A little-known investment firm now thought to be the frontrunner to buy Poundland has sought support from the discount chain’s founder.
Xyra Group Holdings has asked the retailer’s founder Steve Smith to back its bid, City AM reported.
London-based Xyra, founded by 23-year-old Manvedeep Singh, entered the fray last week.
Poundland could enter administration within days after owner Gordon Brothers rejected a rescue bid from its management team, backed by Ireland-based Martin Property Group, which would have saved its nearly 12,000 staff and potentially also a wider supplier base of 18,000 people.
The sticking point was demand for full repayment of a £30 million shareholder loan with any buyer of the business.
Enter Xyra Group, which has reportedly offered to pay off £12.5m of this debt, with the rest deferred.
While the validity of the buyer is yet to be established – such as whether it has the funds – it has appointed a credible figure to its board.
Andrew Brode is a non-executive director at RWS, an enterprise software company founded in 1958 which has repositioned itself recently as a provider of AI solutions.
US-based investment group Gordon Brothers said Poundland, which it bought for just £1 last summer from Pepco Group, has faced years of instability and “remains challenged and vulnerable”.
Poundland has filed a notice to appoint administrators, but the moratorium on creditors calling in debts is set to expire on Thursday.
City AM said Smith has had conversations with Xyra Group but will only get involved once a deal has been completed.
Smith, who set up Poundland with his father Kevin in 1990, has considered investing in the company himself or backing Martin Property Group’s solvent bid but decided against both options, City AM added.
Meanwhile Tesco is considering a bid to buy up to 150 of its 600 UK and Ireland stores.
Poundstretcher owner Fortress is also said to be interested in acquiring 250 shops, while other interested parties include Iceland, Lidl, CDS Superstores – owner of Wilko and The Range – and B&M.
On Wednesday Gordon Brothers will appear in front of the UK Parliament’s Business Select Committee to answer questions on its efforts to find a solvent buyer.
The Poundland crisis could trigger a domino effect across the high street, according to an expert we spoke with last week.
