Business

Up to 200 local jobs at risk after Poundworld plunges into administration

The Poundworld store on Donegall Square in Belfast city centre
Gareth McKeown and PA

UP to 200 jobs could be at risk in Northern Ireland after Poundworld plunged into administration yesterday.

The budget retailer has become the latest retail casualty on the UK high street, with 5,100 jobs now in jeopardy if all 335 stores close their doors.

Poundworld, which is owned by TPG Capital, has 12 stores in the north at Newtownabbey, Newtownards, Omagh, Armagh, Craigavon, Cookstown, Bangor, Derry and four in Belfast.

The beleaguered retailer has appointed Deloitte to handle an administration after last-ditch rescue talks with R Capital broke down over the weekend. 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 business has been hit by falling footfall, alongside rising costs and weak consumer confidence.

"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."

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 worrying news at Poundworld is another blow for the Northern Ireland retail sector, which has already suffered from the collapse of both Toys R Us and Maplin earlier this year. Last week House of Fraser detailed its plans to shut 31 stores, affecting around 6,000 jobs, both its Belfast outlet at Victoria Square is not one of those affected.

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

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

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