Poundworld on brink of collapse as last-ditch talks fail

A discount store has entered administration, putting thousands of jobs at risk across the UK.

It comes after a last-gasp rescue deal between the chain's owner, TPG Capital, and private equity firm Rcapital fell apart over the weekend.

Deloitte said Poundworld would trade as usual while it seeks a buyer for all or part of the business, adding that no redundancies or store closures are yet planned.

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

Poundworld, which has a chain of 335 shops, filed a notice of intention to appoint an administrator last Thursday, giving it temporary protection from its creditors.

It is the biggest chain by number of employees this year to fall into insolvency, just over three months after the same fate befell Maplin and Toys R Us.

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Many of these have been struck this year as retailers have struggled with surging costs, rising business rates, competition from online rivals and a slowdown in consumer spending.

Other retailers are expected to pick off parts of its 355-strong store estate, while a slimmed-down Poundworld operation may also be viable.

Deloitte's joint administrator, Clare Boardman, said: "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. Unfortunately, this has not been possible", Clare Boardman, joint administrator at Deloitte, said today.

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.

Poundworld has been losing money for the past two years.

Others undertaking CVAs include New Look, Mothercare and Carpetrights.

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