Poundland’s owner faces urgent government talks after rejecting a takeover bid that could have saved 12,000 jobs, as suppliers warn that the retailer’s collapse could bring down other businesses.

Business Secretary Jonathan Reynolds will meet US-based Gordon Brothers on Wednesday, a day earlier than planned. Poundland has filed notice of its intention to appoint administrators, protecting it from lenders until next Thursday; it has not yet entered administration.

Gordon Brothers bought the Walsall-based chain for £1 last June. It says Poundland is “still not cash generative at a sustainable level”, citing inflation, rising staff costs and “severe levels of shoplifting”. Its European head reportedly told the government it stood by its stewardship and had provided £85m in additional financing since the 2025 purchase.

Business committee chair Liam Byrne has asked the owners to appear before Parliament. He described Poundland as viable and profitable, and questioned why they had not accepted what he called a fully funded rescue deal. Founder Steve Smith also pointed to profitability and said two offers were available.

Those positions leave a consequential distinction unresolved: claims of profitability do not, by themselves, establish that the business generates enough cash to continue sustainably.

Reynolds and Prime Minister Andy Burnham have questioned why no deal has been reached. Business Minister Kate Dearden and union representatives are also due to meet managing director Barry Williams later today. Dearden said ministers wanted clarity without interfering in commercial negotiations, and would help employees if the chain collapsed.

A sale of stores would not necessarily preserve all jobs. Buyers are understood to be interested in only about half the shops, potentially leaving roughly 6,000 employees without re-employment on the premises.

The exposure extends beyond Poundland. Adam Turner, sales director at Bradford-based Highcrest Retail Brands, said losing one of its biggest customers would cost the family-owned confectionery supplier “a few million” in sales. The £50m-turnover business could withstand that, he said, but smaller suppliers had warned: “if Poundland goes under, so do they”.

Smith estimated that 2,000 to 3,000 suppliers working exclusively for Poundland would be directly affected, with potentially 30,000 people affected overall, including its staff.

Turner warned suppliers could recover only “pennies in the pound”, while Gordon Brothers would have priority as a secured creditor. The owner also earns money through stock liquidations. An insider familiar with the situation described the pre-Christmas timing as “odd”, but Turner said he had no knowledge of deliberate timing to exploit high stock levels. That suspicion does not establish motive; the immediate decision remains whether a rescue can be agreed before creditor protection expires.