Poundworld is to put 5,100 jobs in jeopardy as it looks to call in administrators after efforts to secure a last-minute buyer failed.
US private equity owner TPG is expected to appoint Deloitte as administrators this morning, casting doubt over the future of the retailer's 335 stores.
It comes after Little Chef owner Rcapital called time on talks to buy the retailer as a solvent business over the weekend.
An administration of Poundworld would inflict another hammer blow to the high street following a spate of restructurings that have led to a wave of store closures and thousands of job losses.
House of Fraser announced last week that it would close more than half its store estate and put 6,000 jobs at risk through a restructuring known as a company voluntary arrangement (CVA).
TPG had also been attempting to rescue Poundworld from its precarious financial position by pursuing a CVA, a type of insolvency that allows troubled companies to secure deep discounts on rents and close underperforming stores.
However, it later changed tack and opted to sell, triggering a race against time to find a buyer for the stricken retailer.
Hopes that Alteri Investors would snap up the business have faded. Poundworld’s founder Chris Edwards and US Investment firm Flacks Group had also shown interest, but no deal has been struck.
Poundworld has seen its financial position deteriorate in recent years as it grappled with the tough conditions engulfing the high street.
The West Yorkshire-based company booked a £17.1m loss before tax for the year to the end of March last year, widening from a £5.4m loss over the period in 2016.
Since then, the retailer’s cash flow has come under further pressure, placing the business in greater trouble.
A shift in shopping habits, waning consumer confidence and rampant costs have created a punishing environment for high street retailers.
Maplin and Toys R Us have already collapsed, while New Look, Carpetright and Mothercare have been pulled back from the brink by pushing through CVAs.