Wilko, the high-street homeware retailer, has collapsed into administration, putting 12,000 jobs at risk.
On August 3rd, the retailer filed a notice of intent (NOI) at the high court to appoint administrators, giving it 10 days to find investors, which it failed to secure.
This is despite specialist retail investor Hilco providing funding to Wilko in late July.
Wilko’s difficulties are longstanding as it recorded sales declines in each of its last four financial years, with revenue falling by 18.6% between its FY2017/18 and FY2021/22.
It also recorded a £35.9m operating loss in its FY2021/22, which more than counterbalanced operating profits from the previous four financial years.
That Wilko has struggled when the economic conditions and consumer mindset play into its value offer reiterates how far it has fallen behind its competitors.
Matt Walton, Senior Data Analyst at leading data and analytics company GlobalData, comments: “Wilko has been caught in a pincer movement on price and design. It has been outflanked on price by the likes of B&M, Home Bargains and The Range while it is unable to compete on design with the likes of Dunelm or IKEA.”
As reported by the BBC, Wilko’s boss, Mark Jackson, said management had “left no stone unturned” in its attempts to save the business and avoid administration.
“But we must concede that with regret, we’ve no choice but to take the difficult decision to enter into administration.”
Wilko’s 400 shops will remain open for the time being with staff continuing to be paid.
City law firm DH Stallard partner Michael Lynch comments: “Parties interested in purchasing Wilko prior to its administration will now find a more attractive business to purchase, without its previous debt burden and reported capitalisation requirements.”