Poundworld is applying to the courts to appoint administrators as the race to save the struggling discount chain runs out of the road.

The planned court filing means the retailer, which employs 5,000 staff, is on the brink of collapse. The move will temporarily shield Poundworld from its creditors, giving bosses 10 working days to come up with a restructuring plan for the chain which has 355 stores.

Poundworld’s problems first surfaced in April when its owner, the American private equity firm TPG Capital, was said to be considering a plan to launch a CVA, an insolvency procedure that would enable it to reduce rents and close about 100 stores.

Poundworld was acquired by TPG Capital for £150m in 2015 but it has struggled in the wake of the Brexit blow to sterling that pushed up the cost of imported goods. Last month, TPG used a CVA to close nearly 100 branches of its ailing restaurant chain Prezzo.

In May it emerged that TPG had decided to cut it losses and was putting Poundworld, which started in 1974 as a market stall in Wakefield in West Yorkshire, up for sale. However no serious buyer had come forward by Monday’s deadline, giving the company few options but to call in the administrators.

Poundworld’s difficulties come as a string of retailers and restaurants seek to exit high street outlets in the face of rising costs and a squeeze on consumer spending. House of Fraser announced plans on Thursday to close 31 stores, putting a further 6,000 jobs at risk. Mothercare, New Look and Carpetright are all closing dozens of stores after creditors approved CVAs. The burger chain Byron and Jamie’s Italian restaurants have also closed outlets using the process.

There may be some hope for Poundworld staff as turnaround firm RCapital is said to be discussing a rescue deal with TPG. The return of Chris Edwards, the company’s founder who sold out to the private equity firm, has also been mooted.