Poundworld rescue bid fails

Troubled UK budget chain Poundworld has fallen into administration, putting it closer to collapse with the loss of up to 5,100 jobs unless a last-ditch buyer can be found.

Poundworld, which is battling against discounting in supermarkets, has appointed financial group Deloitte to help it find a buyer and stave off store closures and job losses.

The announcement on Monday comes just days after House of Fraser, the Chinese-owned department store chain, said it would close more than half its shops across Britain and Ireland, risking the loss of 6,000 jobs.

British retailers with large numbers of stores are suffering from fierce online competition from the likes of Amazon. The UK is also experiencing weak household spending generally amid Brexit uncertainty.

Speaking of Poundworld’s move, Deloitte administrator Clare Boardman said the retail trading environment in the UK remained extremely challenging and Poundworld had been seeking to address this through a restructure of its business.

“Unfortunately, this has not been possible. We still believe a buyer can be found for the business, or at least part of it, and we are keeping staff appraised of developments as they happen,” she said. “Like many high street retailers, Poundworld has suffered from high product cost inflation, decreasing footfall, weaker consumer confidence and an increasingly competitive discount retail market.”

In May, food and clothing retailer Marks and Spencer said it would shut more than 100 UK stores as it looks to move a third of overall sales online.

Emphasising the fast-growing shift to online among British consumers, Amazon last week said it planned 2,500 new UK jobs by the end of 2018.