High street chain Wilko has collapsed into administration after failing to secure a rescue deal, putting about 12,000 jobs at risk.
The chief executive of Wilko has said the retailer was left with “no choice” but to enter into administration after leaving “no stone unturned” in efforts to revive the business.
The retailer, which sells everything from hardware goods to cleaning products and toys, trades from about 400 stores across the UK and has an annual turnover of 1.2 billion pounds ($1.53 billion).
In an open letter, Mark Jackson said: “Over the past six months Wilko has been very open 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.
“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.”
Wilko, which started as a single hardware store in Leicester, central England, in 1930 has grown to currently run around 400 stores and employ 12,000 workers.
It launched a turnaround plan earlier this year after its sales and shopper footfall came under pressure as consumer budgets were hammered by the rising cost of living.
Wilko said it saw “real progress” against many areas in its plan and made significant cost savings but was unable to improve its finances quickly enough to avoid insolvency.
Administrators will now seek out potential buyers for the firm’s store estate and its brand.
Nadine Houghton, national officer at the GMB union, 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.”
Wilko is the first major retail victim of Britain’s tougher economy, which has been hit by 14 consecutive interest rate rises since December 2021.
It is Britain’s biggest retail casualty since convenience store chain McColl’s in May last year. McColl’s was subsequently bought by supermarket group Morrisons.
It comes as the number of insolvencies in England and Wales surged to its highest level for 14 years as firms were hit by smaller consumer budgets and rising borrowing costs.
