Poundworld UK is set to be acquired by a Dublin retailing family, the Hendersons, in a deal that would salvage part of the budget retailer’s store estate.
However, it emerged on Thursday that the future of House of Fraser store in Belfast is once again in jeopardy as the company raced to raise funding to avoid administration.
David Henderson, whose family opened Ireland’s original Poundworld store in 1984, confirmed an offer had been accepted by administrators Deloitte on Thursday to purchase the best and remaining stores for an undisclosed sum.
The move offers a glimmer of hope for some of the nearly 200 employees in Northern Ireland that staffed the firm’s 12 stores here.
All outlets will close on Friday as planned, but the family will begin to reopen some after the deal is rubber-stamped, likely to be next week.
Poundworld UK, which was bought by private equity firm TPG Capital in 2015 for £150 million, collapsed into administration in June, closing over 250 stores, resulting in the loss of 4,000 jobs.
Ray Henderson sold his original Poundworld, then changed to Euroworld, in 2007.
His son, David Henderson, who has experience in the retail sector in Ireland and the US, led the negotiations.
“We are delighted to have agreed the purchase of Poundworld and we now look forward to bringing the company back to profit and provide current and new customers with an unrivalled product offering at low prices,” David Henderson said.
The Hendersons have formed a new UK entity, RVP Holdings Limited, to operate the business there.
Poundworld turned over nearly £500m in 2017 with 6,000 employees across 337 stores, selling everything predominantly at £1.
In the meantime, the situation facing House of Fraser in Belfast is almost the reverse.
The store is one of the up-market retailer’s top performing locations and was included in the restructuring package proposed under the deal agreed with Chinese investor C. banner.
By Thursday afternoon it emerged that the business is now facing a race against the clock to find fresh investment and avoid a calamitous administration that would imperil the entire company and around 17,000 jobs.
The department store chain confirmed on Thursday that it must secure funding before August 20 as crunch talks with potential rescuers continue.
“House of Fraser confirms that discussions continue with interested investors and its main secured creditors, which are focused on concluding as quickly as possible to enable receipt of an investment required by no later than 20 August 2018,” it said in a statement.
House of Fraser’s lenders, which include HSBC, are now locked in talks with would-be suitors, including tracksuit tycoon Mike Ashley and Philip Day, the billionaire owner of Edinburgh Woollen Mill.
Hugh Black, who opened Victoria Square as manager 10 years ago with House of Fraser as the anchor tenant, said the latest developments were not encouraging.
“This changes the situation dramatically,” he told the News Letter.
“It’s critical now and, if they don’t find a buyer, then admininstration will not respect the performance of the Belfast store.”
Adding that Ashley is also a shareholder in Debenham he said a mergeer between the two could be a option.
“I think Mike Ashley is probably the only person who would have what it takes, to see this through,” he added.