Saturday, 17 November, 2018

5,000 jobs at risk as Poundworld slides towards administration

Nellie Chapman | 11 June, 2018, 18:28

Poundworld, which has a chain of 335 shops, filed a notice of intention to appoint an administrator last Thursday, giving it temporary protection from its creditors.

Nearly 200 jobs at 12 Poundworld stores here are at risk after the budget retailer called in administrators today.

After buyout firm Alteri Investors walked away from a rescue deal, Poundworld's owner TPG Capital said it was in talks with other potential buyers.

Poundworld has around 350 stores across the UK.

Several retailers have shown significant financial distress this year, with both Maplin and Toys R Us disappearing from the high street.

There remains optimism that a proportion of the chain's staff will avoid losing their jobs if buyers can be found for part of the business during the administration process.

Deloitte said in a statement: 'Like many high street retailers, Poundworld has suffered from high product cost inflation, decreasing footfall, weaker consumer confidence and an increasingly competitive discount retail market.

Clare Boardman, joint administrator of Poundworld, said that the chain had been affected by the "challenging" retail environment.

Deloitte said there are no redundancies or store closures now and has been working alongside the company in a bid to keep it afloat.

"Unfortunately, this has not been possible".

Deloitte added that they believe a buyer could still be found for the business, or at least part of it. "We thank all employees for their support at this hard time".

The stores suffered a major rise in multi-million pound losses past year - rising from £5.4m to £17.1m in 2016/17.

Carpetright (Other OTC: CGHXF - news), Marks & Spencer (Frankfurt: 534418 - news), Mothercare (Other OTC: MHCRF - news) and New Look are among the other retailers which have announced store closure plans this year, with thousands of jobs disappearing as a outcome.