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UK discount retailer Poundworld put up for sale

RBR Staff Writer Published 14 May 2018

American equity investor TPG has put the loss-making discount chain store Poundworld up for sale.

Poundworld, which was launched in 2004, is based in West Yorkshire. It owns brands such as Bargain Buys brand.

It claims to be serving more than 2 million customers every week through its 355 shops. In 2015, TPG acquired majority stake in Poundworld.

Recently, the company had sought approval from its creditors to close up to 100 of its stores, as part of company voluntary arrangement (CVA), putting hundreds of jobs at risk.

The news about Poundworld’s owner TPG trying to sell the chain store was reported by Sky News.

TPG is said to have dropped a rescue plan to bring the loss-making firm back from the brink and has chosen to sell it instead.

The decision to seek buyer for the entire business – with a deal being sought by the end of the month could mean that the fate of the rescue plan, known as CVA, is now in doubt.

Failure to strike a solvent deal within weeks could result the loss-making retailer face administration. In March, Poundworld reported £17.1m in pre-tax loss for this year.

It was reported that TPG is not likely to fund Poundworld through the CVA process, which it stated would require an estimated £20m of new financing.

Sky News also reported that the likely bidders for Poundworld could include firms such as Alteri Investors and Endless and other high street players such as B&M.

Poundworld’s rival Poundland, which was recently in news due to an accounting scandal at its parent company Steinhoff International, is also expected to buy some stores.

Poundland’s sales during the Christmas period have increased by 6% and yet the company has also faced some challenges.

In the recent times, several retail companies including Toys R US, Calvetron, the parent company of Jacques Vert, Carpetright, and several others have fallen into administration, threatening thousands of jobs.

Image: Poundworld’s store at Fulham, London. Photo: Courtesy of Edwardx/Wikipedia.org.