Poundland restructure plan

Earlier this summer, Sir Alastair Norris sanctioned Poundland’s restructuring plan, which has prevented this well-known retailer from entering administration. 

Poundland operated in excess of 800 stores, and its diversification into the frozen and chilled foods and e-commerce had not been a success. This, coupled with other strains on the business, meant EBITDA for the year end 2025 was projected to be a negative of £117million. A sales process had failed in 2024.  

Part of the problem facing Poundland was that a significant proportion of its stores were overrented. The plan sought to compromise rent arrears, impose rent reductions and new terms (including appropriate break terms) with landlords grouped into several classes. Eight out of nine classes of landlord did not vote in favour of the plan, but other financial creditors largely did vote in favour. No dissenting creditor appeared at the hearing to argue there was some other fairer and achievable plan.

This plan provided for creditors to receive 170% of their estimated return, and for those receiving less than 100% of their claim, a profit-sharing mechanism was put in place. The court accepted, on the basis of expert evidence, that administration was the likely alternative and an accelerated sale in administration was unlikely, meaning administration would lead to an orderly realisation of assets and a period of trading, resulting in a situation where landlords would be faced with a potential surrender or forfeiture.

In approving the plan Sir Alastair Norris commented on:

• The lack of any adversarial argument from the dissenting classes – he said that spoke volumes, meaning a judge could do no more than take a “high level” view of the plan.
• The extensive and genuine engagement steps carried out.
• Allocation of benefit being fair.
• The value of votes cast in favour of the plan was £358.4m compared to £42.9m against.

In regards to the matter of Poundland Limited [2025] EWHC 2755.