Published: Mon, June 11, 2018
Markets | By Otis Pena

Poundworld reported to be considering the appointment of administrators

Poundworld reported to be considering the appointment of administrators

Poundworld filed a notice of intention to appoint administrators last Thursday and this has given it 10 days to continue talks aimed at negotiating a sale, the spokesperson confirmed.

Poundworld, which has stores in Forster Square, Darley Street, Ivegate and Woodhall Retail Park, employs around 5,300 people in the United Kingdom, is low on cash and is filing the notice because it will give the business protection from its creditors for two weeks.

The filing gives Poundworld protection as it seeks to secure a deal, which would lead to store closures and an administration would be handled by Deloitte.

Other bidders are queuing up however with founder Chris Edwards rumoured to be considering re-acquiring the 355-store chain.

According to reports, Deloitte, which has been responsible for handling the sale of the chain, has also been putting together plans for an administration in case TPG fails to find the right buyer in the near future.

Poundworld's losses widened in 2016-17 to £17.1 million, from £5.4m of losses the year before.

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Management has so far failed to sell the retailer as a solvent business, after turnaround specialists Alteri Investors walked away from discussions this week.

Poundworld was acquired by TPG Capital for £150m in 2015 but it has struggled in the wake of the Brexit blow to sterling that pushed up the cost of imported goods.

The company's recent travails were sparked when the United States private-equity company TPG Capital put the company up for sale in May.

Restaurant chains including Byron, Carluccios and Prezzo - which is also owned by TPG - have also sought approval from creditors to shut scores of outlets amid similarly tough conditions in the United Kingdom casual dining sector.

Retailers Maplins, Toys "R" Us, Mothercare, Carpetright, plus a string of restaurant chains, have hit the headlines this year because of trading trouble.

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