Poundworld on brink of collapse as last-ditch talks fail

House of Fraser

GETTYHouse of Fraser is closing 31 of its 59 stores affecting 6,000 jobs

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

A source told Sky News that discussions about a rescue deal between Poundworld's owner, TPG Capital, and Rcapital, had fallen apart over the weekend, days after a bid from Alteri Investors, another turnaround company, had also been terminated.

Deloitte is likely to run another sale process once appointed as administrator.

There have also been casualties among independent businesses, including Hitchin town centre's Hawkins and Kenmore Interiors department stores.

'Unfortunately, this has not been possible.

The demise of Poundworld follows the collapse into administration earlier this year of both high street electronics firm Maplin and Toys R Us.

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

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

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

House of Fraser (HoF) confirmed plans last week to axe 6,000 jobs and close just over half its 59 stores.

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

Others undertaking CVAs include New Look, Mothercare and Carpetrights.

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