10 August 2023 , 08:52
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Struggling high street giant Wilko is reportedly hours away from collapsing into administration and has suspended home deliveries.
Sky News reports that hopes of rescuing the budget homeware and hardware retailer are fading, with PricewaterhouseCoopers (PwC) expected to be appointed as administrators later today. One source told the news site the eventuality of the firm collapsing is "inevitable" unless a new deal emerges.
It comes after Gordon Brothers, Alteri Investors and Opcapita were reported to have been considering offers for the company. Sky News this morning reported that "hopes have now receded" of this materialising.
Wilko last night suspended online deliveries, meaning customers unable to get to a store can't currently order goods online. A notice on its website on Wednesday said the service was "currently unavailable" but said customers could still do click-and-collect.
The retailers recently extended their home delivery contract with GXO until June 2026, but shoppers are currently unable to buy items for delivery. The click and collect service already accounted for 42% of online sales, Wilko bosses said in February this year.
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Wilko filed a notice of intention to appoint administrators last Thursday. If the high street stalwart does go under, it would put 12,000 jobs at risk and potentially close some of its 408 stores.
In his statement, 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. Unfortunately, with this in mind, today we’re having to take the difficult decision to file a NOI.
“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.”
Wilko hired advisors from PwC in a bid to find a buyer to secure fresh funding to keep the firm trading. Last year, Wilko agreed a deal to borrow £40million from restructuring specialist Hilco after posting significant losses.
The company also announced it would be closing more than a dozen of its branches in January last year, before following up with an announcement it would be axing more than 400 jobs both in stores and head office in February this year.
Several weeks later, it announced plans for restructuring options as it approached PwC. The brand was said to be considering entering a company voluntary arrangement (CVA) - a form of insolvency.
A fall in footfall in town and city centres as well as rising inflationary costs has been blamed for the struggles faced by multiple high street names in recent months. Names which have face devastating losses and closures include stationary giants Paperchase, which closed all its stores after being bought by Tesco, outdoor clothing retailers Joules which went bust last year and restaurant chain Byron Burger which closed nine branches.