Poundworld is on brink of going bust

POUNDWORLD is poised to announce its intention to appoint administrators, putting around 5,300 jobs at risk.

The budget retailer, which has 5,300 staff, is low on cash and is filing the notice because it will give it time to structure a deal, which could be undertaken through a pre-pack administration, with private equity firm R Capital.

The administration will be handled by Poundworld’s advisers Deloitte.

Management has so far failed to sell the retailer Poundworld, which is owned by TPG Capital, as a solvent business, after turnaround specialists Alteri Investors walked away from talks.

Poundworld’s losses widened in 2016-17 to £17.1m, from £5.4m of losses the year before.

The retailer was hit with a £5.7m charge for onerous leases, a provision retailers make when the cost of a lease is no longer covered by the income of the store. The news comes on the same day that House of Fraser said it will axe 31 stores, putting 6,000 jobs at risk.