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Gloucestershire Business News

Poundworld could close about 100 stores

Discount retailer Poundworld is looking to close about 100 of its 355 stores, putting up to 1,500 jobs at risk, the BBC has reported.

Poundworld, which has a store in Eastgate Street, Gloucester, is considering the move under an insolvency process called a Company Voluntary Arrangement (CVA).

Like many retailers, Poundworld has been hit by falling consumer confidence, rising overheads and the weaker pound.

CVAs have become popular among retailers because they allow firms to offload underperforming stores and reduce rents while avoiding administration.

Poundworld is owned by private equity firm TPG Capital, which also controls the restaurant chain Prezzo whose landlords agreed to a CVA last month. Prezzo is also closing 94 branches.

The BBC says Poundworld is expected to announce the terms of the CVA next month. As well as closing stores it would try to get agreement from landlords to reduce rents.

The chain imports much of its stock and is having to pay more for it because of the fall in the value of the pound.

Poundworld, which was formed in 2004, employs about 5,500 staff and has its headquarters in West Yorkshire.

A number of other retailers have chosen to go through a CVA recently, including New Look and Carpetright, while last week House of Fraser said it was considering this measure as part of a number of options.

Earlier this year, both Toys R Us UK and electronics chain Maplin went into administration.

Picture caption: The Poundworld store in Eastgate Street, Gloucester. Picture credit: Imagery ©2018 Google maps, Map data ©2018 Google

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