Poundland to switch to zero rents at hundreds of stores if court approves restructuring – report

The restructuring plan at value chain Poundland will see hundreds of its shops switching to paying no rent at all – if the plan is approved by the High Court.

That’s according to sky News, which said that new owner Gordon Brothers will halt rent payments at hundreds of shops assuming court approval later this summer.

Those shops are the so-called Category C locations across the country with Sky saying that it has seen a letter sent to creditors showing that around 250 shops have been given this designation. The company also wants the right to terminate its leases with 30 days notice at around 70 of the loss-making stores that it classes as C2, and with 60 days notice at another 180 sites.

But landlords could also activate break clauses in their contracts at an early stage if they’re able to find alternative retail tenants.

Poundland is also targeting rent reductions of between 15% and 75% at hundreds of other stores if the plan is approved. There’s no guidance so far on how many of the company shops will ultimately close.

The news organisation cited one source saying that a convening hearing has been scheduled for July and a sanction hearing, at which creditors will vote on the plan, for late August.

Poundland and Gordon Brothers haven’t commented on the story.