Retail giant Wilko to continue seeking buyer after entering administration
Thu, 10 Aug 2023 | ADMINISTRATION
Prominent high street garden and homeware retailer Wilko has entered administration after failing to secure a rescue deal. The company, which was founded in 1930 and employs around 12,500 staff at approximately 400 stores, filed notice of intention to appoint administrators last week.
This gave the firm ten days to secure a rescue deal, but it was unable to find a buyer in this time and, as a result, PwC have now been appointed as administrators. PwC have said that the company’s stores will remain open without any immediate job losses while it continues to seek a buyer for all or parts of the company.
PwC’s Jane Steer, Zelf Hussain and Edward Williams have been appointed as joint administrators to Wilko Ltd, Wilko.com Ltd and Wilkinson Hardware Stores Ltd. If buyers are not found for some or all of the companies in the group then store closures and redundancies are likely.
Discussing the problems that the group has faced, joint administrator Edward Williams said: "Wilko is a household name both nationally and in the Midlands, having been established in Leicester and with head offices in Worksop. High street retailers are facing a number of well-documented challenges and Wilko has been significantly impacted by the headwinds facing the industry including inflationary pressure and rising interest rates.”
Williams added: "As administrators, we will continue to engage with parties who may be interested in acquiring all or part of the companies. Stores will trade as normal and staff will continue to be paid while the company is in administration."
In Wilko Ltd’s accounts for the year to January 29 2022, it reported that it had faced “continued challenges” during the year, including COVID-19, “severe and widespread” supply chain disruption and resource shortages its distribution centres, leading to a decline in performance.
The company’s total sales fell £42 million during the year to £1.2 billion, while EBITDA fell from £48 million to £15.6 million. Amid this sharp decline in sales, the company fell from a pre-tax profit of £5.5 million to a £38.7 million pre-tax loss. At the time, the company’s net assets were valued at close to £99.5 million.
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