Poundworld enters administration
Inside Retail reported that UK-based discount retailer, Poundworld has officially entered administration after twice failing to secure a buyer to purchase the struggling business. The fate of the retailer’s 5,000 employees will remain up in the air until a buyer is found. As reported in late May, Poundworld’s problems stem from a mix of high rent, product cost inflation, decreasing footfall, weaker consumer confidence in the UK and stiffer competition. It’s a perfect storm for discounters, with insurers also withdrawing credit from The Original Factory Shop this month after the business reported falling profits. Based on all the contributing factors, we think the vertical will remain under pressure for the foreseeable future.