The future of a high street budget retailer was hanging in the balance after talks to save the chain broke down.

Poundworld, which has stores in Coopers Square shopping centre, in Burton, and at the Pipeworks, in Swadlincote, was in talks with private equity firm R Capital over the weekend.

It is now calling in administrators at Deloitte after talks broke down with more than 5,000 jobs could be under threat.

It is understood that Poundworld's owner, TPG Capital, rejected previous offers to buy the business out of a pre-pack administration.

Daniel Butters and Clare Boardman, restructuring partners at Deloitte, have today, Monday, June 11, been appointed as joint administrators at Poundworld Retail Limited.

Deloitte is likely to run another sale process once appointed as administrator, it has been reported.

Poundworld in Hepworth Retail Park, Swadlincote
Poundworld in Hepworth Retail Park, Swadlincote

The numbers of employees involved would make Poundworld the biggest High Street casualty in 2018 to date.

It is thought some 5,300 jobs could be placed at risk with the announcement but bosses have said there will be no redundancies or store closures at this time.

Poundworld will continue to trade while a buyer for all or part of the business is sought.

Bosses said that like many high street retailers, Poundworld has suffered from high product cost inflation, decreasing footfall, weaker consumer confidence and an increasingly competitive discount retail market.

Joint administrator Clare Boardman said: "The retail trading environment in the UK remains extremely challenging and Poundworld has been seeking to address this through a restructure of its business. Unfortunately, this has not been possible.

"We still believe a buyer can be found for the business or at least part of it and we are keeping staff appraised of developments as they happen. We thank all employees for their support at this difficult time."

Poundworld's losses widened in 2016-17 to £17.1 million, from £5.4 million of losses the year before.

The retailer was hit with a £5.7 million charge for onerous leases, a provision retailers make when the cost of a lease is no longer covered by the income of the store.

Poundworld offers around 8,000 product lines mostly priced at £1, including groceries, toiletries, household cleaning and confectionery items.

The business operates from 335 stores and its head office and distribution centre in Normanton, near Wakefield in West Yorkshire.

The firm employs around 5,100 people.

A spokesman for shopworkers' trade union Usdaw will seek urgent talks with the administrators appointed to oversee Poundworld as they said staff are deeply concerned about the future.

Usdaw national officer Dave Gill said: "Poundworld staff are deeply concerned about their jobs after the company failed to secure a rescue package. We are seeking urgent talks with the administrators to represent the best interest of our members and urge them to find a buyer for the company.

"We are hopeful that the administrators will engage with us to help save jobs. We welcome Deloitte's initial approach for Poundworld to continue to trade while a buyer for all or part of the business is sought and that there are no redundancies or store closures at this time.

"Usdaw is providing the support and advice our members require at this very difficult time and we expect the administrators to ensure all staff are treated with dignity and are fully consulted."