Wilko goes into administration after rescue deal hopes collapse

Wilko goes into administration after rescue deal hopes collapse with beloved high street firm’s CEO admitting in emotional statement ‘We had no choice’

The retailer filed notice of intention to appoint administrators last Thursday
Wilko had then held rescue talks with Gordon Brothers, Alteri and Opcapita
But Wilko has now collapsed into administration, putting 12,000 jobs at risk

Wilko has collapsed into administration today after emergency rescue talks failed to save the beloved high street retailer, putting 12,000 jobs at risk.

The chain, which had been owned by the Wilkinson family since it was established as a single hardware store in Leicester in 1930, has now appointed PwC to oversee the insolvency process.

Wilko stepped into the high street gap left by the collapse of Woolworths in 2008, but its sales had fallen below competitors Poundland, Home Bargains and The Range – who have been selling similar goods at lower prices.

Mark Jackson, the chief executive of Wilko, said in an emotional open letter this morning: ‘We left no stone unturned when it came to preserving this incredible business but must concede that with regret, we’ve no choice but to take the difficult decision to enter into administration.’

Mr Jackson, the former Bensons for Beds boss who only took over from Jerome Saint-Marc at Wilko in December, said the firm had ‘a significant level of interest’ but they were unable to close a deal in time.

The news is another blow for Britain’s beleaguered shopping districts, which have already seen sweeping closures caused by the pandemic and resulting cost-of-living crisis, with high-street favourites Iceland, Argos and Boots shutting scores of stores.

It comes after the troubled retailer, which suspended home deliveries yesterday, filed a notice of intention to appoint administrators last Thursday. This provided the family-owned business with 10 working days to find a buyer for all or part of the business as it battled to survive.

Empty shelves have been spotted in stores since that announcement, as shoppers rushed to buy the available stock.

High street retailer Wilko has collapsed into administration after emergency rescue talks fell through

PricewaterhouseCoopers (PwC) has now been appointed as an administrator, Wilko told staff

Wilko, known then as Wilkinson’s, started as a single hardware store 151 Charnwood Street in Leicester in 1930

The homeware and stationery chain had told online customers it was unable to deliver any orders, instead instructing shoppers to use its click and collect service or look for items in its stores.

The GMB union said the collapse was ‘entirely avoidable’. National officer Nadine Houghton said: ‘The 12,000 Wilko workers now facing potential redundancy will take little solace that with better management the situation that has befallen Wilko was, sadly, entirely avoidable.

‘GMB has been told time and time again how warnings were made that Wilko was in a prime position to capitalise on the growing bargain retailer market, but simply failed to grasp this opportunity.’

Wilko is the first major retail victim of Britain’s tougher economy, which has been hit by 14 consecutive interest rate rises since December 2021. Administrators will now seek out potential buyers for the firm’s store estate and its brand.

Elliot Green, an insolvency practitioner expert, told MailOnline that the hope for Wilko is that going into administration could help secure a future for the retailer.

The rise and fall of Wilko: From tiny family-run hardware store to High Street stalwart, Britain’s best-loved chain could finally close for good

Gordon Brothers, which rescued the Laura Ashley brand in 2020, was among those who held discussions over Wilko’s future before it plunged into administration.

The investors were considering a partnership with other financial investors to provide about £20 million of equity, while it would have provided around £50million in debt financing, a source told Sky.

But insiders had conceded at the time that there was a ‘relatively low’ chance a deal could be completed.

Wilko’s notice at the High Court last week came after it received indicative offers to help recapitalise, but none could provide enough liquidity in the time needed.

The privately-owned chain had been hunting for a buyer in recent months but came up short against a deadline for emergency cash at the end of this month.

Specialist turnaround investors Alteri and Opcapita had also been looking at potential offers – some of which would have kept Wilko out of administration. But again, hopes of a rescue deal had been deemed as unlikely.

The branch of Wilko in Didcot where the majority of shelves were almost empty of stock since the troubles were first announced

The GMB union said the collapse was ‘entirely avoidable’. Pictured: Wilko in Didcot with empty shelves

Wilko’s notice at the High Court last week came after it received indicative offers to help recapitalise, but none could provide enough liquidity in the time needed

Last year, Wilko agreed a deal to borrow £40million from restructuring specialist Hilco, which owns Homebase, after posting significant losses. The company agreed to amend the terms of a credit facility to bolster the availability of financing to Wilko.

Last Thursday, Wilko said it had ‘no choice’ but to file for the potential insolvency but would continue a possible rescue takeover.

Wilko CEO Mark Jackson’s open letter in full

‘Over the past six months wilko has been very open that we’ve been considering options to accelerate a turnaround plan given that we needed to make significant changes to the way we operate to restore confidence and stabilise our business. We left no stone unturned when it came to preserving this incredible business but must concede that with regret, we’ve no choice but to take the difficult decision to enter into administration.

‘We’ve a history steeped in serving customers and communities going back to 1930. Our founder JK Wilkinson started with a single hardware shop in Leicester and for over 90 years busy, hard-working families have come to us to get their household and garden jobs done quickly, simply and at the best value prices possible.

‘We thrived and successfully grew from one to 400 stores. We did this by listening to our customers – working out what they needed and then making sure we gave it to them. Whether it was recognising the demands for DIY products in the 1950’s, creating our first wilko product range in the 1970’s, launching online shopping in the 2000’s or being the first to sell 100% plastic-free wipes across our whole range.

‘Wilko is a business built on strong values. We started out in the great depression and the second world war, we’ve been there for our customers through highs and lows, recessions and coronations. Our loyal team members past and present have always been our biggest asset, our average length of service across our stores is 10 years and, in many places generations of team members have been on hand with advice or even just a friendly smile.

‘We recently remained open as an essential retailer during the Covid-19 pandemic, staying open to serve our communities when they really needed us the most.

‘The turnaround plan included a new Chair, bringing experience in retail turnaround situations and a newly refreshed and streamlined senior team. Since January and with the help of retail advisers and experts, we’ve been facing into problems and have seen real progress against many areas of our plan.

‘We’ve made significant savings across our cost base and have been considering various options based on advice given regarding our store costs. Alongside this we’ve continued to move forward with strategically accelerating our omnichannel offer, improving the digital customer experience and opening up new marketplaces for our great value wilko products.

‘We believe that wilko has distinct characteristics with over 50% of sales in wilko brand products (over 10,000), our value, local shopping locations and ever-expanding digital capabilities.

‘Significant work has been completed to streamline costs and transform the way the business operates and our robust turnaround plan, based on annualised cost savings would have delivered the most profitable wilko ever recorded within 24-months.

‘While we can confirm we had a significant level of interest, including indicative offers that we believe would meet all our financial criteria to recapitalise the business, without the surety of being able to complete the deal within the necessary time frame and given the cash position, we’ve been left with no choice but to take this unfortunate action.

‘I’d like to take this opportunity on behalf of the directors and the Wilkinson family to thank all of our customers, suppliers, partners and our hardworking team members across our stores, logistics and support centre who remained loyal to wilko. We’ve all fought hard to keep this incredible business intact but must concede that time has run out and now, we must do what’s best to preserve as many jobs as possible, for as long as is possible, by working with our appointed administrators.

‘It’s been an honour to have worked alongside you all as we fought to realise and to maximise the significant opportunities that existed to re-establish a profitable wilko.’

The first ever Wilkinson shop (pictured) on Charnwood Street, pictured in 1958 – 28 years after it opened

JK Wilkinson (pictured) opened the first shop with his fiance Mary Cooper. Reportedly, the pair got married at 8am on October 22, 1934, at St Peter’s Church in Highfields – and were back at the shop by 11am

Last Thursday, Wilko said it had ‘no choice’ but to file for the potential insolvency but would continue a possible rescue takeover

Pictured: Customers queuing up to buy budget-friendly goods at Wilkinson, believed to be in the 90s

‘Right now, we’re still here and we’re doing everything in our power to stay that way. Please pop down to your local store today… we’d LOVE to see you!’

Fears have been raised that the collapse of Wilko signals the largest retailer to go to the wall since newsagents chain McColl’s last year.

The High Street has also haemorrhaged household names such as Debenhams, Topshop owner Arcadia group and Mothercare owing to the shift to online shopping and side effects of pandemic lockdowns.

Official figures last month showed insolvencies in England and Wales surged to their highest level for 14 years in the second quarter of 2023 as firms were hit by tighter consumer budgets and rising borrowing costs.

Wilko, known then as Wilkinson’s, started as a single hardware store 151 Charnwood Street in Leicester 90 years ago.

The shop – known as ‘Old Charney’ was opened by JK Wilkinson and then Mary Cooper, who were engaged to be married at the time.

Reportedly, the pair got married at 8am on October 22, 1934, at St Peter’s Church in Highfields – and were back at the shop by 11am, such was their commitment. Since the couple opened the first shop, the business has remained in the Wilkinson family.

But last month it was revealed that struggles for the company had become so severe they were considering selling it. This would mean the high street giant would fall out of the family’s hands for the first time in nearly a century.

Revealed: All the towns and cities where Wilko stores are at risk of being axed

About 12,000 jobs across 400 stores are now hanging in the balance as struggling discount retailer Wilko is put into administration.

Aberdare

Abergavenny

Accrington

Acocks Green

Acton

Aldershot

Alfreton

Alnwick

Altrincham

Ammanford

Andover

Arnold

Ashford

Ashington

Ashton-Under-Lyne

Aylesbury

Ayr

Banbury

Barking

Barnsley (3 stores)

Barnstaple

Barrow In Furness

Barry

Basildon

Basingstoke

Bedford (2)

Bedminster

Belper

Beverley

Bexleyheath

Bicester

Biggleswade

Birkenhead

Birmingham (3)

Bishop Auckland

Bishops Stortford

Blackburn

Blackpool

Blackwood

Bletchley

Blyth

Bognor Regis

Bolton (2)

Bordon

Boston

Bournemouth (2)

Bradford

Brentwood

Bridgend

Bridgwater

Brigg

Brighouse

Bristol (3)

Bromley

Brownhills

Burgess Hill

Burnley

Burton Upon Trent

Bury

Bury St Edmunds

Camberley

Cambridge

Canterbury

Cardiff (3)

Carlisle

Carmarthen

Castle Douglas

Chatham

Chelmsford

Cheltenham

Chepstow

Chester

Chester Le Street

Chesterfield

Chippenham

Clacton On Sea

Cleethorpes

Cleveleys

Clowne

Clydebank

Coalville

Cockermouth

Colchester

Corby

Coventry (2)

Cowley

Cramlington

Crawley

Crewe

Cwmbran

Dagenham

Darlington

Dartford

Denton

Derby (3)

Dereham

Devizes

Dewsbury

Didcot

Doncaster (2)

Driffield

Droitwich

Dudley

Dunstable

Durham

East Ham

Eastbourne (2)

Eccles

Edinburgh

Ellesmere Port

Ely

Epsom

Exeter

Falkirk

Falmouth

Fareham

Farnborough

Ferndown

Folkestone

Gainsborough

Gateshead (2)

Gillingham

Gloucester

Gravesend

Grays (2)

Great Malvern

Great Yarmouth (2)

Greenock

Greenwich

Grimsby (2)

Halesowen

Halifax

Hamilton

Hanley

Harlow

Harrow

Hartlepool

Havant

Haverfordwest

Hayes

Hemel Hempstead

Hereford

High Wycombe

Hinckley

Hitchin

Holyhead

Horsham

Hounslow

Hucknall

Huddersfield

Hull (2)

Huntingdon

Huyton

Ilford

Ilkeston

Ipswich

Irvine

Jarrow

Kenilworth

Kent (2)

Kettering

Kidderminster

Kings Lynn

Kingston Upon Thames

Kingston Upon Hull

Kingswood

Knowle

Lancaster

Leamington Spa

Leeds (7)

Leek

Leicester (5)

Leigh

Leighton Buzzard

Letchworth

Lewisham

Lichfield

Lincoln

Liverpool (3)

Livingston

Llandudno

Llanelli

London (9)

Long Eaton

Loughborough

Louth

Lowestoft

Luton

Maidenhead

Maidstone

Manchester (4)

Mansfield

Market Drayton

Market Harborough

Matlock

Melton Mowbray

Merthyr Tydfil

Middlesbrough

Middlesex

Mildenhall

Milton Keynes

Morriston

Motherwell

Neath

Nelson

Newark

Newbury

Newcastle

Newcastle Under Lyme

Newcastle Upon Tyne (3)

Newport

Newton Abbot

Newton Aycliffe

Newton-Le-Willows

North Shields

Northallerton

Northampton (3)

Northfield

Norwich

Nottingham (9)

Nuneaton

Oakham

Orpington

Oswestry

Pembroke Dock

Penge

Perry Barr

Peterborough (2)

Peterlee

Plymouth

Pontefract

Pontypool

Poole

Port Talbot

Porthmadog

Portsmouth

Preston (2)

Pwllheli

Rainham

Ramsgate

Reading

Redcar

Redditch

Redhill

Redruth

Retford

Rhyl

Ripley

Romford

Rotherham

Rowley Regis

Royal Kingston Upon Thames

Rugby

Rugeley

Runcorn

Rushden

Sale

Salford

Scarborough

Scunthorpe

Seaham

Selby

Sheffield (6)

Shipley

Shirley

Shrewsbury

Sittingbourne

Skegness

Skelmersdale

Slough

Solihull

South Shields

Southampton

Southend On Sea

Southport

Spalding

St Albans

St Austell

St Helens

Stafford

Stamford

Stevenage

Stockport

Stockton On Tees

Stoke-On-Trent

Stourbridge

Stratford

Strood

Stroud

Sunderland

Sutton

Sutton-In-Ashfield

Swanley

Swansea

Swindon (2)

Tamworth (2)

Taunton

Telford (2)

Thetford

Tipton

Torquay

Trowbridge

Truro

Uttoxeter

Uxbridge

Wakefield (2)

Wallasey

Walsall (2)

Walthamstow

Walton On Thames

Warrington

Washington

Waterlooville

Watford

Wellingborough

Wembley

West Drayton

West Ealing

Weston-Super-Mare

Weymouth

Whitehaven

Widnes

Wigan

Wimbledon

Winsford

Woking

Wolverhampton

Wood Green

Woolwich

Worcester

Workington

Worksop (2)

Worthing

Wrexham

Wythenshawe

Yeovil

York

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Wilko goes into administration after rescue deal hopes collapse