Fears for 200 Poundworld jobs as last-ditch rescue talks fail
Almost 200 jobs at 12 Poundworld stores in Northern Ireland are at risk after the budget retailer called in administrators yesterday.
Four stores are in Belfast, with the remainder in Newtownabbey, Newtownards, Londonderry, Craigavon, Armagh, Omagh, Bangor and Cookstown.
There are 188 employees in total here with branch staff numbers ranging from 10 to 20. The largest Poundworld workforce is at the Longwood Retail Park in Newtownabbey.
Deloitte confirmed it had been appointed after last-ditch rescue talks with potential buyer R Capital broke down over the weekend.
Poundworld, which is owned by private equity firm TPG Capital, has 335 stores in the UK and employs around 5,100 people.
The administrators said the chain will continue to trade while a buyer for all or part of the business is sought. There are no redundancies or store closures at this time.
Poundworld founder Chris Edwards was yesterday in talks with Deloitte about potentially taking on around 200 of the 335 stores in trouble.
Mr Edwards sold the chain to TPG in 2015 for a reported £150m. He took over at one of Poundworld's chief rivals, Poundstretcher, last October. However he lasted just six months in the role.
Deloitte said Poundworld had suffered from high product cost inflation, decreasing footfall, weaker consumer confidence and an increasingly competitive discount retail market.
"The retail trading environment in the UK remains extremely challenging and Poundworld has been seeking to address this through a restructure of its business," said joint administrator Clare Boardman.
"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. We thank all employees for their support at this difficult time."
The announcement comes after both Toys R Us and electrical firm Maplin fell into administration earlier this year.
It is understood that TPG and Poundworld's management rejected offers to buy the business out of a pre-pack administration and were hoping to sell it as a solvent business. Turnaround specialist Alteri Investors was also named as a potential buyer though a deal could not be struck.
Poundworld's losses widened in 2016-17 to £17.1m, from £5.4m of losses the year before.
Retail NI chief executive Glyn Roberts said the discount retail market had become increasingly crowded and competitive.
But he added: "It is wrong to say we are facing the death of the high street. It is going through huge change and restructuring which is clearly resulting in a number of business failures.
"Those retailers that are adapting to an ever-changing market are ultimately those that will survive."
Department store House of Fraser last week announced it would close 31 out of 59 stores.