Poundworld is planning to close 117 of its 355 stores amid its company voluntary arrangement (CVA) proposals, it has been revealed.
According to The Grocer the embattled discount retailer, which was revealed to be planning a CVA last month, will close the stores by August 31 this year and rent reductions will be sought on the remaining 231.
In a document laying out the details of its CVA, Poundworld revealed it had been hammered by the loss of its credit insurance.
The insurance is designed to protect suppliers should a company go bust before there are paid for their goods. It is often withdrawn or rates are severely increased when retailers show signs of financial struggle, and many suppliers demand payments immediately.
Not only did this mean Poundworld faced a £6 million bill to its suppliers, but also led to a difficult Christmas period, as it suffered from stock availability issues.
The Brexit-hit sterling, rising overheads including business rates and wages, as well as falling consumer spend were all also cited as difficulties.
It will now seek an additional £15 million in funding Santander once the CVA is completed to drive its turnaround effort.
This is on top of an emergency cash injection of £20 million from its owner TPG in February, which it said it had already “utilised”.
TPG, which also owns restaurant chain Prezzo which entered a CVA earlier this year, is reportedly seeking a buyer for the chain as it drives the turnaround effort.
Poundworld declined comment at this stage.