Poundworld set to become latest retail failure, putting 5,100 jobs at risk
The budget retailer is poised to appoint administrators, following the likes of Maplin and Toys R Us.
Poundworld is set to become the latest retail casualty on the British high street as it calls in administrators, putting 5,100 jobs at risk.
The budget retailer is poised to appoint Deloitte to handle an administration after last-ditch rescue talks with R Capital broke down over the weekend.
Poundworld, which is owned by TPG Capital, has around 350 stores. Its possible collapse comes after both Toys R Us and 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.
Other parties named as possible buyers were turnaround specialist Alteri Investors and Poundworld’s founder Chris Edwards.
But a deal could not be struck.
Poundworld’s losses widened in 2016-17 to £17.1 million, from £5.4 million of losses the year before.
The retailer’s move would come just days after House of Fraser detailed its plans to shut 31 stores, affecting around 6,000 jobs.
House of Fraser is seeking landlord approval for the restructuring plan, which is a form of insolvency known as a Company Voluntary Agreement (CVA).
A raft of CVAs have been struck in recent months as retailers struggle amid surging costs, rising business rates, competition from online rivals and a slowdown in consumer spending.
Other retailers undertaking CVAs in a bid to keep trading include New Look, Mothercare and Carpetright.
Restaurant businesses have also been seeking to cut their costs with store closure programmes, with Carluccio’s, Byron and Prezzo all pushing through CVAs this year.