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Poundland to stop paying rent at hundreds of stores in rescue deal
Poundland will halt rent payments at hundreds of its shops if a restructuring of the ailing discount retailer is approved by creditors later this summer.
Sky News 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..
Amir Nisi
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