The collapse of Poundworld will see dozens of shops in towns across the North West stand empty in the latest blow to the high street, although store closures could open up prime space in some regional centres, according to retail agents.
The discount retailer fell into administration yesterday after last-ditch attempts to stave off bankruptcy over the weekend failed.
Poundworld currently has dozens of stores across the North West which could now face closure. In Liverpool shops include Kirkby, Bell Vale, Church Street, Bootle, Birkenhead and Speke; two stores in Chester include The Forum shopping centre and Foregate Street.
In Manchester the firm has shops in the Fort shopping park, the Stretford Arndale centre, Poundworld Plus in Harpurhey, Hyde, Wythenshawe, Middleton, Salford, and Denton, while in the city centre, there are shops on Parker Street and Poundworld Express in the Arndale centre.
The discount chain also has stores in Wrexham; Preston’s Deepdale Shopping Park; Warrington Bargain Buys; St Helens, Wigan; and Stockport.
Nick McAllester, director of retail agency at real estate advisors Metis said the collapse was a blow to regional high streets: “It’s obviously disappointing but symptomatic of where the high street is at the moment. To see a discounter, which is a sector that has been underpinning demand for over 10 years especially in smaller markets, feeling the pinch is significant.
“They [Poundworld] sit in a sector which is extremely competitive, and that’s part of the problem. The element of competition across all sectors that you have to be pretty lean to survive at the moment.”
The collapse into administration is a swift fall from grace for the retailer which was only recently stating a desire to continue opening stores for the next three years, adding to the 355 UK-wide outlets it currently operates.
The estate expansion plans outlined in its 2017 annual report filed in January stated that Poundworld aimed to “open a substantial number of new stores each year at a time when competition for retail space remains keen”.
However according to retail agent Tim Kenney, partner at Kenneymoore, Poundworld was competing in an already crowded marketplace: “Historically the emergence of discount retailers fluctuates and they emerge when market conditions work for heavy discounting. If you think who is in their sector you have B&M, Poundland, Poundworld and more. There are a lot of players competing for the same space.”
The Company Voluntary Arrangement which was launched in April would have trimmed the store estate by 100, and sought rent reductions on the remaining 250 outlets. However the action failed to save the business after buyers RCapital and Alteri Investors pulled out.
Poundworld founder Chris Edwards has said he may buy up a large swathe of stores, blaming the losses from the business on to “bad management”.
According to Kenney, the stores are likely to be looked at on a case by case basis if a buyer cannot be reached, however the Chester outlet occupies prime space: “The Poundland sits next to the M&S and also near Primark and is a good shop, there was a bit of fury when Poundworld took it on as it was deemed a prime unit.”