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Poundworld Enters Administration as Last Ditch Efforts Fail

Poundworld store

Following the failure of a rescue deal designed to sell the business, the high street discounter Poundworld has confirmed the appointment of administrators, which may lead to the closure of all 350 stores and the loss of as many as 5,100 jobs.

Late last week it was revealed that the company's last-ditch rescue attempt to save the business had collapsed, after Alteri Investors walked away from negotiations.

A further attempt to save the business over the weekend including talks with R Capital also failed, as Poundworld’s owners TPG Capital rejected offers to buy the business through a pre-pack administration, hoping instead to sell it as a solvent business.

For now, Poundworld will continue to trade from its 350 stores, until a buyer is found for part or all of the store estate. A TPG spokesperson said “This was a difficult decision for every party involved. We invested in Poundworld because of our belief in how the company serves its customers and the strength of its employees. Despite investing resources to strengthen the business, the decline in UK retail and changing consumer behaviour affected Poundworld significantly.”

Deloitte joint administrator Clare Boardman added: “The retail trading environment in the UK remains extremely challenging and Poundworld has been seeking to address this through a restructure of its business. Unfortunately, this has not been possible.

“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. We thank all employees for their support at this difficult time.”

In May, Poundworld placed its CVA plans on hold opting to try and sell a chunk of the company, drafting in Deloitte to help find a buyer.

Read - Poundworld to shut 117 stores.

In recent weeks the company has had it's credit insurance withdrawn, which led to suppliers demanding immediate payments of over £6m, resulting in poor stock availability across the chain.

Source: Insight DIY Team

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11 June 2018

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