Jobs at risk in Wigan at troubled Poundworld stores

Dozens of jobs in Wigan are under threat as a leading discount store operator is set to call in administrators.

Friday, 8th June 2018, 1:32 pm
Updated Tuesday, 19th June 2018, 11:28 am
Poundworld has two stores in Wigan

Bosses at Poundworld, which has stores in Standishgate and on Robin Retail Park, are understood to be making the move.

The retailer's branch in Leigh's Spinning Gate shopping centre closed down in March.

An estimated 5,300 positions nationally would be placed in jeopardy if the retailer is in difficulty.

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The reasons are understood to be because the chain is low on cash and is filing the notice because it will give the business protection from its creditors for two weeks.

The Press Association has been told by sources that the notice will give Poundworld time to structure a deal, which could be undertaken through a pre-pack administration, with private equity firm R Capital, former owner of Little Chef.

The administration will be handled by Poundworld's advisers Deloitte.

Poundworld, which is owned by TPG Capital, had previously rejected offers to sell through a pre-pack but all options are now being considered.

Management has so far failed to sell the retailer as a solvent business, after turnaround specialists Alteri Investors walked away from sales talks this week.

Deloitte has been preparing contingency plans for an administration in the event of talks collapsing.

Poundworld's losses widened in 2016-17 to £17.1m, from £5.4m of losses the year before.

The retailer was hit with a £5.7m charge for onerous leases, a provision retailers make when the cost of a lease is no longer covered by the income of the store.

Several retailers have shown significant financial distress this year, with both Maplin and Toys R Us disappearing from the high street.