Poundworld's losses widened in 2016-17 to £17.1 million, from £5.4m 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.
It comes after a last-gasp rescue deal between the chain's owner, TPG Capital, and private equity firm Rcapital fell apart over the weekend.
Talks with a potential buyer R Capital have collapsed meaning that the chain felt it had no other option but to put the company into administration.
Deloitte is expected to be appointed to oversee the administration. No redundancies or store closures being announced at this time.More news: Kim Kardashian West shares glimpse at Kanye’s birthday bash
Poundworld, which has a chain of 335 shops, filed a notice of intention to appoint an administrator last Thursday, giving it temporary protection from its creditors.
Grainger Games on Eagles Meadow closed earlier this year due to entering administration.
It is the latest blow for Britain's struggling high street, which has seen a string of retailers and restaurants shrink or collapse altogether in the face of rising costs and a squeeze on consumer spending. "Unfortunately, this has not been possible", Clare Boardman, joint administrator at Deloitte, said today.
A spokesman for TPG said putting the business into administration was a "difficult decision".More news: Rafael Nadal clinches record-extending 11th French Open title
A buyer for all or part of the business is now being sought.
Poundworld, which also trades under the name Bargain Buys, welcomes two million customers through its doors each week and competes with the likes of Poundland and Poundstretcher.
House of Fraser is seeking landlord approval for the restructuring plan, which is a form of insolvency known as a Company Voluntary Agreement (CVA).More news: Prey's Mooncrash DLC is available right the heck now