Wilko’s future hangs in the balance
Wilko, the high street chain that collapsed into administration earlier this month, could be saved after two rescue bids were submitted.
M2 Capital, a restructuring specialist that owns a string of upmarket hotels around the world, has submitted a bid worth £90m. The bid is being considered by Wilko’s administrators, PricewaterhouseCoopers (PwC).
The owner of HMV, Doug Putman, has also submitted a bid. Putman pledged to keep 350 of the stores trading under the Wilko brand and pay off £40m of debts. However, while talks are still ongoing with PwC, sources have claimed that Putman’s takeover is “unlikely”.
The future of Wilko hangs in the balance as PwC considers the two rescue bids. The decision they make will have a major impact on the 12,500 jobs that are at stake.
In a letter to staff, Wilko’s chief executive officer, Mark Jackson, said that the company had been “very open” about its financial difficulties in the past six months. He said that the company had been considering options to accelerate a turnaround plan, but had been unable to find a solution that would protect all jobs.
“We left no stone unturned when it came to preserving this incredible business,” Jackson said. “But with regret, we have no choice but to take the difficult decision to enter into administration.”
The GMB union, which represents thousands of Wilko staff, has called on PwC to prioritise saving jobs in any rescue deal. “12,500 jobs cannot be sacrificed for a few pence in the pound for creditors,” said Andy Prendergast, the national secretary of the GMB. “If there are viable bids that protect jobs, these have to be prioritised.”
The decision on Wilko’s future is expected to be made in the coming days.
What are the specific financial challenges that Wilko is Facing?
Wilko is facing a number of financial challenges, including:
Declining sales: Wilko’s sales have been declining for several years, due to a number of factors, including competition from online retailers and the rise of discount stores.
Increased costs: Wilko’s costs have been increasing, due to factors such as rising wages and rent.
High debt levels: Wilko has a high level of debt, which is making it difficult for the company to invest in its business and grow its sales.