Poundland has confirmed to the BBC that it has found a partner to back a management buyout, to rescue the long-struggling variety store chain.

A spokesperson for the organisation acknowledged that Poundland’s management is working with Martin Property Group (MPG), which holds more than £1 billion in property and development assets across the UK and Ireland, on a buyout bid.

This follows reports that Andy Bond, who ran Poundland from 2016 to 2022, is leading the buyout alongside Poundland’s current managing director Barry Williams.

Poundland’s owner Gordon Brothers is working with Alvarez & Marsal to oversee the sale, with Sky News having separately reported that Fortress Investment Group had originally submitted a takeover bid for Poundland but has now withdrawn it.

Citing insiders, Sky News said the New York-based investment firm, which owns Poundland's chief rival Poundstretcher, is now aiming to acquire just 200 and 250 of Poundland’s 600 stores.

Reports that Gordon Brothers was preparing a sale of Poundland first emerged in August, just over a year after the firm acquired the discount retailer from Pepco for the nominal fee of £1.

It is unclear if a sale would pass all of Poundland’s UK 600 stores into the hands of the new owner.

Molly Monks, insolvency expert at Parker Walsh, said that a potential buyer could see taking on Poundland’s whole estate as too high risk.

“A store can be busy but still struggle to make money once rent, wages, energy, logistics and other operating costs are taken into account,” Monks said.

“A buyer will want to understand which locations can support a sustainable business. The question is not simply how many shops it can acquire, but whether those shops can generate enough income to justify the costs and investment involved.”

Monks added that a deal could go through for part of Poundland, with the remainder of the business left to further sales, restructuring, or closures.

Where this leaves the retailer’s 12,000 staff is also unclear.

The Union of Shop, Distributive and Allied Workers (Usdaw) has accused Gordon Brothers of failing to engage with it to secure a path forward for the business.

In a statement Bally Auluk, national officer at Usdaw, said: “We are aware that a management buy-out has been attempted and we are told that their offers are being turned down. We found it difficult to understand why Poundland was being described as struggling, after the company recently announced they had returned to like-for-like sales growth and staff were being thanked for their ‘amazing efforts’.

“Gordon Brothers need to be open about their intentions and demonstrate their commitment to the business, which our members are successfully helping to turn around. The very least they should do is now engage with Usdaw to ensure that our members have a say in the future of their jobs.”

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