UK-based household goods retailer Wilko is on the edge of insolvency, threatening the livelihoods of approximately 12,000 employees.
The family-owned business has submitted a “notice of intention” to bring in administrators, having been unsuccessful in securing sufficient emergency funding.
Wilko, a household name with 400 outlets nationwide, is renowned for its reasonably priced everyday products. CEO Mark Jackson stated that discussions with potential investors regarding the future of the company are ongoing.
Jackson expressed regret over the necessity of this course of action, but remains hopeful that a swift resolution can be found to “safeguard the company”. The firm did not specify in its Thursday announcement whether jobs would be impacted.
Andy Prendergast, the national secretary of the GMB union, voiced his concern, but remains optimistic that a purchaser will emerge. “Wilko’s employees need assurance about the security of their jobs. We hope this will be the primary focus moving forward,” he said.
Despite the precarious situation, Wilko reported “considerable interest” from potential investors and received several offers, but none could provide the necessary capital within the required timeframe.
The retail sector has been under pressure due to increasing interest rates, escalating energy prices, and tightened consumer spending.
However, Wilko’s chief reassured on Thursday that the firm, which generates an annual revenue of around £1.2 billion, has a “solid recovery strategy” in place. The bargain chain has been grappling with financial difficulties for some time and had contemplated a company voluntary arrangement, which would result in some landlords receiving no rent for a three-year period.
Following Jackson’s appointment to the company late last year, Wilko announced plans to eliminate 400 positions as part of a cost-cutting initiative. At that time, the GMB union described the company’s situation as a “battle for survival”.
This recent development grants Wilko a respite of up to 10 business days to devise a rescue strategy. The company, established in 1930 in Leicester, remains under the ownership of the Wilkinson family.
