Up to 3,000 Irish jobs under threat as Dealz owner seeks UK court protection

Up to 3,000 jobs across Ireland could be at risk after the owner of the Dealz discount store chain filed notification in the UK of its intention to appoint an administrator to the company.

The move provides protection from creditors for the business which operates about 600 stores in the UK under the Poundland brand.

Dealz, which operates more than 70 stores in Ireland, is a wholly owned subsidiary of Poundland and its position is unclear in the light of its parent’s latest troubles. A spokesman for the Department of Enterprise, Tourism and Employment said it had not received any notification of potential redundancies as of Thursday afternoon.

Efforts to contact the London offices of the company proved unsuccessful on Thursday but reporting in the Guardian suggested the Irish chain was likely to be impacted by the move.

In addition to its stores, which are spread across the State, the company operates a big distribution centre in Clonee, Co Meath.

Poundland was founded in Burton upon Trent in 1990 operating a single price model. It opened its first two stores in Ireland in August 2011.

The business was badly hit by increased costs and supply chain difficulties during Covid and, after a previous financial crisis last year, the company was bought for £1 from European retail group Pepco by Gordon Brothers.

One bidder at that time, Martin Property Group, a Northern Irish family-owned company, is reported to have been interested in buying the entire chain and working with the existing management, led by Barry Williams, the chief executive.

Gordon Brothers, however, is understood to believe it can raise more from a break-up of Poundland than through the Martin offer, which was worth less than the £30 million in debt that Gordon Brothers took on when it bought the chain.

In Britain, the shop workers’ union Usdaw urged Poundland’s owners to reconsider a decision to prepare the budget chain for administration, with the move putting up to 12,000 jobs there at risk.

Bally Auluk, national officer of the Union of Shop, Distributive and Allied Workers, said: “It has been an incredibly distressing week for Poundland staff who have had to watch from the sidelines.

“We are urging Gordon Brothers to reconsider and to prioritise a unified buyer who will protect the livelihoods of [more than] 11,000 people.”

Williams wrote to workers this week saying the rejection of the bid from Martin Property Group was “unexpected, unwanted and wholly avoidable”.

He said notice of the intention to appoint administrators had been filed “in order to bring stability” as “despite enormous efforts, it has not been possible to identify an acceptable offer for the business as a whole”.

Poundland would be “working closely with our advisers to identify and deliver the best possible outcome”, he said.

Williams said the latest sale process for Poundland had attracted offers from several established retailers “which collectively cover a significant part of the business” and that “offer the best available prospects for shareholders, creditors and to preserve jobs”.

A number of parties have expressed interest in buying parts of the chain while rival retailers including Aldi and Lidl are reported to be interested in taking over some of the UK Poundland locations.

It was not clear late on Thursday whether any prospective buyers viewed the Irish chain as part of its plans or whether the stores here might attract separate interest. – Additional reporting, Guardian service.