Island Green: Wilko falls into administration

Retail chain Wilko has fallen into administration as rescue talks with private equity firms and rival retailers fail to reach a solution.

The company, which has a store on Island Green, employees around 12,000 people at its 400 stores across the UK.

Wilko had been engaged in negotiations with various firms, including Laura Ashley-owner Gordon Brothers, Bensons for Beds-owner Alteri, and OpCapita about a potential rescue deal via a company voluntary arrangement (CVA).

In an open letter to Wilko staff and customers, the company’s CO, Mark Jackson, detailed the efforts made to prevent the business from entering administration and expressed regret at the necessary decision to do so.

Over the past six months, Wilko has explored various options to accelerate a turnaround plan, aiming to make significant changes to restore confidence and stabilise the business.

Despite these efforts, the administration had become inevitable, Jackson said.

He recalled the history of Wilko, which started as a single hardware shop in 1930 and grew to 400 stores.

Jackson emphasised that a turnaround plan could have resulted in the most profitable Wilko ever within 24 months, but the lack of surety in completing the necessary deals and the company’s cash position left no choice but to enter administration.

He thanked customers, suppliers, partners, and team members for their “loyalty and commitment,” stressing the efforts to preserve jobs by working with appointed administrators.

The situation has drawn sharp criticism from the GMB Union.

Nadine Houghton, GMB National Officer, stated that the problems faced by Wilko were “sadly, entirely avoidable.”

She 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.”