Wilko enters administration

It comes just a week after the household goods brand filed a notice of intention with the high court in the hopes the business would be able to secure additional investment. 

High street retailer Wilko has entered administration, with PwC appointed as its administrators.  In an open letter from the firm’s chief executive Mark Jackson, he said no stone was left unturned in its attempts to preserve “this incredible business but must concede that with regret, we’ve no choice but to but to take the difficult decision to enter into administration”.  

He added: “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.” 

Discussing the previous efforts made to return the business to a more stable financial footing, Jackson explained it went through a turnaround operation – which included the appointment of a new chair with experience of turnaround situations.  

He went on to explain: “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.” 

The business has yet to confirm the future of 12,000 workers redundancy. In response, the GMB union’s 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.

 
“Much needed cash was taken out of the business by the Wilkinson family even when it was struggling. GMB members have remained loyal and committed to Wilko, accepting pay cuts and cuts to terms and conditions to help the business stay afloat, yet, as late as last year £3m was taken from the business.

“All the while the technology to improve the Wilko home shopping offer was neglected, their place in the market lost and now 12,000 jobs are on the line.”