Poundworld collapse risks 5,100 job losses
POUNDWORLD has plunged into administration, putting 5,100 jobs in jeopardy, after efforts to secure a last-minute buyer failed.
The stricken discount chain has appointed Deloitte as administrators, casting doubt over the future of its 335 stores. It comes after sale talks between its US private equity owner TPG and Rcapital broke down over the weekend.
Poundworld’s fall from grace marks the biggest retail collapse by number of jobs this year, and follows on from the demise of Maplin and Toys R Us.
It inflicts another hammer blow to the high street following a spate of restructurings that have led to a wave of store closures and thousands of job losses.
Clare Boardman, joint administrator, said she was hopeful that a buyer could still be found for part of the Poundworld business.
She said: “The retail trading environment in the UK remains extremely challenging and Poundworld has 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.”
Poundworld’s woes have been exacerbated by the bitter conditions engulfing the high street. High inflation, waning consumer confidence, flagging footfall and fierce competition have all contributed to the retailer’s demise.
The announcement comes after House of Fraser revealed last week that it would close more than half its store estate and put 6,000 jobs at risk through a restructuring known as a company voluntary arrangement (CVA).
TPG had also been attempting to rescue Poundworld from its precarious financial position by pursuing a CVA, a type of insolvency that allows troubled companies to secure deep discounts on rents and close underperforming stores.
However, it later changed tack and opted to sell, triggering a race against time to find a buyer for the retailer.