Poundland unable to buy stock as fears of collapse grow

Poundland is reportedly unable to purchase new stock because its American owner, Gordon Brothers, has frozen about £50 million in funds, according to the BBC. This has left the discount chain's 600 shops running low on inventory as it approaches a critical deadline to secure a rescue deal by Thursday.

The company has filed a notice of intention to appoint administrators, which temporarily protects it from creditors. An insider described Poundland as "running on fumes," highlighting the urgency of the situation. The tension arises from Gordon Brothers' dual role as both creditor and shareholder, which has limited access to funds.

Despite these challenges, Poundland's boss recently reported an 11.4% increase in like-for-like sales last week, including the Halloween period, and a profit of £18.1 million for the year ending in September. This marks a significant recovery from the previous year's losses of £68 million.

Gordon Brothers rejected a takeover bid that might have saved thousands of jobs, increasing pressure on the owner to resolve the situation. The company expects some relaxation of funds within the next two days, which could provide temporary relief.