skip to main content
Find Insight DIY on
* * *

UK DIY News

Poundworld to shut 117 stores

Poundworld store

Poundworld will close 117 of their 355 stores as part of a company voluntary arrangement (CVA), it has been revealed.

According to The Grocer magazine, the discounter will close all 117 branches by 31st August, with the remaining 231 having rent reductions from their landlords.

In a document detailing the CVA, the company revealed it had been hammered since the loss of its credit insurance. Credit insurance is designed to protect suppliers in case a company falls into administration before they have been paid for their goods. However, It is often withdrawn, or rates are severely increased as soon as  retailers begin to show signs of financial struggle, and as a result many suppliers insist on full payment immediately.

In the case of Poundworld, this lead to a £6 million bill to its suppliers, but also stock availability issues of the peak Christmas period. Also mentioned as difficulties for the business was the Brexit-hit sterling, rising overheads including business rates and wages, as well as falling consumer spend.

It will now seek an additional £15 million in funding from Santander once the CVA is completed to support its turnaround effort. This is in addition to an emergency cash injection of £20 million from its owner TPG, which it said it had already “utilised”.

Source: Insight DIY Team

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.

24 May 2018

Related News

view more UK DIY News
*

I find the news and articles they publish really useful and enjoy reading their views and commentary on the industry. It's the only source of quality, reliable information on our major customers and it's used regularly by myself and my team.

*
Simon Fleet - Sales & Marketing Director, Thomas Dudley Ltd
Newsletters

Don't miss out on all the latest, breaking news from the DIY industry