The troubled budget retailer Wilko has called administrators, putting more than 12,000 jobs at risk after it failed to agree a rescue deal.
The family-owned household and garden products retailer, which has about 400 stores, is expected to have to close dozens of outlets, leaving big gaps on high streets after weeks of talks with interested parties.
Mark Jackson, the chief executive, said: “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.”
Jackson said talks had failed despite Wilko making a number of cost-cutting measures, which he claimed would have resulted in “the most profitable Wilko ever recorded within 24 months”.
Despite its problems, owners of the chain, led by the Wilkinson family, took £3m in dividends in the 12 months to the end of February 2022.
Nadine Houghton, national officer for the GMB union, which represents thousands of workers at Wilko, accused the firm’s management of allowing the retailer to lose its place in the market by failing to invest in technology for home shopping and other improvements while “much-needed cash was taken out of the business by the Wilkinson family when it was struggling”.
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.”
Administrators from PricewaterhouseCoopers, who were formally appointed on Thursday afternoon, said they would continue to seek a buyer for all or part of the business after their appointment.
The administrators said Wilko would continue to trade all stores without any immediate redundancies as discussions with interested parties continued. However, they said store closures and redundancies were likely to follow if no buyer was found.
They said that the business had encountered cashflow problems and a deterioration in trading amid “incredibly challenging trading conditions” through the pandemic and in the more recent cost of living crisis.