Poundworld has entered administration today, putting more than 5,000 jobs at risk.
The bargain shop has a store in Canterbury High Street and could shut imminently, signalling another blow to the city’s retail landscape.
Administrators Deloittes will be trying to find a buyer for parts of the business outside of administration. Other retailers may want to buy some of the company’s most attractive stores.
The company’s losses rose to £17 million in the year 2016-17.
Administrators say that Poundworld had been suffering from “high product cost inflation, decreasing footfall, weaker consumer confidence and an increasingly competitive discount retail market”.
In May, it was put up for sale by its owner TPG Capital, a US private equity firm. But no buyer was found.
Last ditch attempts to rescue the firm, which traces its roots back to a market stall in Yorkshire in the 1970s, have failed.
It will be the biggest chain to collapse since the demise of Maplin and Toys ‘R’ Us UK.
Poundworld has had a presence in Canterbury since 2014. It also has stores in Chatham, Strood, Dartford and Gravesend.
The audit and consulting firm Deloitte has been co-ordinating efforts to find a workable deal for the business and is expected to oversee the administration of Poundworld.
Despite the gloomy prognosis, there are hopes that parts of the company may be saved and jobs retained.
Mark Kleinman, the City Editor at Sky News, said: “There remains some optimism that a proportion of the chain’s 5,300 staff will avoid losing their jobs if buyers can be found for parts of Poundworld’s business during the administration process.
“Other retailers are expected to pick off parts of its 355-strong estate, while a slimmed-down Poundworld operation may also be viable.
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“Nevertheless, this news will be the latest in a grim tsunami of developments for Britain’s embattled high street.”
Retail analyst Richard Hyman added: “The bigger picture is there are too many retailers with too many stores for the market to feed.”
The news comes as the city lost its Chimichanga Tex-Mex restaurant while numerous other major chains including Mothercare and Marks and Spencer face an uncertain immediate future.