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Thursday, May 23, 2024

Wilko files for administration, placing 12,000 jobs at risk

Budget retailer Wilko has filed a notice of intent to appoint administrators, putting 400 stores and more than 12,000 jobs in jeopardy.

The privately-owned company, which sells a wide range of branded FMCG goods at reduced prices, secured a £40 million lifeline at the start of the year from Hilco UK, but has spent recent weeks searching for a rescue deal.

Wilko CEO Mark Jackson 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 a notice of intention.

“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.

“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.”

Following the announcement, Nick Drewe, retail expert and founder of online discount platform Wethrift, shared his reaction to the news:

“Today’s news regarding the uncertain future of Wilko is, unfortunately, another example of the many retailers falling victim to the ongoing cost of living crisis and economic uncertainty.

“Consumers facing the repercussions of rising interest rates, energy prices and a lack of salary increases, means that the pressure to secure the very best prices and deals on everyday products is now greater than ever.

“Following the collapse of Woolworths in 2009, many turned to Wilko as an alternative for sourcing a huge range of items or goods, at a reasonable price. From pick-and-mix sweets and pet food, to cleaning products and even homewares, Wilko has arguably become a staple of the British high street over the past two decades.

“Unfortunately, despite the fact that Wilko has historically offered its customers competitive prices, chains such as B&M, Home Bargains and The Range seem to have overtaken in terms of popularity, availability of stock, and become the ‘go-to’ stores for bargain hunters.

“Many are speculating that, due to its reliance on in-person purchases and high street footfall, Wilko failed to recover from the devastating impact that the COVID pandemic had on retailers during lockdown. British consumers began pivoting the way they shopped for essential items, preferring instead to rely on online shopping rather than risking in-store visits.

 

 

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