Look at the Poundland scandal and see a crisis that goes beyond Britain’s high streets | Polly Toynbee
Poundland, owned by US firm Gordon Brothers, faces collapse with 600 stores at risk after £50m was withheld for stock and wages, putting 12,000 jobs in jeopardy.
In one of Poundland's stores, shelves are emptying as the US owner withholds £50m needed for new stock and paying wages. The 600 stores employ 12,000 people directly, with 30,000 more jobs at risk in supply chains. On Tuesday, £10m was released to prevent immediate collapse, but it's not enough to save the business.
Gordon Brothers, which bought Poundland for a symbolic £1 last year, specializes in buying and "restructuring" distressed companies. Under pressure, it extended the deadline by 10 working days before potentially putting this profitable business into administration, where it would profit more by closing it down and breaking it up.
Manager's struggle
The store manager, who requested anonymity as Jim, is working an hour and a half after his paid shift ended to support his team. "I look out for my team," he says, though Gordon Brothers doesn't seem to be reciprocating. Outsourced security staff have vanished this week as their pay was stopped, leading to increased shoplifting.
The shoplifting is very bad now. Look, the high-end stuff has gone first: the well-known brands, not unknown cheaper makes.
Despite the uncertainty, Jim remains proud of his store and notes how much cheaper brands are than in supermarkets like Sainsbury's. He's particularly concerned for a long-serving employee with limited English skills. "He's been here 15 years, and never a single day off sick, not one. Will any other shop see how good he is? No, because his English is bad and they won't know his worth to any manager." Jim is trying to help by giving him more time at the till to improve his language skills.
Broader crisis
Jim belongs to Usdaw, the shopworkers' union, but feels powerless against the private equity buyout. "Time and again the union has watched helplessly as these private equity and venture capital buyouts bring down viable retailers," he explains. The crisis reflects a pattern seen across British high streets, with Woolworths' 807 stores closing after being taken over, losing 27,000 jobs, and other retailers like BHS, Debenhams, and WH adversely transformed by similar "restructuring".
Poundland stores serve as "anchor stores" drawing people to high streets, but may join the growing number of boarded-up shops just weeks before Christmas. Jim could increase sales if given more control over buying decisions. I know our customers in this area; the center doesn't. As customers express shock at the potential closure, the fate of these stores and thousands of jobs remains uncertain, with Gordon Brothers deciding whether to save or dismantle the business.
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