12,000 jobs at risk as Wilko considers calling in administrators

After several weeks of attempting to find potential buyers for the business, Wilko is making significant strides toward its future.

Rumors circulated last month that numerous large general merchandise chains were being considered for a deal with Wilko.

The retailer, established in 1930 by JK Wilkinson and currently operating around 400 stores, has remained under the control of the Wilkinson family throughout its history.

Wilko expressed openness to “new approaches to recapitalize the business through a combination of refinancing options of debt and equity release to provide a stable platform to activate the next phase of the recovery.”

Earlier this year, discussions were held regarding an equity raise to recapitalize the business, with PricewaterHouseCoopers facilitating these talks.

The company was also exploring the possibility of a court voluntary arrangement to reduce its rent expenses.

All of these efforts were aimed at freeing up cash after Wilko faced challenges due to inflation and reduced consumer spending.

Wilko had already received a lifeline of £40m from turnaround specialist Hilco in January, followed by a £48m cash injection in November when it sold and leased back its Worksop distribution center.

Additionally, the company recently made a series of executive changes in order to improve its performance.

In December, the chief executive was forced out and replaced by turnaround specialist Mark Jackson, the former CEO of Bensons for Beds.

Sources indicate that the management change was prompted by Wilko’s lenders, who withheld an extension of the overdraft due to increasing interest rates.

In January, Chris Howell was appointed as the new chairman, having previously served as chairman at Bensons for Beds.

Mr. Jackson expressed confidence in the management’s turnaround plan, stating that it will lead Wilko to profitability.