Poundworld falls into administration, putting 5,000 jobs at risk

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Poundworld is expected to crash into administration this morning after last-ditch sales talks broke down, putting 5,100 jobs at risk, the Press Association understands.

The announcement comes after both Toys R Us and Maplin fell into administration earlier this year.

Clare Boardman, joint administrator at Deloitte, said: "The retail trading environment in the United Kingdom remains extremely challenging and Poundworld has been seeding to address this through a restructure of its business".

The company employs about 5100 people at 335 stores nationwide.

However, Deloitte said that the business would continue trading, with no store closures or redundancies planned at this time.

'Unfortunately, this has not been possible.

It sells 8,000 products, mostly priced at £1, including groceries, toiletries, household cleaning goods and candies, but has been hit rising costs and stiff competition.

A TPG spokesman said: 'This was a hard decision for every party involved.

Deloitte added that they believe a buyer could still be found for the business, or at least part of it.

Clare Boardman, joint administrator, comments: "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". But a deal could not be struck.

There have also been casualties among independent businesses, including Hitchin town centre's Hawkins and Kenmore Interiors department stores.

The stores suffered a major rise in multi-million pound losses a year ago - rising from £5.4m to £17.1m in 2016/17.

The company is seeking landlord approval for the restructuring plan, which is a form of insolvency known as a Company Voluntary Agreement (CVA).

Deloitte said Poundworld had suffered from high product cost inflation, decreasing footfall, weaker consumer confidence and an increasingly competitive discount retail market.

Other retailers undertaking CVAs in a bid to keep trading include New Look, Mothercare and Carpetright.

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