Poundworld founder Chris Edwards eyes rescue bid

Edwards, who set up the value retailer in 1974 and sold it to TPG Capital for £150m in 2015, told Retail Week he is “very interested” in putting in a bid for the troubled retailer.

The discount chain was put up for sale by its US owner earlier this year as it grapples with turbulent trading on the high street. 

Edwards revealed he plans to start due diligence on Poundworld imminently and would “absolutely” table a formal offer to buy it if he felt he could turn the business around.

However, sources familiar with the situation told Retail Week that Edwards would face competition from “multiple potential suitors, including both trade and financial buyers” who have already lodged their interest in snapping up Poundworld.

Edwards said he would also be open to re-joining the value retailer in a management or advisory role, should another buyer be secured.

Retail Week understands that TPG is keen to launch a CVA and find new owners for Poundworld by the end of the month.

It would represent a similar move to that being proposed by House of Fraser and potential new owner C.Banner. The Hamleys owner has agreed to acquire a majority stake in the department store chain on the proviso that its store estate is restructured through a CVA. 

It is thought that Poundworld would secure a £15m credit facility from Santander on condition of a CVA proposal, which would involve the closure of around 100 stores and reduced rents on 109 others.

Retail Week understands that the value retailer is expected to plunge to an adjusted EBITDA loss of more than £14m in its 2017/18 financial year.

Poundworld, which has 355 shops and 5,500 employees, was revealed to be plotting a CVA which could result in the loss of up to 1,500 jobs last month.

TPG Capital injected £20m into the business at the beginning of the year in a bid to transform its flagging fortunes. But sources close to the situation told Retail Week that the private equity firm now wants to offload the business without having to plough in any further investment to facilitate a CVA.

TPG, which also owns beleagured restaurant chain Prezzo, has instructed Deloitte to secure a buyer for the value retailer by the end of the month.

Poundworld and TPG both declined to comment.