You could sell a BIG discount store with 400 stores across the UK.
Wilko’s owners are reportedly exploring the possibility of selling a majority stake in the popular chain.
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Wilko is said to be considering selling the businessCredit: Getty
It comes amid efforts to cut costs and revive business that has struggled due to fewer high-street shoppers.
The retailer is looking to raise tens of millions of pounds in new funding, Sky News reports.
Wilko was founded in 1930 by James Kensey Wilkinson and is still privately owned.
The Wilkinson family has a majority stake in the business but may sell it to secure its future, according to the report.
The discount chain, which has some 400 stores across the UK and employs around 16,000 workers, is considering restructuring options and is working with financial advisers PricewaterhouseCoopers.
Mark Jackson, Chief Executive Officer of Wilko, said: “We have been very open and are exploring all available options to get the business back on track and maximize the significant opportunities that we know exist.
“We have a clear and defined turnaround plan drawn up by a renewed and experienced management team to restore a profitable Wilko that delivers significant returns, accelerated by the investment required.
“We are actively in the UK and international markets continuing external discussions and welcome new approaches to recapitalize the business through a combination of debt refinancing and equity release options to provide a stable platform to trigger the next phase of the recovery.”
One of the options on the table that the store has been considering is a company voluntary arrangement (CVA), which is a form of insolvency.
A CVA is a way that a business can restructure but continue to operate, but typically closes a few stores and negotiates a reduction in rental costs.
According to Sky News, Wilko’s would not imply any store closures, but a CVA seems less likely as it appears poised to secure fresh funding.
This comes after the company announced plans to close more than a dozen of its stores in January of last year.
It then revealed in February 2023 that it planned to cut more than 400 jobs, including store and head office positions.
Wilko, like many other retailers, reportedly experienced a huge drop in traffic and “stopped reaching its full potential.”
Retailers are feeling the pinch of the pandemic, while shoppers are cutting back on spending due to rising inflation.
High energy costs and the post-pandemic shift to online shopping are also taking their toll, with many high street stores struggling to stay in business.
Several major brands have fallen into administration in the past 12 months.
From Scottish clothing brand M&Co to department store Joules, several famous brands have failed in 2022.
The big hamburger chain Byron Burger went into administration in January and immediately closed all nine restaurants.
Paperchase then went into administration at the end of the same month and all 106 stores have since closed for good.
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Source: newstars.edu.vn