Poundstretcher could be in trouble as it takes same action as Maplin and New Look

Concerns have been raised about the future of Poundstretcher after it emerged it was facing difficulties.

Financial restrictions previously placed on clothing chain New Look and electrical stores Maplin have been applied to the Poundstretcher too, which has branches in Burton and Swadlincote, according to reports in the trade press.

Poundstretcher's parent company has been subject to a cut in its credit insurance which is designed to protect suppliers from losing out if the company stops trading.

This is often "a red flag for struggling companies" according to the Grimsby Telegraph.

New Look later announced major closures across the country and Maplin went into administration following the same changes.

Poundstretcher owners, brothers Rashid and Aziz Tayub, said losing the credit cover would not impact the business as most of its suppliers are from Asia.

The chain owns more than 400 stores nationwide including in High Street, Swadlincote, and Union Street, in Burton.

However, it is the latest indication that the company is struggling.

In December, Poundstretcher's Leicester-based parent company Crown Crest Group confirmed pre-tax losses of £3.5m for the year to 31 March 2017, down from a profit of £3.4m in the previous year.

Turnover from Poundstretcher, which is based in Huddersfield, dropped from £430m to £398m.

A statement from the board said the group faced "a number of risks and uncertainties" for the year ahead.

And last summer Poundstretcher was said to have held informal sale talks with the firm Endless which specialises in turning around "distressed" companies.

The retailer was said to be struggling to cope with inflation and rising competition.

Last month electronic giant Maplin went into administration putting thousands of jobs at risk. The chain employs 2,500 people nationally.

Fashion chain New Look also announced plans to axe 60 stores nationwide resulting in 980 job losses. The High Street store said a "challenged trading performance and a difficult retail environment" as the reason behind the decision.