UK retailer Wilko collapses, putting 12,000 jobs at risk

THOUSANDS of staff at low-cost retailer Wilko have been told that the chain has collapsed.

Wilko, which is privately owned and has about 400 stores, said on Thursday (Aug 10) that it had decided to enter insolvency proceedings after failing to turn around the UK company.

“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,” Mark Jackson, chief executive officer, said in an emailed statement.

Wilko previously appointed advisers at PricewaterhouseCoopers to find new funding, but potential buyers withdrew their interest in recent days. It has roughly 12,000 staff.

The budget chain, which sells everything from stationery to hardware, is expected to lodge an administration application at the High Court. Stores will stay open at least until the end of next week.

Jackson said that the company “must do what’s best to preserve as many jobs as possible, for as long as is possible”.

Wilko warned that it was at risk of insolvency on Aug 3 due to “mounting cash pressures”.

Jackson said at the time that the business lacked an offer that “provides the necessary liquidity.”

It secured a £40 million (S$68.7 million) lifeline from Hilco UK – the owner of Homebase – at the beginning of this year, citing supply chain disruptions and a sharp drop in footfall. 

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Wilko becomes the latest UK retailer to be hit by the pandemic and Britain’s subsequent cost-of-living crisis.

Fashion and homeware business Cath Kidston, online furniture brand Made.com, fashion chains Joules and M&Co all entered insolvency over the past year.

The GMB union blamed management for the potential loss of jobs.

“Much-needed cash was taken out of the business by the Wilkinson family even when it was struggling,” said Nadine Houghton, GMB national officer. BLOOMBERG