The little-known investment firm emerging as a “frontrunner” to buy Poundland has called on Steve Smith, the retailer’s founder, to bolster its bid for the struggling firm. 

Xyra Group Holdings, founded by 23-year-old Manvedeep Singh, has asked Smith to lend support to their £12.5m bid to keep Poundland afloat as the discount retailer veers towards collapse, has learned. 

Smith has had conversations with Xyra Group in recent days but does not plan to take part in any takeover efforts until a deal has been completed, it is understood. 

The Poundland founder, who set up the retailer with his father, Kevin Smith, in 1990, had been weighing investing in the company himself or backing a rival offer tabled by Martin Property Group but has ruled out both options.

Gordon Brothers, the US investment firm which owns Poundland, is racing to find a solvent buyer for the retailer before a moratorium blocking creditors from calling in their debt lapses on Thursday. 

The firm’s filing of a notice to appoint administrators had sparked fears Poundland was edging towards collapse but it is now holding talks with multiple bidders over a sale of the company as a going concern.

Gordon Brothers’ earlier attempts to find a solvent buyer for Poundland had been derailed over its demand to be paid £22.5m for a loan it inherited from PepCo, the retailer’s previous owner, when it bought the firm for £1 last year. 

PepCo owns £7.5m of this loan, which is worth £30m in total, but has offered to defer its repayment. 

Jobs at risk from collapse

Xyra Group is offering to pay Gordon Brothers £12.5m up front, leaving a £10m shortfall on the investment firm’s share of this loan. Martin Property Group has offered to pay £5m initially, leaving a shortfall of £17.5m, it is understood. 

This makes Xyra Group the “frontrunner” to acquire Poundland, sources told . While there had been questions over the source of the investment firm’s funding, it has made “significant progress” in providing proof of “credible backing,” they said. 

Xyra Group has not completed a single acquisition since it was founded in November 2024 and little is known about its senior leadership. Viktor Bronzovic, who serves as its chief executive, is a 27-year-old tech entrepreneur and former DJ.

Gordon Brothers has faced significant political pressure in recent weeks, prompted by fears that the retailer’s collapse would put its 12,000 staff and 600 stores at risk. 

On Wednesday, the US investment firm will appear in front of parliament’s business select committee, where it will be grilled on its efforts to find a credible buyer for Poundland.

Xyra Group was contacted for comment. Gordon Brothers declined to comment.