A major Poundland supplier has said it will lose millions of pounds if the retailer goes bust.

Adam Turner, sales director at Bradford-based Highcrest Retail Brands, said Poundland was one of its biggest customers and its collapse would cost it “a few million” in lost sales.

Poundland’s owner, US-based investment firm Gordon Brothers, is facing government scrutiny after refusing a bid which would have kept the retailer in business.

Gordon Brothers has previously said Poundland faces multiple economic challenges from rising inflation, increasing staff costs, and “severe levels of shoplifting”.

Highcrest, a family owned business, mainly sells confectionery to Poundland and turns over about £50m.

Turner said the firm becoming insolvent would leave a substantial gap in its balance sheet next year.

Highcrest was a “longstanding business that can stomach this”, Turner said. But he warned other medium and small suppliers to the retailer have told him that “if Poundland goes under, so do they”.

This echoes a warning from Poundland founder Steve Smith on Monday that two or three thousand suppliers to the firm, which only work for Poundland, would be directly affected by its collapse.

Not only 12,000 Poundland staff would be affected, but also potentially tens of thousands more, he said.

Speaking to the BBC on Wednesday, Smith said up to 30,000 jobs could be lost as result.

He said he was “amazed” Poundland was being put into administration, pointing to the profitability of the company.

“Also, there’s two offers on the table from some really good people,” he added.

“All I’m asking is for Gordon Brothers to see if they can put a deal together.”

Gordon Brothers said Poundland is “still not cash generative at a sustainable level” because of the economic issues it faces.

If Poundland’s stores are sold to new buyers, some of the employees may get new jobs on the same premises.

However, it is understood that buyers are only interested in about half the stores at present – meaning roughly 6,000 employees would not be re-employed.

If Poundland goes under, suppliers will be getting “pennies in the pound” back from the administration, he said, which is “very upsetting” – although he still hopes a deal can be done so Poundland can remain solvent.

Poundland owners Gordon Brothers will be a secured creditor, which means they are first in line to get their money back, and suppliers “who have done nothing wrong” will take the financial hit.

“It’s sad. It’s a nightmare for us all to be honest with you. It’s not just the suppliers, it’s the staff at Poundland, some of these guys have been there for many years.

“It’s from the warehouse staff all the way to the shop staff to everybody within head office. It’s a massive ripple effect through the supply chain,” he added.

Turner said he had no knowledge of whether Gordon Brothers had deliberately timed the process of Poundland going into administration so it could take advantage of having high stock levels, which it can then sell.

One of the ways Gordon Brothers makes money is through stock liquidations – selling off stock from collapsed businesses.

One insider familiar with the situation told the BBC that the timing of Poundland facing collapse was “odd” – most retailers don’t fall over in the run-up to Christmas.

Meanwhile, business secretary Jonathan Reynolds will meet with Gordon Brothers later this week after he and Prime Minister Andy Burnham questioned why a solvent deal had not been made.

Business Minister Kate Dearden told MPs that government officials had also met with representatives from Gordon Brothers on Monday.

“I am deeply concerned about the uncertainty surrounding Poundland’s future and the impact it could have on its staff and their families who are at the forefront of my mind,” Dearden told the House of Commons.

“Poundland is not currently in administration and the business continues to trade, but this is a worrying time for employees, suppliers and communities”, she added.

The minister confirmed she would also be meeting with Poundland executives on Wednesday.

She said the government doesn’t want to interfere with “current ongoing commercial negotiations”, but said ministers would be seeking “clarity” on the plans for the retailer.

“It’s absolutely legitimate for this government to ask the business if they’re doing everything they can to protect employees and suppliers up and down the country,” she added.

Dearden told MPs that the government would be ready to help the company’s employees, should the current situation end in administration.

“We stand ready to support them if they need to move into new employment, however… our priority is always in protecting jobs and the Secretary of State and I will continue to engage with the company to secure the best possible outcome,” she added.

The head of Gordon Brothers’ European operations reportedly told the government that the firm stood by its stewardship and had given Poundland £85m in additional financing since its purchase in 2025.