Britain's Discount Retailer Poundworld Goes Into Administration

Britain's Discount Retailer Poundworld Goes Into Administration

Tuesday, 12 June, 2018 - 05:30
A woman walks into a branch of Poundworld in Stockport, near Manchester, Britain June 11, 2018. REUTERS/Phil Noble
London- Asharq Al Awsat
British discount retailer Poundworld has fallen into administration, a form of creditor protection, administrator Deloitte said on Monday, putting 5,100 jobs at risk unless a last-ditch buyer can be found.

Private equity group TPG Capital, Poundworld’s majority owner, put the discount retailer up for sale last month but has failed to find a buyer.

Poundworld, trading from 335 stores across the country, 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.

Poundworld sells items including household cleaning items and confectionery mostly priced at £1 ($1.3).

"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.

Emphasizing 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.

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