Wilko could be sold ‘within DAYS’ after budget retailer collapsed into administration – putting 12,000 jobs at risk in blow to High Street
- Poundstretcher and Hilco have ruled themselves out of any potential rescue bid
Budget retailer Wilko could be bought ‘within days’ following an announcement earlier this week that it had collapsed into administration, putting 12,00 jobs at risk.
Retail rivals could snap-up between 200 and 300 shops – but it’s not yet clear whether this would save the brand or just use the physical stores as their own.
According to those familiar with ongoing discussions two rival discount chains and financial backers have expressed interest.
In a last-ditch attempt to save the chain, which has 400 branches nationwide, PwC was appointed as an administrator to see if any buyers could swoop in and save it.
Poundstretcher has ruled itself out of any potential rescue bid, according to The Sun. An insider at the company – which plans to open 50 new stores this year – said Wilko’s business model is ‘unprofitable’.
Budget retailer Wilko could be bought ‘within days’ folowing an announcement earlier this week that it had collapsed into administration
Empty shelves at Wilko as the beloved British chain announced it gone into administration on Thursday, putting 12,000 jobs at risk
Last year, Wilko agreed a deal to borrow £40million from restructuring specialist Hilco, which owns Homebase, after posting significant losses. It has confirmed it won’t be bidding, the FT reports.
The restructuring and refinancing firm previously rescued Clintons and Homebase out of administration. It also oversaw the liquidation process of both British Home Stores and Woolworths.
Union bosses have slammed the retailer’s management and admitted the situation was ‘sadly, entirely avoidable’.
Both Home Bargains and Dunelm have offered their support to Wilko staff who’s jobs are at risk.
‘We are saddened to hear of the news about Wilko and are thinking of all the colleagues who are affected.
‘We’d like to offer our support and are currently recruiting across retail, distribution and head office functions,’ Home Bargains wrote on LinkedIn.
Wilko said ‘It’s been an honour’ as it announced it had gone into administration on Thursday
Mark Jackson (pictured), the chief executive of Wilko, said in an emotional open letter: ‘We had no choice’
The collapse has placed 12,000 jobs at risk up and down the country with many fearing it could become the ‘next Woolworths’
Dunelm posted: ‘We’d like to offer our immediate support and bring to your attention some fantastic opportunities we are currently offering in our retail, head office and distribution.’
Mark Jackson, chief executive of Wilko, told staff in an emotional letter yesterday that the company had left ‘no stone unturned when it came to preserving this incredible business’ but it had ‘no choice’ to go into administration.
Despite having ‘a significant level of interest’ from potential buyers, the boss said that Wilko ‘must do what’s best to preserve as many jobs as possible, for as long as possible’.
Following the news, administrator PwC said: ‘Wilko will continue to trade all stores without any immediate redundancies as discussions with interested parties continue.
‘If buyers for some or all of the group are not found, it is likely store closures and redundancies will follow.’
Wilko, known then as Wilkinson’s, started as a single hardware store 151 Charnwood Street in Leicester in 1930
JK Wilkinson (pictured) opened the first shop with his fiance Mary Cooper. Reportedly, the pair got married at 8am on October 22, 1934 at St Peter’s Church in Highfields – and were back at the shop by 11am
Nadine Houghton, national officer at the GMB union, hit out at the firm for failing to appeal to bargain-hunting despite the cost of living crisis, while other discount brands, such as Aldi, Lidl and B&M, have seen a rise in shoppers throughout the cost-of-living crisis.
Insolvency experts react to Wilko going into administration
Sean Moran, insolvency partner at law firm Shakespeare Martineau, told MailOnline: ‘Another iconic British high street staple has fallen victim to market forces. Whilst not unexpected, Wilko’s administration will send shockwaves through the Great British retail sector with the possibility that as many as 12,000 people will face job losses.
‘It’s now down to the administrators to start the painful process of extracting any remaining value from a business that has had a presence in the UK for nearly 100 years.’
Matthew Hennessy-Gibbs, insolvency litigation partner at Keystone Law, said company insolvencies have reached a higher level in July than in 2009.
He added: ‘No sector is immune to what was first a financial pinch but is now a choking financial squeeze. Many big-name brands have gone to the wall in 2023 and some of those that have been ‘rescued’ have had to close a number of sites.’
Finella Fogarty, Partner and head of the restructuring and insolvency practice at RPC, said that even if PwC can save Wilko, it is likely some stores will be permanently closed.
She added: ‘This is yet another casualty of the poor economic climate UK retailers find themselves in as a result of Brexit, Covid and geopolitics, which together have caused a perfect storm of rising interest rates, increased energy bills for retailers, supply chain issues and squeezed customer spending, as a result of the cost of living crisis.’
Elliot Green, an insolvency practitioner expert at Oliver Elliot Chartered Accountants, added: ‘Given the longstanding fixture Wilko has been on the High Street, one hopes the business is saved and its future secured.
‘Subject to any administration proceeding, then in due course the company’s proposed strategy should hopefully become clearer upon publication of any administration proposals and the financial position of the company can be considered in more detail from sight of a filed Statement of Affairs.’
Meanwhile former managing director of Wilko Gordon Brown, who led Wilko from 1992 to 2007, held out hope the troubled store could be saved by investors.
Wilko, formerly known as Wilkinson, was founded in 1930 by J K Wilkinson, whom Mr Brown said, ‘was a very strong character’ who ‘really understood retail’.
The store started as single hardware store run as a family-business on 151 Charnwood Street in Leicester some 93 years ago – it was dubbed the ‘Old Charney’.
Wilkinson and his then fiancé Mary Cooper ran the shop before getting married at 8am on October 22, 1934 at St Peter’s Church in Highfield – so committed to their store, they were back with their customers by 11am.
For decades, Wilko stores have been dotted around town centres, offering Brits stationery, gardening supplies, homeware, cleaning products, or simply a tasty pot of pick-and-mix. Now, shoppers have been left devastated by the news.
Retired IT worker Kieran Moore, 64, who shopped at the Wilko store in Ely, Cambridgeshire, said: ‘It could go the same way as Woolworths – hasn’t moved with the times. But it [Wilko] serves a purpose.
‘It is what it is. These are interesting times, but not in a good way.’
Judith Fox also added she was instantly reminded of the closure of Woolworths stores 15 years ago.
She told MailOnline: ‘I have always felt that Wilko and Woolworths had many similarities, both reasonably priced stores offering a wide variety of goods that were sometimes difficult to find elsewhere.’
But she said she was surprised about the fall of Wilko, adding: ‘I particularly noticed that shelves seemed more empty when the Covid pandemic struck and, even though supposedly life has returned to normal, Wilko to me appeared to be struggling, with many shelves practically empty.’
Retired accountant Keith Fearn, of Ely, Cambridgeshire, who was also visiting the store, said: ‘It will be a loss. 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.’
Meanwhile Elsa Del Potzzo told MailOnline outside the Kensington High Street store: ‘I’m p****d off, we need it. We need these kinds of shops. Not everyone can afford Harrods or Waitrose.
‘People are being priced out of the UK, the Government is letting this happen. London is becoming unlivable, like New York.’
Wayne Jervis, 41, added: ‘Whenever I walk past it’s really busy. It does surprise me its shutting down. You’re not safe, that’s the problem.
‘Nowadays, the internet and stuff like that it’s very difficult for these shops to stay open.’
Wayne Jervis (pictured at Wilko, Kensington High Street), 41, said: ‘Whenever I walk past it’s really busy. It does surprise me its shutting down. You’re not safe, that’s the problem. ‘Nowadays, the internet and stuff like that it’s very difficult for these shops to stay open.’
Elsa Del Potzzo (pictured) told MailOnline outside the store on London’s exclusive Kensington High Street: ‘I’m p****d off, we need it. We need these kinds of shops. Not everyone can afford Harrods or Waitrose.’
Natalie and Lauren, 32 and 34, said: ‘We’re really sad about Wilko closing. It’s awful. It’s a household name. The high street is going to be closed soon. We work here and so many shops close, it’s really sad to see.’
The budget-chain is a staple for Britain’s shoppers who are after stationery, gardening supplies, homeware, cleaning products, or just a pot of pick-and-mix
Wilko’s notice at the High Court last week came after it received indicative offers to help recapitalise, but none could provide enough liquidity in the time needed
Natalie and Lauren, 32 and 34, said: ‘We’re really sad about Wilko closing. It’s awful. It’s a household name.
‘The high street is going to be closed soon. We work here and so many shops close, it’s really sad to see.’
Wilko has become the latest victim of the post-pandemic economy and the ongoing cost-of-living crisis.
It is yet another blow to Britain’s shoppers who have seen Iceland, Argos and Boots all shutting scores of stores.
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