Poundworld has collapsed into administration, putting more than 5,000 jobs at risk, after rescue talks failed over the weekend.
It is the latest blow for Britain’s struggling high streets, where a string of retailers and restaurants have shrunk or collapsed due to rising costs and a consumer spending squeeze.
Poundworld, which has 335 shops, filed a notice of intention to appoint an administrator last Thursday, giving it temporary protection from its creditors.
January
Jamie’s Italian says it will close 12 of its 37 UK branches as part of a rescue deal with its creditors
Tesco puts up to 1,700 jobs at risk in a management shake-up
Marks & Spencer announces it is is closing its London distribution centre, putting 380 jobs at risk
Sainsbury’s says it will strip out thousands of management jobs from its stores
Byron says it will close up to 20 sites as part of a rescue plan
East fashion chain closes its 50 stores and 314 staff lose their jobs after it is unable to find a buyer
February
Morrisons says it will axe 1,500 middle-management roles in stores as part of plans to cut costs
Debenhams announces it will cut 320 jobs across the UK – one in four of its store managers
Warren Evans goes into administration, putting 287 jobs at risk
Jamie Oliver’s Barbecoa restaurants go into administration, with 80 staff losing jobs
Toys R Us goes into administration, putting 3,000 jobs at risk
Maplin also collapses, threatening 2,500 jobs
March
New Look says it is considering closing as many as 60 stores, putting up to 980 jobs at risk
Prezzo announces it will close 94 restaurants with loss of about 500 jobs
April
Littlewoods owner Shop Direct says it will close three warehouses in Greater Manchester, putting nearly 2,000 jobs at risk
Carpetright confirms plans to close 92 stores, with the potential loss of 300 jobs
May
Jacques Vert and Windsmoor owner Calvetron Brands goes into administration, putting 1,000 jobs at risk
Tesco Direct clothing and homewares website to close, putting 500 jobs at risk
Marks & Spencer reveals plans to close a total of 100 shops by 2022, putting more than 1,500 jobs at risk
Carphone Warehouse says it will shut 92 stores amid a profits warning
Carluccio’s unveils plan to shut 34 restaurants, putting 500 jobs at risk
June
Mothercare says it is to close about 50 of its 137 stores by June next year with the potential loss of about 800 jobs
House of Fraser announces the closure of 31 of its 59 department stores, putting up to 6,000 jobs at risk
Poundworld falls into administration, putting more than 5,000 jobs at risk
Deloitte, which was appointed as administrator on Friday, said Poundworld would trade as usual while it sought a buyer for all or part of the business, adding that no redundancies or store closures were planned.
At Poundworld in Hyde, in Tameside, Greater Manchester, shoppers were dismayed to hear of the chain’s demise.
“What a shame,” said Sylvia Andrew, 61, who had just paid a pound for a dummy security camera to protect her hen house. “If someone comes to nick my chickens they’re not to know it’s not real. If you put two AA batteries in a light flashes,” she said.
Currently signed off sick, she counts every penny: “At Poundworld you get two Pears soaps for £1. It’s £1.50 at the supermarket,” she said.
Joanne Betts, 48, a carer, had just bought four packets of glow sticks for £1 each and some bin bags. She said: “I didn’t think a place like this would close. I’m in every week buying things I don’t need.”
Inside, shoppers could spend a pound on anything from flip-flops to rat poison or packets of Aunt Bessie’s Yorkshire pudding mix.
One of Poundworld’s problems may have been its competitors. Next door to its Hyde store is Bodyworks, a discount cosmetics outlet. Next to that is B&M Bargains, a northern chain that recently announced plans to open 45 stores in southern England.
Add to that the Quality Save in the precinct, the Iceland in the shopping centre carpark and a branch of Jack Fulton, the Yorkshire frozen food retaile , and it’s clear bargain hunters are spoiled for choice.
Deloitte said Poundworld had struggled in an increasingly competitive market for discount goods, but also blamed “high product-cost inflation, decreasing footfall [and] weaker consumer confidence”.
Two potential rescue buyouts have fallen through, with the private equity firms Rcapital and Alteri Partners both walking away after talks with Poundworld’s owners, TPG Capital, a US private equity firm.
Chris Edwards, who founded the business in Wakefield, Yorkshire, in 1974 before selling it to TPG for £150m, is also thought to have been interested in buying back the business.
Deloitte’s joint administrator, Clare Boardman, 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.
A TPG spokesperson 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.”
The retail analyst Nick Bubb said the relative health of Poundworld’s rival Poundland, despite a crowded marketplace for discount retailers, indicated the business had been poorly managed.
“Poundland is doing OK, despite the general pressure on the high street pound chains from the growth of B&M and Home Bargains in food and toiletries and the growth of Aldi and Lidl,” he said.
“So it must be down to management, and I suspect Poundworld lost a lot of momentum when the founder, Chris Edwards, stepped back from the business.”
The demise of Poundworld follows the collapse into administration this year of the electronics firm Maplin and Toys R Us.
The high street has also been rocked by a succession of retailers and restaurant chains announcing plans to shut stores amid tougher trading conditions.
House of Fraser announced plans last week to close 31 stores, putting a further 6,000 jobs at risk. Mothercare, New Look and Carpetright are closing dozens of outlets after creditors approved company voluntary arrangements (CVAs), insolvency procedures that enable them to reduce rents and shut shops.
Restaurants including Prezzo, the burger chain Byron and Jamie’s Italian have also closed outlets using the process.
Poundworld’s problems surfaced in April when its owner was said to be considering launching a CVA, affecting about 100 stores.
