Poundworld to appoint administrators putting 5300 jobs at risk

  • Poundworld to appoint administrators putting 5300 jobs at risk

Poundworld to appoint administrators putting 5300 jobs at risk

Discount retailer Poundworld is set to launch proceedings to appoint administrators, according to the Press Association. However with no deal done by Monday's deadline, the company is using the moratorium provided by the court filing to try and put together an eleventh hour deal ahead of its next rent payment date, which is 24 June.

The company's management say they are in talks with other potential buyers, and it is thought that Poundworld's founder, Chris Edwards, might take on the business.

Flacks, a U.S. firm which was linked to a bid at the weekend, is not regarded as a serious bidder for the UK-based bargains chain.

However, the retailer's advisers at Deloitte are understood to be preparing contingency plans for an administration should talks collapse.

The Press Association said Poundworld has so far rejected offers to acquire the business through a pre-pack deal.

The news compounds another bleak day for the retail sector with House of Fraser confirming plans earlier on Thursday to axe 6,000 jobs and close just over half its 59 stores.

TPG had already been considering a restructure which would lead to 100 of 355 outlets being shut, putting 1,500 jobs at risk.

The grim climate on the high street, which has claimed casualties such as Maplin and Toys R Us UK this year, has paved the way for a string of chains to attempt restructurings through a mechanism called a Company Voluntary Arrangement (CVA) - a legally binding agreement with creditors.

Poundworld, which also trades under the Bargain Buys brand name, serves two million customers a week.

The spokesperson for Poundworld said the company was unable to comment on speculation regarding the ongoing sales process.