Poundland has secured extra time to avert collapse after the directors of the struggling retailer managed to hold off its creditors by another 10 days. 

The high street chain’s management has filed a second notice to appoint administrators, which it is hoped will give its owners Gordon Brothers more time to find a buyer for its 600 stores and 12,000 staff.

This comes after Gordon Brothers was slammed by MPs for “jeopardising thousands of jobs on Britain’s high streets” during a two-hour grilling in Parliament on Wednesday.

A spokesperson for Poundland’s board said: “Over the past two weeks, Poundland has been operating under the statutory protection of a Notice of Intention (NOI) to appoint Administrators.

“Amid an ongoing sale process, and with funding agreed to enable the business to continue trading during this period, the Board of Poundland has today resolved to make an application for a second NOI with a view to identifying the best available prospects for shareholders, creditors and our people.”

The discount retailer said its stores will remain open during the 10-day moratorium on its creditors, as it thanked its colleagues, suppliers and customers “for their incredible and continued support”.

Talks continue for rescue buyer

Poundland’s founder, Steve Smith, had been warning in recent days that the retailer would not be able to continue trading as he accused Gordon Brothers of withholding the company’s access to the funds needed to pay its suppliers. 

Gordon Brothers agreed to release £10m to Poundland as the first in a series of payments earlier this week, and its Europe chief, Mark Newton-Jones told MPs on Wednesday that the firm had in no way restricted the retailer’s access to funds. 

But following the hearing the committee’s chair, Liam Byrne, said there were “concerning signs [Poundland had] been strangled of access to its own funds in what should be its busiest trading period in the run up to Christmas”. 

Sources close to the hearing said that Newton-Jones appeared “exasperated at the media coverage” of the sale process and “tried to paint Gordon Brothers as the saviour of the situation”. 

Another questioned whether Gordon Brothers is committed to finding a buyer who will keep the company intact, telling it was “abundantly clear” the retailer’s owner gordon “will make vastly more money if it is broken up”.

The retailers’ future now hangs in the balance as talks continue with three bidders, NCP-owner Martin Property Group, little-known investor Xyra Group and Irish investment firm Innovest Holdings, it is understood. 

Retailers including Tesco, B&M, Lidl, Iceland, The Range and Poundstretcher are waiting in the wings to snap up Poundland’s stores and stock if it falls into administration. 

A collapse of Poundland would be the most significant to hit the retail sector in years and would strike a blow to Andy Burnham’s pledge to revive the high street.

“The truth is that too many high streets have been left to hollow out, leaving town centres a shell of what they once were,” Burnham said in September. “That must change.”

A spokesperson for Gordon Brothers said: “We support the Board’s decision to extend the legal moratorium over the company by a further ten working days. This brings additional stability amid an ongoing sale process in the backdrop of increasing cost pressures and a difficult inflationary economic environment.

“With this decision, we are today able to confirm to Poundland employees that funds will be released to allow payroll to be made in full this month, while additional funds continue to be released to support Poundland’s ongoing trading.”