Published: Mon, June 11, 2018
Finance | By Loren Pratt

Budget retailer Poundworld about to collapse - Over 5000 jobs in jeopardy

Poundworld has called in administrators, making it the latest casualty in a retail bloodbath on Britain's high streets.

The budget retailer, which was has its head office in Normanton, Wakefield, collapsed after last-ditch rescue talks broke down over the weekend.

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

Poundworld, which is owned by TPG Capital, has around 335 stores, employing 5,100 people.

Accountancy firm Deloitte, which was appointed as administrator on Monday morning, said Poundworld had suffered from "high product cost inflation, decreasing footfall, weaker consumer confidence and an increasingly competitive discount retail market".

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.

'Unfortunately, this has not been possible.

It recently opened a large store in the centre of Bradford - bringing new life to Darley Street which has been hit by a wave of store closures. In 2016-17, losses for the financial year were £17.1m, up from £5.4m the year before.

Poundworld has gone into administration today following the collapse last week of talks with a rescue buyer.

"We 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".

Poundworld, which has 355 stores, and serves two million customers a week, also trades under the Bargain Buys brand name.

A TPG Capital spokesman said: "This was a hard decision for every party involved".

The news comes hot on the heels of House of Fraser revealing it was to close more than half of its United Kingdom stores in a bid to make it viable.

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