Pound­world col­lapse risks 5,100 job losses

The Daily Telegraph - Business - - Front Page - By Ben Woods

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.

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