Poundworld set to appoint administrators, putting 5,300 jobs at risk
BUDGET retailer Poundworld is poised to announce its intention to appoint administrators, putting around 5,300 jobs at risk including dozens in Northern Ireland.
The company, which employs around 5,300 people, is low on cash and is filing the notice because it will give the business protection from its creditors for two weeks.
Sources claim the notice will give Poundworld - which has 12 shops in Northern Ireland - time to structure a deal, which could be undertaken through a pre-pack administration, with private equity firm R Capital, former owner of Little Chef.
The administration will be handled by Poundworld's advisers Deloitte.
Poundworld, which is owned by TPG Captial, had previously rejected offers to sell through a pre-pack but all options are now being considered.
Management has so far failed to sell the retailer as a solvent business, after turnaround specialists Alteri Investors walked away from sales talks this week.
Deloitte has been preparing contingency plans for an administration in the event of talks collapsing.
The news comes on the same day that House of Fraser announced that it is to axe 31 stores, putting 6,000 jobs at risk.
Retail NI chief executive Glyn Roberts said: “While it is clearly good news for Belfast City Centre and Victoria Square that the Belfast House of Fraser store is to remain open, the company does face some significant challenges ahead after closing 31 stores across the UK”
“Added to the Poundworld situation, this has been a grim day for the UK's retail sector, which is going through a period of immense change which is sadly resulting in many businesses failing”
Poundworld's losses widened in 2016-17 to £17.1 million, from £5.4 million 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.
Several retailers have shown significant financial distress this year, with both Maplin and Toys R Us disappearing from the high street.