Poundworld fighting for survival as talks on takeover collapse
Poundworld, which has around 15 stores in Northern Ireland, is facing a race against time to avoid collapse, with administrators on standby after a buyer walked away from talks to rescue the business.
The budget retailer is so low on cash it might have to call in administrators within days, sources told the Press Association, putting 5,300 jobs at risk.
Poundworld has been put up for sale by its private equity owner TPG Capital, but a potential buyer, Alteri Investors, has walked away from sale talks.
The company's management said they are in talks with other potential buyers, and it is thought that Poundworld's founder, Chris Edwards, might take on the business.
However, the retailer's advisers at Deloitte are understood to be preparing contingency plans for an administration should talks collapse.
It is understood that during the sale process, which is being steered by Poundworld's lender Santander, the retailer has rejected offers to buy the business through a pre-pack administration.
However, with Alteri walking away from its bid, a sale through a pre-pack administration is still possible.
Poundworld's losses widened in 2016-17 to £17.1m, from £5.4m of losses the year before.
The retailer was hit with a £5.7m charge for onerous leases, a provision retailers make when the cost of a lease is no longer covered by the income of the store.
Several retailers have shown significant financial distress this year, with both Maplin and Toys R Us disappearing from the high street.
In addition, Carpetright, Mothercare and New Look have all undertaken sweeping store closure programmes.
But in good news for retail in Northern Ireland, three of four vacant Toys R Us stores here are close to being occupied.
The sites at Abbey Retail Park, CastleCourt Shopping Centre, Sprucefield Park in Lisburn and Crescent Link in Londonderry have been vacant since the firm went into administration earlier this year.
The Crescent Link store is to be taken over by B&M Bargains, while there are talks over the letting of the CastleCourt store.
And the Abbey Retail Park site is under offer. It had been part of a Toys R Us property company.