The budget retailer appointed Deloitte as administrators, casting doubt over the future of its 335 stores and 5,100 jobs.
Last-ditch rescue talks with R Capital broke down over the weekend.
Poundworld’s losses widened in 2016-17 to £17.1million, from £5.4 million the year before.
The news came just days after House of Fraser detailed its plans to shut 31 stores, affecting around 6,000 jobs.
Deloitte will try to find a buyer for the business, and has said there are no redundancies or store closures at this time.
Clare Boardman, joint administrator at Deloitte, said: “The retail trading environment in the UK remains challenging and Poundworld has been seeking to address this through a restructure of its business.
“Unfortunately, this has not been possible.”
She said the business was hit by falling footfall, alongside rising costs and weak consumer confidence.