With Buyout Hopes Quashed, Poundworld Just Went into Administration


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.

It comes after a last-gasp rescue deal between the chain's owner, TPG Capital, and private equity firm Rcapital fell apart over the weekend.

Deloitte said Poundworld, which operates 335 stores across Britain, would continue to trade while a buyer for all or part of the business is sought and there would be no immediate redundancies or store closures.

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

"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."

Poundworld has around 350 stores across the United Kingdom, including branches at Bloxwich, the intu Merry Hill shopping centre in Brierley Hill, Hednesford, Lichfield, on the Reedswood Retail Park in Walsall, in Stafford and West Bromwich and two in Wolverhampton.

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Deloitte added that they believe a buyer could still be found for the business, or at least part of it.

It has been losing money for the past two years, however.

Retailers including House of Fraser, Maplins, Toys "R" Us, Mothercare, Carpetright plus a string of restaurant chains have hit the headlines this year because of trading trouble. "We thank all employees for their support at this hard time".

The chain has a store at the Richmond Centre in Derry.

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

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