Wilko has suspended home delivery in its fight to avoid collapse

Wilko is scrambling to find a deal that will save it.

The website of a discount retailer said that the delivery service was “temporarily not available” and instructed online shoppers to order products instead using click-and collect.

Wilko is racing to find a buyer by a deadline of next week.

Homeware and Hardware chain filed on August 3 a notice to intent to appoint administrator due to “mounting financial pressures”, putting 12,000 jobs in danger.

The announcement started a 10-day process for the Leicester-based group to find a purchaser of all or a part of their business. The deadline for the announcement is August 17.

Gordon Brothers, the investment firm that bought Laura Ashley in 2020, has held discussions with Wilko’s advisers from PwC about a possible rescue deal which could save the business.

Wilko has been trying to reach out to potential customers for weeks.

Mark Jackson, chief executive of the company, said last week that there was a “significant amount” of interest in the struggling high-street staple. He also stated that indicative offers were made which met all the criteria for recapitalising the business.

Wilko, however, had struggled in finding a buyer who could provide “necessary liquidity” within a reasonable time frame given its cash shortage.

The retailer is facing increasing competition from discount chains such as B&M, Home Bargains, and inflationary pressures.

The Sunday Times reported that a potential buyer could inject up to £70m in order to guarantee suppliers continue to provide stock to Wilko stores.

If the rescue deal fails, Wilko could be sold via a prepackaged administration, resulting in store closures.

The retailer has reportedly borrowed an additional £5m last month from Hilco UK. Hilco UK is a restructuring specialist and owns Homebase, Cath Kidston and Cath Kidston.

In November last year, the company received an additional £48m in cash after selling and leasing back its Worksop distribution centre.

Since JK Wilkinson founded the company in 1930, the Wilkinsons have controlled the retailer. It operates 400 stores throughout the UK.

Mr Jackson stated: “We believe our robust turnaround plan with the significant cost reductions in progress will result in a profitable Wilko, and maximize the opportunities we know are there.”

Post Disclaimer

The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.

This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.

The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.