Friday, 24 May, 2019

Poundworld on brink of collapse as last-ditch talks fail

Takeover talks fell through at the weekend Takeover talks fell through at the weekend
Ginger Lawrence | 11 June, 2018, 15:22

The collapse puts more than 5,000 jobs at risk, making it the biggest retail insolvency so far this year by job numbers.

Talks broke down over the weekend as Poundworld tried to broker a rescue deal with private equity firm R Capital.

Poundworld has around 350 stores across the UK.

Other parties named as possible buyers for the business, which is owned by TPG Capital, were turnaround specialist Alteri Investors and Poundworld's founder Chris Edwards, but a deal couldn't be struck.

The appointment of Deloitte as administrators leaves the future of five stores in the county hanging in the balance.

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.

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Deloitte said there are no redundancies or store closures now and has been working alongside the company in a bid to keep it afloat. Its collapse comes after both Toys R Us and Maplin fell into administration earlier this year.

She said the business was hit by falling footfall, alongside rising costs and weak consumer confidence. "Unfortunately, this has not been possible", Clare Boardman, joint administrator at Deloitte, said today.

Founded in 1974, Poundworld was sold to U.S. equity group TPG Capital for £150m in 2015.

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

It also comes just days after department store chain House of Fraser outlined plans to close 31 of its 59 stores - including its flagship Oxford Street outlet - affecting a total of 6,000 jobs. 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.

A TPG spokesperson said it was a "difficult decision for every party involved".