Poundland supplier 'will lose millions' if retailer collapses

By Tom Espiner , Business reporter , Emma Simpson , Business correspondent and Oliver Smith , Business reporter Published 6 minutes ago One of Poundland's suppliers has said it will lose millions if the firm collapses.

While that supplier will stay afloat, it is feared that some small and medium-sized suppliers could go under.

This is in addition to potentially thousands of job losses among staff.

Politicians have been putting questions to representatives of Poundland owners Gordon Brothers this week seeking "clarity" on plans for the retailer.

Adam Turner, sales director at Highcrest Retail Brands - a family owned Bradford business - told the BBC that Poundland was one of Highcrest's biggest customers, and that the firms have had a relationship for decades.

Highcrest mainly sells confectionary to Poundland, and turns over about £50m.

It will "lose a few million" if Poundland becomes insolvent, so it will have a gap in its balance sheet next year, he said.

Highcrest was a "longstanding business that can stomach this", but other medium and small suppliers have told him that "if Poundland goes under, so do they", Mr Turner said.

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.

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.

Mr Turner said that the last three months of the year is the "golden quarter" for retailers. In terms of sweets, Poundland will get its Halloween stock in from July, and Christmas stock in from September.

These three months will be the time of year when suppliers will be owed the most by Poundland.

If Poundland goes under, suppliers will be getting "pennies in the pound" back from the administration, he said, which is "very upsetting" - although he still hopes a deal can be done so Poundland can remain solvent.

Poundland owners Gordon Brothers will be a secured creditor, which means they are first in line to get their money back, and suppliers "who have done nothing wrong" will take the financial hit.