Poundland has agreed to take on the leases of 71 Wilko shops, providing hundreds of jobs and easing pressure on the retail sector.

Pepco Group, which owns Poundland in the UK, is expected to convert the stores to the Poundland brand.

In a statement, the company said that Wilko staff would have priority when applying for new jobs at the Poundland shops.

Meanwhile, hundreds of Wilko shop workers will lose their jobs from today after the failure of talks involving the HMV owner Doug Putman. The company employed around 12,500 staff.

Wilko fell into administration last month after struggling with losses and competition from other discount chains, such as B&M, Poundland and The Range.

Mr Putman, the billionaire owner of music retailer HMV, had been trying to buy at least 100 Wilko shops but the deal fell through as rising costs complicated the deal.

B&M is buying 51 of Wilko’s buildings in a £13m deal, but it has not acquired the brand.