Wilko has gone into administration, putting 12,000 jobs at risk, after rescue talks failed to secure a buyer for the high street retailer.
The retailer, which sells everything from hardware goods, cleaning products and pick and mix, trades from about 400 stores across the UK and has an annual turnover of £1.2 billion. It has appointed PricewaterhouseCoopers (PwC) to oversee the administration process.
Wilko administration
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In an open letter to staff this morning, Wilko chief executive Mark Jackson said: “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.”
The troubled retailer suspended home deliveries yesterday, and administrators will now seek out potential buyers for the firm’s store estate and its brand.
Last week it filed a notice of intention to appoint administrators, which provided the company with 10 working days to find a buyer.
The GMB union said the firm’s collapse was “entirely avoidable”. National officer Nadine Houghton told the BBC: “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.”
Tania Clench, legal director in the restructuring and insolvency team at law firm Cripps, said employees might lose out financially: “Due to Wilko’s cash position, it doesn’t have enough to pay its debts as they fall due. The return to any creditors will depend entirely upon what is left in the pot after paying costs of the administration, secured and preferential creditors.
“This could have a significant impact on Wilko’s employees, who may find themselves in a position where they don’t receive the full amount they are owed because there’s simply not enough money to go around. The question of how much money they’ll lose out on depends entirely on what’s left in the pot.
“In regards to recovery of wages owed, these employees still lag behind secured creditors, such as banks. However, if made redundant down the road, they will have the best chance of getting their money back.”
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