London (AFP) – Troubled UK budget chain Poundworld on Monday fell into adminstration, putting it closer to collapse with the loss of up to 5,100 jobs unless a last-ditch buyer can be found.
Poundworld, which is battling against discounting in supermarkets, has appointed financial group Deloitte to help it find a buyer and stave off store closures and job losses.
The announcement comes just days after House of Fraser, the Chinese-owned department store chain, said it is closing more than half its shops across Britain and Ireland, risking the loss of 6,000 jobs.
British retailers with large amounts of stores are suffering also from fierce online competition from the likes of Amazon.
The UK is also experiencing weak household spending generally amid Brexit uncertainty.
Speaking of Poundworld’s move, Deloitte administrator Clare Boardman said that “the retail trading environment in the UK remains extremely challenging and Poundworld has been seeking to address this through a restructure of its business.
“Unfortunately, this has not been possible. 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,” she added in a statement.
Operating out of 335 stores, Poundworld sells items including household cleaning items and confectionery mostly priced at £1 ($1.3, 1.1 euros).
“Like many (UK) high street retailers, Poundworld has suffered from high product cost inflation, decreasing footfall, weaker consumer confidence and an increasingly competitive discount retail market,” Deloitte said.
The company will continue to trade while a buyer is sought, and there will be no store closures or redundancies at this time, Deloitte added.
Poundworld, which is owned by US private equity group TPG Capital, saw annual losses widen in 2016/2017 to £17.1 million from £5.4 million in the group’s previous financial year.
Last month, British food-to-clothing retailer Marks and Spencer said it would shut more than 100 UK stores as it looks to shift at least one third of overall sales online.
Emphasising the fast-growing shift to online among British consumers, Amazon last week said it plans 2,500 new UK jobs by the end of the year.