Pair of buy-out specialists fight over Poundworld deal
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.