Pair of buy-out spe­cial­ists fight over Pound­world deal

The Sunday Telegraph - Money & Business - - Front page - By Ben Woods

A TWO-WAY bat­tle is tak­ing place to res­cue the strug­gling re­tailer Pound­world from the brink of in­sol­vency.

US pri­vate equity house Flacks Group and Al­teri In­vestors, the for­mer owner of Austin Reed, are vy­ing to take con­trol of the loss-mak­ing dis­count chain.

The two com­pa­nies have emerged as the most likely buy­ers af­ter owner TPG put the busi­ness up for sale, The Sun­day Telegraph un­der­stands.

The sale process led by Deloitte had at­tracted a num­ber of bid­ders, but it is un­der­stood that Al­teri In­vestors and Flacks Group now both con­sider them­selves in prime po­si­tion to strike a deal.

Flacks Group is based in Mi­ami, Flor­ida, and spe­cialises in buy­ing distressed busi­nesses. Turn­around group Al­teri is backed by pri­vate equity firm Apollo Man­age­ment and briefly owned Austin Reed be­fore it col­lapsed in 2016.

Us-based TPG had been at­tempt­ing to res­cue Pound­world from its pre­car­i­ous fi­nan­cial po­si­tion by pur­su­ing a com­pany vol­un­tary ar­range­ment (CVA), be­fore de­cid­ing to sell. Un­der the CVA plans, TPG was look­ing to cut away 100 shops from the re­tailer’s 355-strong store es­tate, putting hun­dreds of jobs at risk.

West York­shire-based Pound­world, which also owns the Bar­gain Buys brand, serves more than two mil­lion cus­tomers and em­ploys 5,500 staff.

It is among a clutch of re­tail­ers that have been scram­bling for life­lines amid tougher trad­ing on the high street. Mother­care, Car­petright and New Look have all se­cured CVAS, which al­low com­pa­nies to shut down un­der­per­form­ing stores and se­cure deep dis­counts on rents.

House of Fraser plans to axe up to half of its 59 UK stores later this month, but fears are grow­ing that land­lords may re­ject the pro­pos­als.

Deloitte, Al­teri In­vestors and Flacks Group de­clined to com­ment.

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