Poundland founder Steve Smith has warned that thousands of employees could struggle to find work for years if the chain collapses.
Smith, who founded the retailer in 1990, said the potential loss of 12,000 jobs would have devastating consequences for workers and their families, particularly in towns already struggling with high street closures.
He told The Guardian that retail jobs were increasingly difficult to come by and warned that some employees could face years without work.
Smith also raised concerns about the wider impact on Poundland’s more than 2,000 suppliers and neighbouring high street businesses, estimating that as many as 30,000 jobs could be affected if the chain disappears.
The founder, who sold his remaining stake in Poundland for £250m in 2006, urged owner Gordon Brothers to reconsider its decision to reject a takeover proposal from Northern Ireland-based Martin Property Group.
Smith has also offered to invest his own money to help rescue the retailer, having previously attempted to contact Gordon Brothers about buying back the business.
He questioned why the chain was facing administration despite signs of improving trading, claiming sales were more than 11 per cent ahead of last year.
Poundland filed a notice of intention to appoint administrators last Thursday, giving it temporary protection from creditors while attempts to secure a rescue continue.
The company has until 12 November to find a solution, although suppliers have reportedly begun withholding deliveries, putting further pressure on its trading operations.
The proposed rescue deal from Martin Property Group is understood to include £7.5m upfront and another £7.5m over two years, alongside taking on an asset-backed loan worth approximately £90m.
However, the offer would only cover half of a £30m shareholder loan, with Gordon Brothers understood to believe that breaking up Poundland and selling its stores separately could generate a better return.
Several retailers, including B&M, Poundstretcher and Lidl, have been linked with potential bids for parts of the chain’s roughly 600-store estate.
The escalating dispute has also attracted government attention, with business minister Kate Dearden due to meet Poundland’s senior management on Wednesday to discuss its future.
Poundland staff have already staged protests outside the retailer’s Walsall headquarters, accusing its owners of putting thousands of livelihoods at risk.
The chain’s management has also criticised the decision to pursue administration, arguing that its recovery was making progress and that the business could continue trading under new ownership.
Smith warned that the consequences would extend beyond Poundland’s employees, with the potential loss of a major high street retailer threatening footfall for surrounding businesses.
The founder claimed Poundland attracts between four million and five million shoppers to town centres and shopping centres each week, making its survival important to other retailers.
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