Thousands of shop staff faced the axe yesterday following the collapse of Poundworld, one of Britain’s largest discount chains.
On another bleak day for the High Street, the loss-making store was the latest to crash into administration, putting 5,100 jobs at risk.
The company, which has 335 shops and sells everything from flip-flops to deodorant and baked beans, racked up losses of £17.1million last year.
Poundworld has about 350 stores in the UK, including this one pictured in Stockport today
More than 30,000 High Street jobs have been lost or left hanging in the balance this year as a string of shops and restaurants struggle to survive.
The crisis in the industry has led to the collapse of household names such as Toys R Us and Maplin as well as job losses at Marks & Spencer, Mothercare and Debenhams.
House of Fraser outlined plans last week to shut 31 stores, putting 6,000 jobs on the line, as it fights to stay afloat.
A string of restaurant chains including Prezzo, Jamie’s Italian and Carluccio’s have also shut sites and axed staff.
Experts warned last night that worse was to come as traditional shops faced an onslaught from online rivals such as Amazon and powerful discounters including Aldi and Lidl.
Richard Hyman, an independent retail analyst, said: ‘The big picture is there are too many retailers with too many stores for the market to feed.’
House of Frase announced the closure of half its shops – putting at risk 6,000 jobs
A report by the Centre for Retail Research suggested that 31,000 stores would close and 552,500 High Street jobs disappear between 2017 and 2022.
Its director, Professor Joshua Bamfield, said: ‘2018 is likely to be the worst for retailers since 2008 at the height of the recession as retailers abandon stores and loyal employees as well as cutting costs to compete with Amazon and Aldi.
‘Retailers’ problems are caused by a decade of weak growth, new consumer behaviour – buying online but also spending more on experiences, travel and eating out – higher labour costs, uneconomic rents and business rates.’
Poundworld, which was set up in Wakefield, West Yorkshire, in 1974 by Chris Edwards and his son, also Chris, has 335 stores and 5,100 staff and serves two million customers a week.
Toys R Us went into administration in February after failing to find a third-party buyer
It sells 8,000 products, mostly priced at £1, including groceries, toiletries, household cleaning goods and sweets, but has been hit rising costs and stiff competition.
The firm’s main rivals include Poundland and Poundstretcher as well as internet retailers.
Its owner, the American private equity firm TPG Capital, which bought Poundworld for £150million in 2015, has tried to find a buyer for the company.
But last-ditch rescue talks with the London investment group R Capital collapsed over the weekend.
Deloitte, which was appointed yesterday to handle its administration, said it would continue looking for a buyer, adding: ‘Poundworld will continue to trade while a buyer for all or part of the business is sought. There are no redundancies or store closures at this time.’
The store’s losses widened in 2016-17. Pictured: A woman walks into a Stockport branch today
But it is feared that store closures and job losses will follow – even if a buyer is found.
Clare Boardman, joint administrator at Deloitte, said: ‘The retail trading environment remains extremely challenging and Poundworld has been seeking to address this through a restructure. Unfortunately, this has not been possible.’
A TPG spokesman said: ‘This was a difficult decision for every party involved. We invested in Poundworld because of our belief in how the company serves its customers and the strength of its employees.’
Julie Palmer, from the insolvency practice Begbies Traynor, said: ‘Sadly, Poundworld looks set to be the next casualty of the UK’s declining High Street, struggling to make ends meet in an increasingly crowded marketplace.
‘It seems Poundworld has stretched itself too thin.
‘Even if Poundworld is lucky enough to be rescued by a white knight, it’s still likely that a large proportion of its store portfolio would close for good, meaning yet more empty retail space gathering dust across the High Street.’