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'It's been an honour': Wilko thanks loyal customers as it plunges into administration with 12,000 jobs at risk
10 August 2023, 14:23 | Updated: 10 August 2023, 15:45
Wilko has told customers "it's been an honour" in an emotional letter from the discount store's boss as it plunged into administration.
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Some 12,000 jobs are now at risk after hopes of a rescue deal were dashed - 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.
Now, in a letter to customers, CEO Mark Jackson said: "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."
He said the company had been working on a turnaround plan that would have put wilko in its most profitable position ever "within 24 months".
Jackson also claimed "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".
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, which has said talks are still taking place with potential buyers.
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.
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.