Wilko collapses into administration as 400 shops and 12,000 jobs at risk after last-minute rescue talks collapse

10 August 2023, 10:32 | Updated: 10 August 2023, 11:10

Wilko has collapsed into administration after hopes of a rescue deal were dashed.

Some 12,000 jobs are now at risk - as Wilko, owned by the Wilkinson family since it was established as a single hardware store in 1930, becomes one of the biggest retail casualties in years.

The discount store had been in talks with Gordon Brothers, the owner of Laura Ashley, but the chances of a funding deal were considered low.

It was negotiating with its landlords with the help of PricewaterhouseCoopers.

Wilko stopped processing online deliveries on Wednesday, with customers only able to access click and collect.

The chain, which has 400 outlets across the country, filed a notice of intent to appoint administrators, kickstarting a 10 day window to arrange a deal, on August 3.

Announcing the administration this morning, chief executive Mark Jackson said: "Over the past six months we've been open with all our stakeholders including our team members 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.

"I'd like to take this opportunity on behalf of the directors and the Wilkinson family to thank all of our customers and our hardworking team members across our stores, logistics and support centre who remained loyal to wilko.

"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."

Read more: Ailing high-street chain Wilko in 'rescue bid' talks with specialist investor Gordon Brothers

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.

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.

The following day Wilko posted a message on social media thanking customers for their support, saying: 'Thanks for all the love! We're humbled by the amount of love you've sent our way after the news this week.

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.