordon Brothers, which bought Poundland for £1 last June, after the owner rejected a takeover bid that could have saved the thousands of jobs currently at risk. Gordon Brothers has been approached for comment.
Poundland has filed a notice of intention to appoint administrators, which protects it from its creditors until Thursday.
Access to funds was limited because of a tension between Gordon Brothers’ dual role as both creditor and shareholder, a source said, but added they expected a relaxation of funds in the next two days.
Last week, Poundland boss Barry Williams told staff like-for-like sales, which exclude new store openings, were up 11.4% last week, which included Halloween, but said this was £1.5m ahead of budget.
He said the business made a profit of £18.1m in the year to September, which was a “strong recovery” from the previous year where the business made losses of £68m.
The latest annual accounts have yet to be audited.
