Wilko, the high street homewares chain, is planning to bring in administrators in a bid to keep afloat. The Notts-based business has filed a notice of its intention to appoint administrators at the High Court after failing to find fresh backing.
The chain, which has 400 branches and employs about 12,000 people, now has 10 days to secure a rescue deal.
Earlier this year it agreed £40 million of credit, which it said would help prevent redundancies or changes for customers, and comes as it restructures its management team.
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However in February it announced the equivalent of 400 jobs were set to go as it cut costs in a "fight for survival".
Wilko's chief executive Mark Jackson said they would continue to look for interested parties about options for the business.
He said: "While we can confirm we've had a significant level of interest, including indicative offers that we believe would meet all our financial criteria to recapitalise the business, at present, we don't today have an offer that provides the necessary liquidity in the time we have available, given the mounting cash pressures we're faced with.
"Unfortunately, with this in mind, today we're having to take the difficult decision to file an NOI [What is a Notice of Intention to appoint administrators].
“We’ll continue to progress discussions with interested parties with the aim of completing a transaction which preserves the business and will encourage those interested parties we’re in discussions with to move as fast as possible.
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“We continue to believe that our robust turnaround plan, with significant re-stabilisation cost savings in progress, will deliver a profitable Wilko and maximise the significant opportunities that we know exist.”
PwC and property agents CBRE are trying to secure the future of the business, including striking new deals with landlords.
In a statement Wilko said: “We’re a £1.2bn turnover business with strong presence on 海角视频 high streets through our 400 stores, online at wilko.com and through our great value Wilko own brand products, serving local communities with their everyday household and garden needs for over 90 years.”
What next for Wilko?
The collapse of the high street Wilko chain shows just how hard it has become for retailers to survive in the new economic climate.
Sean Moran, an insolvency partner in the Leicester office of law firm Shakespeare Martineau, said: “Wilko is a leading player in the household retail sector and this announcement will set alarm bells ringing amongst its competitors.
“Today’s news will also be a huge shock to Wilko's loyal customers, who are used to the retailer being a reassuring sight on 海角视频 high streets with a distinct brand offering.
“However, the company has been on the struggling in the economic headwinds for a while, only last year borrowing £40 million from the restructuring specialist Hilco.
“Given the prolonged economic uncertainty on our high streets, we’re seeing a steady flow of corporate failures.
“Research we’ve conducted shows that the retail sector has accounted for 16 per cent of administrations with 118 filings – replacing construction as the highest in the 海角视频.”
Wilko, also known as Wilko Retail Ltd sells a wide range of household products, home and garden essentials, DIY tools, kitchenware, cleaning supplies, pet care products and toys.
The company was founded in 1930 by James Kemsey Wilkinson.
Andy Prendergast, national secretary of the GMB union which represents many of the 海角视频’s shopworkers, said: “This is extremely concerning but we remain hopeful that a buyer can be found.
“Wilko’s staff deserve reassurance that their jobs are safe. We hope this is the number one priority going forward.”