A major Poundland supplier has said it will lose millions of pounds if the retailer goes bust.
Adam Turner, sales director at Bradford-based Highcrest Retail Brands, said Poundland was one of its biggest customers and its collapse would cost it “a few million” in lost sales.
Poundland’s owner, US-based investment firm Gordon Brothers, is facing government scrutiny after refusing a bid which would have kept the retailer in business.
Gordon Brothers has previously said Poundland faces multiple economic challenges from rising inflation, increasing staff costs, and “severe levels of shoplifting”.
Highcrest, a family owned business, mainly sells confectionery to Poundland and turns over about £50m.
Turner said the firm becoming insolvent would leave a substantial gap in its balance sheet next year.
Highcrest was a “longstanding business that can stomach this”, Turner said. But he warned other medium and small suppliers to the retailer have told him that “if Poundland goes under, so do they”.
This echoes a warning from Poundland founder Steve Smith on Monday that two or three thousand suppliers to the firm, which only work for Poundland, would be directly affected by its collapse.
Not only 12,000 Poundland staff would be affected, but also potentially tens of thousands more, he said.
Speaking to the BBC on Wednesday, Smith said up to 30,000 jobs could be lost as result.
He said he was “amazed” Poundland was being put into administration, pointing to the profitability of the company.
“Also, there’s two offers on the table from some really good people,” he added.
“All I’m asking is for Gordon Brothers to see if they can put a deal together.”
Gordon Brothers said Poundland is “still not cash generative at a sustainable level” because of the economic issues it faces.
If Poundland’s stores are sold to new buyers, some of the employees may get new jobs on the same premises.
However, it is understood that buyers are only interested in about half the stores at present – meaning roughly 6,000 employees would not be re-employed.
