Poundworld could be facing administration as its private equity owner struggles to find a rescue buyer and is not expected to continue funding the chain, putting 5,000 jobs at risk.
With the company’s next rent payment due soon, Poundland’s owner, TPG Capital, is not planning to inject more funds into the group, according to sources. Despite having 355 stores, no serious buyers have approached TPG Capital and administration could be looming.
US-based TPG owns Poundworld, which is connected to Discount Wholesale, a retailer and wholesaler of imported goods. Chris Edwards, the founder of the Poundworld and briefly an employee of Pound Stretcher, is attempting to lure backer to rescue Poundland, but is running out of time with the next rent payment date due 24 June and facing administration.
Poundland could follow in the footsteps of another TPG company, Prezzo, and launch a company voluntary agreement to cut rents and close stores to reduce costs.
It is thought that the cut-price retailer’s troubles are linked to rising costs, increased online shopping, a weaker pound and the squeeze on consumer spending, as many retailers and restaurants have closed stores and exited high-street outlets.
Late last year, it was reported that that accounting irregularities caused a 63% drop in Poundland shares, which represents more trouble for cut-price retailers.
Recently, Poundworld looked as though it could have been saved by Alteri Investors, which specialises in helping businesses in challenging retail situations.
After advanced talks with TPG, Alteri Investors opted out of the deal.