Wilko have announced they are planning to appoint administrators as the homeware and hardware chain is expected to enter insolvency putting 12,000 jobs at risk.
On Thursday Wilko filed a notice of intention to appoint administrators at the High Court after failing to secure a takeover which would have helped with “mounting cash pressures.”
The company which has around 400 shops have hired advisors from PwC to find a buyer to keep Wilko trading.
Wilko said that they had “no choice” but to file for potential insolvency.
Wilko chief executive 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.”
Andy Prendergast, national secretary at the GMB union, 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.”
Sean Moran, insolvency partner at 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 UK 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% of administrations with 118 filings – replacing construction as the highest in the UK.
“Wilko is the latest in a long line of high profile casualties as many stores struggle to stay afloat with the future of the high street retail market remaining volatile.
“Not only has this sector been hit the hardest, but there has been a significant increase in overall insolvency filings, when compared to the first half of 2022. As we teeter on the edge of recession these statistics give real cause for concern.
“The collapse of Wilko demonstrates just how much high street operators are battling a raft of issues, with high interest rates, inflation and the ongoing struggle to keep pace with the technology required to compete with Amazon and other online specialists.
“Given the economic situation, it is vital that businesses take advice as soon as possible when warning signs appear. Being proactive can often be the difference between a business thriving or failing.”