More store trouble for UK high street
POUNDWORLD has dealt the high street a fresh blow with plans to close more than a quarter of its stores, putting up to 1,500 jobs at risk.
The discount retailer is working on a proposal for a company voluntary arrangement, expected during the first half of May, which would enable it to shut some shops and reduce rents on others. It is understood up to 100 of its 355 outlets around the country could be closed.
Redundancies among its 5,500 workforce are seen as inevitable, despite Poundworld seeking to redeploy as many as possible of the affected staff.
Poundworld is owned by US private equity firm TPG Capital, the owner of Prezzo which recently announced the closure of nearly 100 restaurants.
Other businesses scaling back their store presence include Carpetright and New Look.
As well as fierce competition, Poundworld is believed to have taken a hit from a weaker pound, which has pushed up the cost of imported goods. It posted a £17.1million loss in the year to the end of last March. Poundworld declined to comment.
Meanwhile, DIY chain Homebase blamed the Beast from the East in March for cooling demand for gardening and outdoor living products as it suffered a 15.4 per cent drop in same-store quarterly sales, with total sales down 13.5 per cent to £211million.
Its Australian owner Wesfarmers has already taken a £584million writedown after its takeover two years ago. It had hoped to replicate the success of its Bunning home improvement business in Australia, but is now considering closing up to 40 of its 250 stores.
The gloomy retail picture was compounded by CBI figures showing the volume of retail sales failing to improve in the year to April, disapppointing expectations of a return to growth on the high street.
The survey found falling volumes in clothing, footwear, furniture and carpets, offset by growth among grocers and recreational goods stores.