UK discount retailer Wilko has collapsed into administration putting thousands of jobs at risk. Around 12,500 jobs are on the line after rescue talks failed with prospective suitors. The retailer, which has 400 shops across the country, has struggled in recent years and is now in the hands of administrators PricewaterhouseCoopers. The administrators will initially keep all stores open, without any “immediate” redundancies for staff. But if a buyer for some or all of the business can’t be found, staff will likely lose their jobs.
Mark Jackson, the chief executive, 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. We’ve all fought hard to keep this incredible business intact but must concede that time has run out and now, we must do what’s best to preserve as many jobs as possible, for as long as is possible, by working with our appointed administrators.”
Talks had failed with prospective suiters despite Wilko making several cost-cutting measures, which Jackson claimed would have resulted in “the most profitable Wilko ever recorded within 24 months”. Owners of the chain, led by the Wilkinson family, took £3m in dividends in the 12 months to the end of February 2022. Administrators PricewaterhouseCoopers, who were formally appointed on Thursday afternoon, said they would continue to seek a buyer for all or part of the business after their appointment.
Nadine Houghton, national officer for the GMB union, which represents thousands of workers at Wilko, accused the firm’s management of allowing the retailer to lose its place in the market by failing to invest in technology for home shopping and other improvements while “much-needed cash was taken out of the business by the Wilkinson family when it was struggling”.
She 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.”
The most likely buyer to take on Wilko is thought to be Hilco, a restructuring specialist that holds a big chunk of Wilko’s debt. Other interested parties include the Laura Ashley owner, Gordon Brothers; the Bensons for Beds owner, Alteri; and OpCapita. Other firms including Primark, Poundland and B&M are also thought to be interested in taking on some stores.
The administrators said store closures and redundancies will likely follow if no buyer was found. Wilko stores will continue to trade until further notice. They said that the business had encountered cashflow problems and a deterioration in trading amid “incredibly challenging trading conditions” through the pandemic and in the more recent cost of living crisis.
Zelf Hussain, a 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.”
“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. 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.”