Thousands of jobs are at risk at Wilko Ltd. after the British low-cost retailer signaled it was at risk of insolvency proceedings due to “mounting cash pressures.”
(Bloomberg) — Thousands of jobs are at risk at Wilko Ltd. after the British low-cost retailer signaled it was at risk of insolvency proceedings due to “mounting cash pressures.”
The privately-owned chain, which sells everything from stationery to hardware, has filed notice of its intention to appoint administrators at the UK’s High Court, following weeks hunting for a rescue deal.
Wilko, which has 400 shops and employs about 12,000 people, started from a single hardware store in 1930. It secured a £40 million ($50 million) lifeline from Hilco UK, the owner of Homebase, at the beginning of this year.
Filing notice of intention to appoint administrators can buy businesses protection while they continue rescue talks. In response to an approach from Bloomberg News, Wilko Chief Executive Officer Mark Jackson said the chain did not “today have an offer that provides the necessary liquidity” given its cash position.
He said Wilko would continue discussions with interested parties, but had been left with “no choice” but to file notice of its intention to appoint administrators.
Read More: Wilko Weighs Renegotiating Rents to Cut Costs
Wilko has faced increasing competition in recent years with B&M European Value Retail SA, Poundland, Home Bargains and The Range all offering similar products. Earlier this year the company said it was affected by supply chain disruptions and a significant drop in footfall.
As part of changes earlier this year, chairwoman and major shareholder Lisa Wilkinson stepped down to be replaced by Chris Howell, former chairman of Bensons for Beds. Wilkinson, the granddaughter of the company’s founder, remained on the board as family director. Wilko also replaced its Chief Executive Officer Jerome Saint-Marc with Jackson, who was previously CEO of Bensons for Beds.
The company’s collapse would be the latest in a long line of retailers that have struggled through Covid and Britain’s cost of living crisis. Fashion and homeware business Cath Kidston, online furniture brand Made.com, fashion chains Joules and M&Co all entered insolvency over the past year.
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