Poundworld calls in the administrators

Collapse of retailer puts 5,100 High Street jobs in danger after rescue talks break down

Poundworld has become the latest retail casualty on the British high street as it called in administrators on Monday, putting 5,100 jobs at risk.

The budget retailer has appointed Deloitte to handle administration after rescue talks with R Capital broke down.

Poundworld, which is owned by TPG Capital, has 335 stores. Its collapse comes after both Toys R Us and Maplin fell into administration earlier this year.

Deloitte will try to find a buyer for the business, and has said there will be no redundancies or store closures at this time.

The chain has a store at Perth’s Inveralmond Retail Park and three in Fife – at Kingdom Shopping Centre, Glenrothes, Dunfermline High Street and Fife Central Retail Park in Kirkcaldy.

Clare Boardman, joint administrator at Deloitte, said: “The retail environment in the UK remains extremely challenging and Poundworld was seeking to address this by restructuring its business. Unfortunately, this has not been possible.”

She said the business was hit by falling footfall, alongside rising costs and weak consumer confidence.

A spokesman for TPG said putting the business into administration was a “difficult decision”.

“We invested in Poundworld because of our belief in how the company serves its customers and the strength of its employees,” he added.

“Despite investing resources to strengthen the business, the decline in UK retail and challenging behaviour affected Poundworld significantly.”

It is understood that TPG and Poundworld’s management rejected offers to buy the business out of a prepack administration, and were hoping to sell it as a solvent business.

Other parties named as possible buyers were turnaround specialist Alteri Investors and Poundworld’s founder Chris Edwards.

But a deal could not be struck. Poundworld’s losses widened in 201617 to £17.1 million, from £5.4 million the year before.

The news came just days after House of Fraser detailed its plans to shut 31 stores, affecting around 6,000 jobs.

The decline in UK retail and challenging behaviour affected Poundland significantly