Poundworld has become the latest retail casualty on the British high street as it called in administrators on Monday, putting 5,100 jobs at risk.

The budget retailer has appointed Deloitte to handle an administration after last-ditch rescue talks with R Capital broke down over the weekend.

Poundworld, which is owned by TPG Capital, has 335 stores. Its collapse comes after both Toys R Us and Maplin fell into administration earlier this year.

Deloitte will try to find a buyer for the business, and has said there are no redundancies or store closures at this time.

Clare Boardman, joint administrator at Deloitte, said: “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.” </s> Poundworld has become the latest retail casualty on the British high street as it called in administrators on Monday, putting 5,100 jobs at risk.

The budget retailer has appointed Deloitte to handle an administration after last-ditch rescue talks with R Capital broke down over the weekend.

Poundworld, which is owned by TPG Capital, has 335 stores. Its collapse comes after both Toys R Us and Maplin fell into administration earlier this year.

Deloitte will try to find a buyer for the business, and has said there are no redundancies or store closures at this time.

Clare Boardman, joint administrator at Deloitte, said: “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.”

She said the business was hit by falling footfall, alongside rising costs and weak consumer confidence.

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

“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 UK retail and challenging behaviour affected Poundworld significantly.”

It is understood that TPG and Poundworld’s management rejected offers to buy the business out of a pre-pack administration, and were hoping to sell it as a solvent business.

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

But a deal could not be struck.

Poundworld’s losses widened in 2016-17 to £17.1 million, from £5.4 million of losses the year before.

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

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

A raft of CVAs have been struck in recent months as retailers struggle amid surging costs, rising business rates, competition from online rivals and a slowdown in consumer spending.

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

Restaurant businesses have also been seeking to cut their costs with store closure programmes, with Carluccio’s, Byron and Prezzo all pushing through CVAs this year. </s> Budget retailer Poundworld has become the latest victim of harsh trading conditions in the UK retail. The British chain has appointed Deloitt as its administrator, putting 5,100 jobs at risk.

According to many reports, Poundworld was in talks with a potential buyer R Capital, but the talks collapsed over the weekend, forcing the group into administration today.

Meanwhile, Deloitte has stated that the stores will continue to trade as normal with no redundancies at this time: “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.

A spokesperson for Poundworld”s owner, TPG added that filing for administration had been “a difficult decision”.

The collapse of Poundworld comes days after the news of Toys R Us UK, Maplin and drinks wholesaler Conviviality. </s> Have your say

Poundworld has become the latest retail casualty on the British high street as it calls in administrators, putting 5,100 jobs at risk.

The budget retailer has appointed Deloitte to handle an administration after last-ditch rescue talks with R Capital broke down over the weekend.

Poundworld has at least 35 stores in Scotland, including six in Edinburgh.

There are round 350 Poundworld outlets across the UK.

The firm’s imminent collapse comes after both Toys R Us and Maplin fell into administration earlier this year.

Poundworld will continue to trade while a buyer for all or part of the business is sought, Deloitte said, adding that there were no redundancies or store closures at this time.

Clare Boardman, joint administrator at Deloitte, said: “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.”

It is understood TPG and Poundworld’s management rejected offers to buy the business out of a pre-pack administration and were hoping to sell it as a solvent business.

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

But a deal could not be struck.

A TPG spokesman 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.”

Poundworld’s losses widened in 2016/17 to £17.1 million, from £5.4m of losses the year before.

The retailer’s move would come just days after House of Fraser detailed its plans to shut 31 stores, affecting around 6,000 jobs.

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

A raft of CVAs have been struck in recent months as retailers struggle amid surging costs, rising business rates, competition from online rivals and a slowdown in consumer spending.

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

Restaurant businesses have also been seeking to cut their costs with store closure programmes, with Carluccio’s, Byron and Prezzo all pushing through CVAs this year.

READ MORE: Record foreign investment in Scotland as London falls away

Here is the full list of Poundworld stores: </s> Poundworld crashed into administration yesterday, putting more than 300 stores and 5,000 jobs at risk amid conditions described by analysts as the worst period for the high street since the financial crisis.

The total number of retail store closures so far this year will total 1,398 if Poundworld is forced to shutter at least 100 of its 335 sites, according to data compiled by the Centre for Retail Research.

Based on these figures, the retail sector has haemorrhaged 27,750 jobs already this year.

Professor Joshua Bamfield of the Centre for Retail Research said this put 2018 on track to be the worst year for retail since the height of the recession, with 10,000 store closures expected by the end of the year.

Poundworld’s founder Chris Edwards confirmed yesterday that he was trying to assemble a bid to save some 200 of the retailer’s stores.

But concerns are growing that a “toxic mix” has made the high street a death trap for retailers.

Richard Lim, chief executive of Retail Economics said: “It’s been the toughest year since the financial crisis and I think there’s a toxic mix of factors that are all hitting the sector at the moment.” He cited a softer consumer environment, higher operating costs, and the impact of online shopping.

“Those retailers with large property portfolios are not able to react fast enough to the structural changes,” he added.

Robert Hayton, head of UK business rates at real estate advisor Altus Group, said that the government must tax the digital economy in order to even up the playing field for bricks-and-mortar retailers.

“Internet retailing is convenient, but will lead to the substantial extinction of the high street if left unchecked,” he said. “Extra taxes raised from digital businesses could be ring fenced and invested in encouraging people back to our high streets.”

Meanwhile Diane Wehrle, insights director at Springboard, said the average decline in footfall so far this year is three per cent, the worst level since 2012.

“We will see a reduced number of stores,” she said. “Some will never come back into retail use and that’s quite shocking.”

Read more: House of Fraser confirms plans to close more than half of its stores

Poundworld’s collapse yesterday made it the latest casualty of the retail sector this year, following the failures of Toys R Us and Maplin in March, while Fabb Sofas also fell into administration just last week.

The news also came just days after House of Fraser announced plans to close more than half its stores through a company voluntary arrangement (CVA). The process has been used by New Look, Mothercare, Carpetright and several other retailers this year, resulting in heavy store closures.

Read more: DEBATE: Does it matter if consumers desert the high street? </s> More than 5,300 jobs are at risk after discount chain Poundworld went into administration.

Gloucester’s Eastgate Street branch is one of 355 at risk after Daniel Butters and Clare Boardman, restructuring partners at Deloitte, were appointed joint administrators.

The retailer will continue to trade while it searches for a buyer for all or part of the business. No redundancies or store closures have been announced yet.

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

"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.”

Poundworld, which is owned by TPG Capital, has so far failed to sell the retailer as a solvent business.

A spokeswoman for TPG said Poundworld deciding to go into into administration was a "difficult decision".

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

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

Poundworld's losses widened in 2016-17 to £17.1million, from £5.4million 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.

This is the latest blow to the high street after House of Fraser confirmed plans to close 31 stores last week.

Cirencester will be one of the store hit as the 169-year-old company closes its branch in Market Place.

Both Maplin and Toys R Us have disappeared from the high street, while Carpetright, Mothercare and New Look have undertaken sweeping store closure programmes.

Restaurant groups including Carluccio's, Prezzo and Byron have also been shutting dozens of stores as they are squeezed by rising costs and a fall in consumer spending.

Here is full list of Poundworld stores: </s> Image copyright PA

Discount retailer Poundworld has appointed administrators, putting 5,100 jobs at risk.

The move came after talks with a potential buyer, R Capital, collapsed leaving Poundworld with no option other than administration.

Poundworld, which serves two million customers a week from 335 stores, also trades under the Bargain Buys name.

Administrators Deloitte stress the stores will continue to trade as normal with no redundancies at this time.

It 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.

Clare Boardman, joint administrator at Deloitte, said: "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."

She said Deloitte believed a buyer could be found for the business, or at least part of it.

A spokesperson for Poundworld''s owner, TPG said filing for administration had been "a difficult decision".

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

Poundworld has been losing money for the past two years. Losses for the financial year 2016-17 were £17.1m, up from £5.4m the year before.

Tough

It's the latest High Street retailer to run into trouble.

Just last week, department store chain House of Fraser said it would close 31 of its 59 shops, citing the need to adapt to "fundamental change" in the retail industry.

A combination of falling consumer confidence, rising overheads, the weaker pound and the growth of online shopping have made it tough for traditional retailers.

Electronics chain Maplin and toy chain Toys 'R' Us both collapsed into administration earlier this year.

Other High Street chains such as Mothercare and Carpetright have been forced to close stores in order to survive.

Restaurant chains such as Italian chain Carluccio's, pizza restaurant Prezzo and burger chain Byron have also had to close stores as they battle a triple-whammy of falling trade, higher costs and increased competition.

Analysis by BBC business correspondent Jonty Bloom

Only a few years ago Poundworld was expanding aggressively, now it is set to become yet another High Street casualty.

It has, of course, been hit by the usual suspects, lower consumer confidence, falling footfall and more online shopping.

But for pound shops these problems can be multiplied; for a start they depend on high turnover because the margin of profit when everything is sold for a pound is minute.

Then they import a lot of what they sell, including large amounts from specialised suppliers in China. The weakness of the pound has pushed up the cost of imports and when by definition it is impossible to increase their prices, the squeeze on pound shop profits can be dramatic and very sudden.

'Too many mouths'

Independent retail analyst Richard Hyman said Poundworld was simply not managing its business well enough. "The clue's in the name: These days having a fixed price in the title is a disadvantage but it is not a killer disadvantage.

"Importing products is not peculiar to Poundworld but others have been getting round this by getting manufacturers to put fewer biscuits in the pack, for example.

"The bigger picture is there are too many retailers with too many stores for the market to feed."

But despite the collapse of so many stores, David Gill, the national officer for the Union of Shop, Distributive and Allied Workers, was not wholly pessimistic: "When Toys R Us went into administration we had a number of retailers we work closely with saying 'there are job vacancies can you point them in this direction?', but whether you can absorb all 5,000 jobs that's another discussion."

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".

In 2014 Poundworld's founder Chris Edwards took a central part in a BBC documentary about the intense competition between the company and its rivals Poundstretcher and Poundland.

Investment company TPG, which bought a majority stake in Poundworld in 2015, also controls the restaurant chain Prezzo whose landlords and creditors agreed a restructuring last month. </s> Talks with potential buyer R Capital collapsed meaning the chain had no other option but to put Poundworld into administration.

Administrators Deloitte stress the stores will continue to trade as normal with no redundancies at this time.

It 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.

Clare Boardman, joint administrator at Deloitte, said: "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."

She said Deloitte believed a buyer could be found for the business, or at least part of it.

A spokesperson for Poundworld's owner, TPG said filing for administration had been "a difficult decision".

They added: Despite investing resources to strengthen the business, the decline in UK retail and changing consumer behaviour affected Poundworld significantly."

Poundworld serves two million customers a week from 355 stores - 39 of which are in Scotland - and also trades under the Bargain Buys name. </s> LONDON, June 11 — Troubled UK budget chain Poundworld today fell into adminstration, putting it closer to collapse with the loss of up to 5,100 jobs unless a last-ditch buyer can be found.

Poundworld, which is battling against discounting in supermarkets, has appointed financial group Deloitte to help it find a buyer and stave off store closures and job losses.

The announcement comes just days after House of Fraser, the Chinese-owned department store chain, said it is closing more than half its shops across Britain and Ireland, risking the loss of 6,000 jobs.

British retailers with large amounts of stores are suffering also from fierce online competition from the likes of Amazon.

The UK is also experiencing weak household spending generally amid Brexit uncertainty.

Speaking of Poundworld’s move, Deloitte administrator Clare Boardman said that “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,” she added in a statement.

Operating out of 335 stores, Poundworld sells items including household cleaning items and confectionery mostly priced at £1.

“Like many (UK) high street retailers, Poundworld has suffered from high product cost inflation, decreasing footfall, weaker consumer confidence and an increasingly competitive discount retail market,” Deloitte said.

Last month, British food-to-clothing retailer Marks and Spencer said it would shut more than 100 UK stores as it looks to shift at least one third of overall sales online.

Emphasising the fast-growing shift to online among British consumers, Amazon last week said it plans 2,500 new UK jobs by the end of the year. — AFP
British retail chain Poundworld, which employs thousands of people, collapses into administration.