Administrators for the failed Wilko chain say jobs could go and stores will shut unless they can find a buyer in the next few weeks or months.
Top accounting firm PwC was brought in to take on the affairs of family-owned Wilko today after management failed to bring in fresh funding. However the administrators still hope to find investors and protect the brand.
Wilko, which is headquartered in Worksop, Notts, has built up multi-million pound losses on the back of rising borrowing costs, a cost-of-living crisis, post-Covid disruption to global supply chains and growing competition from the likes of B&M, Poundland, The Range and Home Bargains. Amazon is also said to have taken sales from it.
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Last ditch attempts to find fresh investment have come to nothing, putting the future of its 400 stores and 12,500-strong workforce under threat.
The administrators will now look for a way of saving the business with all stores continuing to trade, for now at least, and no immediate redundancies as talks with potential buyers continue.
But they said: “If buyers for some or all of the group are not found, it is likely that store closures and redundancies will follow.”
Joint administrator and PwC partner Jane Steer 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 enter administration today.
“It's been a particularly difficult time for many high street retailers over recent years, as reduced consumer spending, inflationary pressure and increasing costs continue to have an impact.
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“Wilko has been a staple of many British high streets for decades.
“We know that the appointment of administrators, which comes during an already challenging time for many, will be an unsettling development for everyone involved with the business – particularly its committed team members – and the communities it serves across the region.
“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.”
Business leaders and industry experts said administration could be the best option for the business and its staff – with debt write-offs making it a more attractive proposition to buyers.
East Midlands Chamber described Wilko as a regional institution, opening its first shop in Leicester 93 years ago and having its HQ in Nottinghamshire for the past few years.
Chamber director of partnerships David Pearson said: “Its listing as the ninth largest company in Reach plc’s East Midlands Top 500 Companies 2023 reflected how it remained a relevant business.
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“But like many retailers it has faced a multitude of structural challenges amid the transition to online shopping and cost pressures.
“Wilko’s enormous popularity with customers, which has been evident in many comments by the general public since last week’s news about its impending collapse, provides hope there is still an opportunity to save the company in some form.”
Sean Moran, an insolvency partner in the Leicester office of law firm Shakespeare Martineau, said another iconic British high street staple had fallen victim to market forces – unable to match “more agile high street competition”.
He said: “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 海角视频 for nearly 100 years.
“The collapse shows that even the biggest discount stores aren’t immune to the economic crisis with retailers struggling as customers tighten their belts.”
Michael Lynch is a partner at city law firm DMH Stallard and an insolvency and business restructuring specialist.
He said: “Wilko entering into formal administration does not necessarily mean it cannot continue as a going concern, with the saving of jobs.
“Parties interested in purchasing Wilko prior to its administration will now find a more attractive business to purchase, without its previous debt burden and reported capitalisation requirements.
“The appointed administrators will likely have determined the purpose of the administration; if that purpose is to rescue the company as a going concern, then that would indicate that there is good potential to achieve that.
“Any continued trading under administration is supportive of an ongoing sale.”
Nick O’Reilly director of restructuring and recovery at accountancy group MHA said a series of strategic failures led to Wilko’s demise – including having too many big high-street stores and an over-reliance on imports.
He said a new buyer could come forward but with a “much smaller future operation”.
He said: “Wilko will not be the last retail failure of 2023. Increased cost of borrowing and increased costs caused by inflation will impact other retail companies’ ability to be profitable and survive.
“The company followed an outdated way of doing business, failing to keep up with innovation in the retail world.
“Wilko's situation should teach a harsh lesson to retailers; being flexible and smart in strategy are key to navigating the changing retail landscape.”