Poundworld crash leaves creditors £226m out of pocket

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Poundland creditors

Poundworld creditors were owed nearly £230 million when the discount retailer collapsed into administration, according to reports.

According to The Sunday Times, documents circulated by administrators showed that Poundworld had £22.8 million of assets, which were taken up by preferential creditors and floating-charge holders.

However, there was a £226.5 million shortfall for all other creditors, which included local councils to food suppliers.

The retail chain collapsed in June and last month it was confirmed that Poundworld would leave the UK retail industry completely after administrators announced the retailer’s final set of store closures.

Poundworld’s collapse came three years after private equity firm TPG acquired it from founder Chris Edwards in a £150 million deal.

TPG expanded the chain rapidly against increased competition and a sharp rise in costs amid the devalued pound sterling in the wake of the Brexit vote.

Poundworld’s departure from the high street means more than 5000 employees will lose their jobs.

Deloitte had announced tranches of store closures during the administration period before it conceded that its search for a suitable new buyer for the whole business was unsuccessful.

A rescue bid from Edwards was rejected by Deloitte, which could have seen 180 Poundworld stores and 3000 jobs saved.

It is understood that Edward’s offer was below what Deloitte considered to be a “credible bid” for the discount retailer.

Edwards, who founded Poundworld in 1974, was critical of how his offer was received by Deloitte, and said he was “shocked and surprised” that he was turned away.

The founder of rival Poundland, Steven Smith, had also been linked to a bid to salvage part of Poundworld out of administration.

TPG declined to comment.

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