Poundworld expected to go into administration in next few hours

Poundworld expected to go into administration in next few hours

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

British discount retailer Poundworld has gone into administration, putting 5,100 jobs at risk and becoming the latest victim of brutal trading conditions in the United Kingdom retail sector. Losses for the financial year 2016-17 were £17.1m, up from £5.4m the year before.

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

In the meantime, they have said that no redundancies or store closes are planned during this period and Poundworld would continue to trade as usual while it sought a buyer.

The retailer, which has stores in Blackburn, Accrington and Burnley is poised to appoint Deloitte to handle an administration after last-ditch rescue talks with R Capital broke down over the weekend.

"The retail trading environment in the United Kingdom remains extremely challenging and Poundworld has been seeking to address this through a restructure of its business", said joint administrator, Clare Boardman.

Like many retailers, Poundworld has been hit by falling consumer confidence, rising overheads, the weaker pound and the growth of online shopping.

'Unfortunately, this has not been possible.

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Other parties named as possible buyers were turnaround specialist Alteri Investors and Poundworld's founder Chris Edwards.

Poundworld, which has its headquarters in West Yorkshire, was formed in 2004, but it says it can trace its origins "back to 1974 and a market stall in Wakefield, West Yorkshire".

There has previously been speculation that Poundworld was going to axe 100 shops but if the budget store goes into administration, it means all of its 355 shops face potential closure.

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

The news came just days after House of Fraser detailed its plans to shut 31 stores, affecting around 6,000 jobs.

It also operates the Bargain Buys chain which has a store in Gravesend.

Other retailers undertaking CVAs in a bid to keep trading include New Look, Mothercare and Carpetright.

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