Round two of Pound­world clo­sures to af­fect 80 stores and cost 1,000 ex­tra jobs

The Guardian - - FINANCIAL - Rob Davies

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.

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