Wilko: 12,000 jobs at risk after retailer collapses into administration
Wilko has entered administration after failing to secure a rescue deal, placing some 12,000 jobs at risk, ITV News' Kelly Foran reports
Troubled high street retailer Wilko has collapsed into administration, putting around 12,000 jobs at risk across the nation.
It comes a week after the company, which has about 400 shops in the UK, filed a notice of intention to appoint administrators on Thursday.
Since then the store raced to find a buyer, but failed to secure a rescue deal, so has now appointed administrators at PwC.
PwC has confirmed Wilko will continue to trade from all its stores "without any immediate redundancies".
The boss of the homeware and hardware chain Mark Jackson said: "We left no stone unturned when it came to preserving this incredible business but must concede that with regret, we’ve no choice but to take the difficult decision to enter into administration."
Filing its notice to appoint administrators last week gave Wilko 10 working days to find a buyer for all or part of the business to avoid going bust.
Administrators Jane Steer, Zelf Hussain and Edward Williams from the corporate finance firm PwC have been appointed to oversee the process.
PwC said the retailer has suffered “increasing cash flow pressure and a deterioration in trading” after sales were impacted by the pandemic and cost-of-living crisis.
Zelf Hussain, joint administrator and PwC partner, said: “It is incredibly sad that a well-loved, family business that has been on the high street for over 90 years has had to go into administration today.
“Many high street retailers are facing a number of well-documented challenges and Wilko has been significantly impacted by the headwinds facing the industry including inflationary pressure and rising interest rates.
“As administrators, we will continue to engage with parties who may be interested in acquiring all or part of the business.
“Stores will continue to trade as normal for the time being and staff will continue to be paid.”
The company, which has headquarters in Worksop, Nottinghamshire, was looking for a potential buyer and is understood to have held talks with interested parties.
Gordon Brothers, which owns the Laura Ashley brand, was reportedly among those to have held discussions over a possible rescue offers before Wilko was forced to enter into administration.
Mr Jackson said: “While we can confirm we had a significant level of interest, including indicative offers that we believe would meet all our financial criteria to recapitalise the business, without the surety of being able to complete the deal within the necessary timeframe, and given the cash position, we’ve been left with no choice but to take this unfortunate action.”
He said it the business had pressed ahead with a turnaround plan, including cost savings, which “would have delivered the most profitable Wilko ever recorded within 24 months”.
The retailer confirmed it has appointed administrators from PwC.
Nadine Houghton, national officer at the GMB union, said: “The 12,000 Wilko workers now facing potential redundancy will take little solace that with better management the situation that has befallen Wilko was, sadly, entirely avoidable.
“GMB has been told time and time again how warnings were made that Wilko was in a prime position to capitalise on the growing bargain retailer market, but simply failed to grasp this opportunity.”
Last year, Wilko agreed a deal to borrow £40 million from restructuring specialist Hilco after posting significant losses.
It launched a turnaround plan earlier this year after its sales and shopper footfall came under pressure as consumer budgets were hammered by the rising cost of living.
Wilko said it saw “real progress” against many areas in its plan and made significant cost savings but was unable to improve its finances quickly enough to avoid insolvency.Administrators will now seek out potential buyers for the firm’s store estate and its brand.
Earlier this week the shop suspended home deliveries as it raced for a rescue deal to avoid collapse - instead shoppers were told to use click and collect services in store.
The high street store was founded as a hardware shop in Leicester in 1930.
It went on to fill the demands for DIY products in the 1950’s, according to a statement released by Wilko's CEO Mr Jackson today.
Wilko created its first product range in the 1970’s and launched online shopping in the 2000’s.
Shopper Kieran Moore, 64, who visited the Wilko store in Ely, Cambridgeshire, said he feared Wilko “could go the same way as Woolworths” as it "hasn’t moved with the times".
Retired accountant Keith Fearn, of Ely, Cambridgeshire, who was also visiting the store, said: “It will be a loss. It’s got quite a variety of things. My cat particularly likes their food – I browse once a week.”
The 79-year-old continued: “You think what’s the management doing? Have they sleepwalked into this? They’ve got massive facilities across the country. I feel sorry for the staff.”
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