Poundworld faces collapse after talks fail

Six men due in court in bid to block prosecutions over Hillsborough disasterA number of national media outlets are reporting that Poundworld is set to appoint administrators this morning after rescue talks broke down.

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.

Deloitte said in a statement: '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.

There remains optimism that a proportion of the chain's staff will avoid losing their jobs if buyers can be found for part of the business during the administration process.

"Unfortunately, this has not been possible".

"We invested in Poundworld because of our belief in how the company serves its customers and the strength of its employees", he added.

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

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

The high street has also been rocked by a succession of retailers and restaurant chains unveiling plans to shut down stores to reflect tougher trading conditions.

Poundworld's losses widened in 2016-17 to £17.1 million, from £5.4m of losses the year before.The retailer was hit with a £5.7 million charge for onerous leases, a provision retailers make when the cost of a lease is no longer covered by the income of the store.

The company is seeking landlord approval for the restructuring plan, which is a form of insolvency known as a Company Voluntary Agreement (CVA).

Others undertaking CVAs include New Look, Mothercare and Carpetrights.

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