Poundland, the discount chain that built its brand on everything costing a pound, is now discovering that survival costs considerably more. The retailer has filed a notice of intention to appoint administrators, which - if the High Court approves it - will grant the business 10 days of breathing space to find a rescue deal, the BBC understands.

In a memo to his 12,000 staff across 600 stores on Tuesday, managing director Barry Williams informed employees that the chain's American owner had limited its access to funding. Nothing says "we believe in this business" quite like restricting its cash flow.

Gordon Brothers bought the struggling Poundland from Polish retail group Pepco last year for the princely sum of £1 - a nominal price that, in hindsight, may have been a clue. Little over a year later, in September, it put the business up for sale. Irish firm Martin Property Group (MPG) submitted a bid to take the business on as a going concern, but it is understood this did not meet Gordon Brothers' expectations.

Specifically, Gordon Brothers wants to recoup a £30m shareholder loan it inherited from the previous owners, and the MPG offer fell short of that £30m total. MPG, for its part, wasn't prepared to pay the full amount in advance - a stance that is either prudent or fatal, depending on which side of the negotiating table you occupy.

For now, Poundland is heading toward an insolvency process, with Gordon Brothers either seeking a new owner through a pre-pack administration or breaking the business up and selling parcels of stores to interested parties such as Iceland, Lidl, and B&M. It's the retail equivalent of a jumble sale, except the items are entire shops and the price tags are no longer £1.