DISCOUNT retailer Poundworld is looking at closing about 100 of its 355 stores, putting up to 1,500 jobs at risk.
It leaves a dark cloud hanging over the future of the company’s store in the Richmond Centre in Derry.
This is one of 12 stores Poundland has in the North of Ireland with all staff waiting tentatively on news on which stores will be soon be axed as the company struggles with debtss.
If the shutters are pulled own Poundworld in Derry, it is another blow to the economy in the city.
Recently Toys ‘R’ Us and Carpetright both shut up shop in Derry, leaving staff heading to the dole office.
Poundworld is considering the move to close a third of its stores under an insolvency process called a Company Voluntary Arrangement (CVA).
Like many retailers Poundworld has been hit by falling consumer confidence, rising overheads and the weaker pound.
Poundworld is owned by private equity firm TPG Capital, which also controls the restaurant chain Prezzo whose landlords agreed to a CVA last month. Prezzo is also closing 94 branches.
Poundworld is expected to announce the terms of the CVA next month.
As well as closing stores it would try to get agreement from landlords to reduce rents.
The chain imports a lot of its stock and is having to pay more for it because of the fall in the value of the pound.
Poundworld employs about 5,500 staff and was formed in 2004.
Richard Lim, chief executive of Retail Economics, said news of Poundworld’s troubles “signals just how much distress bricks and mortar retailers are under”.
“The toxic mix of rising costs, softer consumer demand and the acceleration of seismic structural shifts are pushing many business models to breaking point.
“Stuck with too many stores, inflexible leases and spiraling operating costs, the business is in desperate need of restructuring.”
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