Poundworld to shut more 80 stores resulting in 1,024 more job losses according to Deloitte, the company’s administrators. This means that 105 (31%) of Poundworld’s 335 stores are now set for closure. The firm went into administration in June because of its inability to cope with rising costs, falling customers, and increased competition.
Poundworld Stores Close Partially Due to Online Shopping
This may be a sign of things to come as many stores face closure due largely to the massive increase in online shopping. The company is currently trying to sell what remains of the business. This will be difficult for the same reasons why the firm collapsed. Administrator Clare Boardman stated that “it has not been possible to sell the business as a whole.”
They had two potential deals in the pipeline: one from founder Chris Edwards who offered to purchase around half of Poundworld store, and the other from Alteri investors, a firm whose specialty is buying up failing retailers. They import most of its stock from China and the Far East. Like most importing companies, Poundworld was hit by the drop in the value of sterling after the 2016 Brexit vote.
Poundland and Poundstretcher Competition
Poundworld’s roots lie in a market stall in Wakefield, West Yorkshire. This was developed by Chris Edwards who sold the business in n2015 to TPG, a US private equity company (owner of Prezzo). The company’s rivals, Poundland and Poundstretcher were also partially responsible for the demise of Poundworld. Many believe that these two will not be far behind!
Fall of Sterling a Significant Factor
The fall of sterling against the US dollar is also a significant factor. After an apparent recovery between July 2017 and January 2018, it has now taken another dip. The ‘Pound’ stores have been hit by rising prices. This is always an issue for stores whose prices are part of their brand name. Increased costs have had to be absorbed by the company, and this can only be viable for a short period of time. It seems that time is up for the pound stores – Poundworld stores being a prime example.