Poundworld Retail Ltd., a U.K. discount retail chain, has appointed administrators, a move similar to a bankruptcy filing in the U.S., after a bid to sell the business reportedly collapsed.
In a June 11 statement emailed to S&P Global Market Intelligence, Deloitte said it has named two of its restructuring partners, Daniel Butters and Clare Boardman, as joint administrators for Poundworld. Similar to a dollar store in the U.S., Poundworld offers a range of groceries, toiletries, household cleaning and confectionery items mostly priced at £1.
The move was confirmed by owner and private equity player TPG Capital Management LP. "We invested in Poundworld because of our belief in how the company serves its customers and the strength of its employees," a TPG spokesperson said in an email. "Despite investing resources to strengthen the business, the decline in U.K. retail and changing consumer behavior affected Poundworld significantly."
Poundworld, which operates 335 stores and employs 5,100 staff, is the latest victim in a growing list of casualties on the U.K. high street.
On June 7, House of Fraser Group Ltd. blamed the changing nature of the U.K. retail market, including the increasing shift toward e-commerce rather than buying in-store, uncertainty surrounding the country's departure in 2019 from the European Union and cost pressures in announcing the closure of 31 of its 59 stores with the loss of 6,000 jobs.
Among the stores that have disappeared from the high street in 2017 are Toys R Us, Maplins and Conviviality PLC, operator of beers, wines and spirits retailers such as Bargain Booze and Wine Rack.
Poundworld, like many high street stores, had suffered from product cost inflation, declining foot traffic, weak consumer confidence and an increasingly competitive discount retail market, Deloitte said.
According to a report from the BBC, Poundworld was forced to appoint administrators after talks over a potential sale broke down.
However, the joint administrators indicated a sale of Poundworld remained a possibility. "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," Clare Boardman, one of the administrators, was quoted as saying.
Deloitte noted that the company would continue to trade and that there would be no redundancies or store closures for now.
