Poundland has been blocked from ordering new stock ahead of the crucial Christmas trading period, despite an £86 million improvement in its financial performance over the past year.

The discount retailer has been unable to pay suppliers for new products since 27 October, after owner Gordon Brothers restricted its access to credit facilities and to cash generated through trading, according to ITV News.

The restrictions mean Poundland is continuing to sell the stock it already holds, but cannot replenish its shelves, raising fresh questions about its ability to keep trading through the festive season.

£25 million in cash out of reach

As of 3 November, Poundland reportedly had around £25 million in cash that its management was unable to access, even though the balance continued to grow through takings in its stores.

Chief executive Barry Williams revealed the sharp improvement in the retailer's trading in a message to staff last week. Poundland swung from an underlying loss of £68.1 million in the year to September 2025 to a profit of £18.1 million in the year to September 2026, an improvement of £86.2 million. The figures have yet to be audited.

Like-for-like sales rose seven per cent in the first period of the new financial year. Trading strengthened further during Halloween week, when like-for-like sales jumped 11.4 per cent year on year and came in £1.5 million above budget.

Williams acknowledged that total sales remained below last year's levels, but said that reflected the closure of 115 stores as part of the retailer's restructuring programme.

Owner says business still vulnerable

Gordon Brothers, which acquired Poundland from Pepco Group for £1 in June 2025, has maintained that the business remains financially vulnerable despite the improving figures.

In a letter to the government last week, Gordon Brothers' UK operations boss Mark Newton-Jones warned that rising inflation, higher employment costs and shoplifting continued to put pressure on the company. He said Poundland was still not generating cash at a sustainable level.

Martin Property Group and Xyra Group Holdings are among the parties to have submitted proposals to acquire Poundland as a going concern. Tesco, B&M, Iceland, Poundstretcher, The Range and Lidl have all expressed interest in acquiring parts of the store estate if a full rescue fails.

Martin Property Group has urged Gordon Brothers to release funding so Poundland can replenish stock and keep trading while rescue talks continue.

Deadline on Thursday

Poundland's management has also held talks with the government, with Williams and chief financial officer Shaun Wills meeting business minister Kate Dearden last week.

Gordon Brothers is set to face scrutiny from MPs over its handling of the retailer's difficulties, with the Business and Trade Committee due to hear evidence from company executives in private on Wednesday.

Poundland's notice of intention to appoint administrators is due to expire on Thursday 12 November, leaving just days to secure a deal that could safeguard more than 10,000 jobs. Advisory firm AlixPartners has been lined up as administrator in waiting if no solvent sale is agreed.