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Wilko to go into administration leaving high street giant with 400 stores on brink of collapse
WILKO is on the brink of administration, putting 400 stores and thousands of jobs at risk.
The bargain retailer today filed a notice of intent to appoint administrators.
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It comes as Wilko's owners were said to be exploring the sale of a controlling stake just last month.
The discount chain has 400 shops and employs about 12,000 people.
Wilko chief executive Mark Jackson confirmed there has been "significant levels of interest" but that the business has not yet received an offer.
And it has resulted in the retailer having to take the "difficult decision to file an NOI [notice of intention]."
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He said: "We’ll continue to progress discussions with interested parties with the aim of completing a transaction which preserves the business."
The retailer is being advised by PwC, while property agents CBRE have been brought on board to negotiate with landlords.
A notice of intention gives Wilko a ten-day window to secure a deal while protected from action by other creditors.
If Wilko does file for administration this means all control of the business is passed to an appointed administrator - who has to be a licensed insolvency practitioner.
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Their goal is to leverage the company's assets and business to repay creditors.
It doesn’t necessarily mean the end of the business.
Instead, administrators will try to help a company find ways to repay debts or solve its cash flow problems.
Administration can last anywhere from a few weeks to up to a year or more.
But if the administration process can't rescue the company or find a new owner, this usually leads to liquidation.
Liquidation is the process of selling all assets and then dissolving the company completely.
Wilko is yet to confirm exactly what will happen to all stores and 12,000 jobs.
It comes after the company announced plans to close more than a dozen of its shops in January last year.
Then in February 2023, it revealed it planned to cut over 400 jobs, including both store and head office roles.
Wilko, like many other high street retailers, is said to have seen a big drop in footfall and has "stopped performing to its full potential".
Retailers have been feeling the pinch since the pandemic while shoppers are cutting back on spending due to soaring inflation.
High energy costs and a shift to shopping online after the pandemic are also taking a toll and many high street shops have struggled to keep going.
Numerous high street brands have collapsed into administration in the last 12 months.
From the Scottish clothing brand M&Co to wellies store Joules, a number of familiar brands went bust in 2022.
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Major burger chain Byron Burger fell into administration in January and immediately shut all nine restaurants.
Paperchase then collapsed into administration at the end of the same month and all 106 stores have since closed for good.