Retail chain Poundland to no longer pay rent at numerous outlets as part of a salvage agreement
Fresh Take:
Prepare for a shakeup at Poundland, as their new owners, investment firm Gordon Brothers, mull over a plan to halt rent payments at over 250 shops across the nation. Known as Category C sites, these stores will see no more rent bills if the restructuring plan gets the nod from creditors this summer.
In a move aimed at strengthening the troubled discount retailer, roughly 70 loss-making stores, classified as C2, will be terminated with a 30-day notice, while about 180 more C2 sites will receive a 60-day notice. Meanwhile, hundreds of Poundland's stores will witness rent reductions between 15% and 75%.
The plan leaves the question of how many locations will eventually shutter under the new owners unanswered. Creditors are expected to convene next month, followed by a vote on the plan around August 26.
While Poundland's response to these developments remains silence, Gordon Brothers has announced an investment of £80 million to support the business turnaround.
This restructuring move comes after Poundland was sold for a nominal amount to Gordon Brothers last week, as its parent company, Pepco Group, struggled with mounting losses.
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Insight:
- The restructuring plan includes zero-rent proposals for about 250 stores classified as Category C sites.
- The plan suggests store closures if alternative tenants can be found.
- Gordon Brothers aims to invest £80 million to support Poundland's turnaround efforts.
- Creditors will convene in the coming month, with a vote on the plan scheduled for August 26.
Original Article:
Poundland will halt rent payments at 250 shops if a restructuring of the ailing discount retailer is approved by creditors later this summer.
our website has learnt that Poundland's new owner, the investment firm Gordon Brothers, is proposing to halt all rent payments at so-called Category C shops across the country.
According to a letter sent to creditors in the last few days, roughly 250 shops have been classed as Category C sites, with rent payments "reduced to nil".
Poundland will have the right to terminate leases with 30 days' notice at roughly 70 of these loss-making stores - classed as C2 - after the restructuring plan is approved, and with 60 days' notice at about 180 more C2 sites.
The plan also raises the prospect of landlords activating break clauses in their contracts at the earliest possible opportunity if they can secure alternative retail tenants.
In addition to the zero-rent proposal, hundreds of Poundland's stores would see rent payments reduced by between 15% and 75% if the restructuring plan is approved.
The document leaves open the question of how many shops will ultimately close under its new owners.
A convening hearing has been scheduled for next month, while a sanction hearing, at which creditors will vote on the plan, is due to occur on or around 26 August, according to one source.
The discounter was sold last week for a nominal sum to Gordon Brothers, the former owner of Laura Ashley, amid mounting losses suffered by its Warsaw-listed owner, Pepco Group.
Poundland declined to comment.
- The investment firm Gordon Brothers intends to halt rent payments for about 250 Category C shops within Poundland as part of their restructuring plan, which could lead to potential store closures if alternative tenants can be found.
- The proposed restructuring plan by Gordon Brothers also includes reduced rent payments for hundreds of Poundland stores, which could significantly impact the retail and finance industries.
