Wilko, the high-street retail chain established by the Wilkinson family in 1930, is contemplating a change in ownership to secure its future. Sky News has learned that advisors to Wilko have initiated discussions with potential buyers during the spring and summer of 2023.
Several large general merchandise chains have been approached for potential recapitalisation of the business, which may result in the Wilkinson family relinquishing majority control.
PricewaterhouseCoopers (PwC), which is advising Wilko, has been in talks with prospective financial investors to raise new equity and support the business through a complex restructuring process.
It is crucial for Wilko to secure additional capital at pace to address concerns about its future.
Exploring possibilities to recover and optimise potential
Wilko’s CEO, Mark Jackson, stated that the company is exploring all available options to rebound and maximise opportunities. A turnaround plan has been developed by an experienced management team to establish a profitable Wilko and generate significant returns with the necessary investment.
The company is actively engaging in external discussions in the UK and international markets to recapitalise through a combination of debt refinancing and equity release.
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Supply chain challenges and inflationary pressures have affected Wilko, along with other high street retailers. The company has been working on finalising a company voluntary arrangement (CVA) to secure rent reductions at its stores.
However, as Wilko pursues new funding, the implementation of a CVA has become increasingly uncertain.
Company at risk of entering administration
If the company fails to secure additional funding, it could face administration, according to a landlord interviewed by Sky News in early July 2023.
To support its operations, Wilko previously obtained a £40m loan from Hilco UK, a specialist retail investor and lender that also owns Homebase. In preparation for crucial discussions with landlords regarding rent reductions across its store estate, Wilko has enlisted property advisors from global property advisers CBRE.
As Wilko continues its efforts to secure new funding, the decision regarding the potential sale of a controlling stake in the company marks a significant turning point for the Wilkinson family and the future of the retail chain.