Round two of Poundworld closures to affect 80 stores and cost 1,000 extra jobs
Administrators in charge of finding a buyer for Poundworld have announced a further 80 stores are to close, with the loss of more than 1,000 jobs.
The second wave of store closures adds to the 25 announced earlier this week, which will result in 242 staff being made redundant this weekend. The next round of store closures will take place between 20 and 26 July.
Poundworld collapsed into administration last month after rescue talks with potential buyers failed, sparking fears for the jobs of its 5,100 staff at 335 shops, 230 of which remain open.
Deloitte, the accountancy firm acting as Poundworld’s administrator, said the latest closures will not affect the potential sale of the remaining shops, and that discussions with interested parties were continuing.
Joint administrator Clare Boardman said: “Whilst we remain hopeful that a sale for part, or parts, of the business can still happen, it has not been possible to sell the business as a whole.
“We would like to thank all the employees for their continued support and commitment during this difficult time. We are keeping staff appraised of developments as they happen.”
The shopworkers’ trade union Usdaw said the Poundworld closures were “devastating” for its members.
“We welcomed Deloitte’s initial approach for Poundworld to continue to trade while a buyer for all or part of the business is sought,” said national officer Dave Gill. “However, now the second wave of store closures has been announced, it is clear the future of the business looks very bleak.”
The Poundworld founder Chris Edwards has previously criticised Deloitte for rejecting his offer to buy the business back. He said the deal would have saved 3,000 jobs.
He said: “The amount of extra money the administrator is holding out for is a drop in the ocean when you consider how much money will be needed to stabilise the business and replenish stock levels, which is where the real costs will be incurred, and that’s why we can’t increase our offer. I now believe the business will close rather than jobs being saved.”
Edwards founded the business in Wakefield in 1974 before selling it to TPG Capital, a US private equity firm, for £150m in 2015. Previous potential rescue buyouts from the private equity firms Rcapital and Alteri Partners also fell through after talks with TPG.
Deloitte said Poundworld had struggled in an increasingly competitive market and through “high product-cost inflation, decreasing footfall [and] weaker consumer confidence”.
Its demise echoed similar business failures of high street names this year including the electronics firm Maplin and Toys R Us. Last month, House of Fraser announced plans to close 31 shops, while Carpetright, Mothercare and New Look are also closing outlets.