High street retailer on brink of collapse

Retailer Wilko is on the brink of collapse after it sought court protection from its creditors while it seeks a rescue deal.

The £1.2bn-turnover business has been in trouble for months, exploring CVA options and potential funding. Investor Hilco is understood to have put in £45m already this year to keep the business going.

But Wilko has now filed a notice of intention to appoint administrators, which gives a 10-day window to secure a deal while protected from action by other creditors. The business is being advised by PwC, while property agents CBRE had been brought on board to negotiate with landlords.

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 an NOI.”

Last week the GMB Union cancelled a planned meeting with its Wilko members because “the company have shared that they hope to be able to provide us with a more detailed update next week”.

The Nottinghamshire-headquartered retailer has around 12,000 staff across 400 stores.

It has faced significant challenges with stock supply due to credit limits with suppliers, which led it to focus on stock that would generate the highest short-term revenue.

Last month it was revealed that the Wilkinson family was mulling a sale of the business, meaning the retailer would fall out of the hands of the Wilkinson family for the first time since it opened its first store in Leicester in 1930.

Jackson added: “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.”