Published: Mon, June 11, 2018
Money | By Armando Alvarado

Poundworld collapse leaves 5,100 jobs at risk

Poundworld collapse leaves 5,100 jobs at risk

The discount retailer, which serves two million customers a week, has appointed administrators after talks with a potential buyer, R Capital, collapsed.

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

A source said discussions between Poundworld's owner, TPG Capital, and Rcapital about a rescue deal had fallen apart over the weekend, days after a bid from Alteri Investors, another turnaround investor, had also been terminated.

Administrators Deloitte have stressed that the stores will continue to operate as normal for the moment, with no redundancies.

'Unfortunately, this has not been possible.

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

Many of these have been struck this year as retailers have struggled with surging costs, rising business rates, competition from online rivals and a slowdown in consumer spending.

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Deloitte, which has been co-ordinating efforts to find a solvent deal for the business, is expected to oversee the administration of Poundworld.

A spokesman for TPG said putting the business into administration was a "difficult decision".

There remains some optimism that a proportion of the chain's 5,300 staff will avoid losing their jobs if buyers can be found for parts of Poundworld's business during the administration process.

"Despite investing resources to strengthen the business, the decline in United Kingdom retail and changing consumer behaviour affected Poundworld significantly".

The news follows further misery on the high street after last week department store chain House of Fraser announced its plans to close 31 outlets and axe 6,000 jobs.

Others undertaking CVAs include New Look, Mothercare and Carpetrights.

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