UK Retailer Wilko On Brink Of Collapse, 12,000 Jobs At Risk: Reports

Wilko on Thursday filed a "notice of intention" to do under administration, leaving its 12,000 jobs at risk, after the firm couldn't find enough required liquidity for recapitalization.

UK retail chain Wilko on Thursday filed a "notice of intention" to do under administration, leaving its 12,000 jobs at risk. Notably, Administration is a procedure for which a licensed insolvency practitioner (IP) is appointed to oversee and protect a business in the UK. According to reports, the discount homeware and hardware chain said it couldn't find enough required liquidity within the time for recapitalization. 

According to a Reuters report, Wilko employs around 12,000 people across its 400 stores in UK stores. 

The retailer's situation could mark it as one of the initial major casualties of Britain's challenging economic conditions, following the series of interest rate hikes that began in December 2021, the report noted.

Adding, despite the pressure on household incomes caused by rising interest rates and soaring inflation levels, the majority of high street chains have managed to sustain their trading performance relatively well throughout the year so far.

The company's Chief Executive Mark Jackson has said he hopes that Wilko will be bought. 

"We'll continue to progress discussions with interested parties with the aim of completing a transaction which preserves the business. We continue to believe that our robust turnaround plan, with significant re-stabilisation cost savings in progress, will deliver a profitable Wilko and maximise the significant opportunities that we know exist," Wilko CEO said, as per Sky News. 

On the other hand, retailers' employees will be at risk of losing jobs if no buyer can be found. The GMB trade union, which represents about 4,000 workers at Wilko, as per Reuters, said, "This is extremely concerning. Wilko's staff deserve reassurance that their jobs are safe."

As per the newest agency, Wilko has an annual turnover of 1.2 billion pounds ($1.5 billion) and competes with B&M. 

According to a report by The Financial Times, in 2022, the UK witnessed a surge in company insolvencies, reaching the highest level since the financial crisis in 2009. The Insolvency Service, a government agency handling bankruptcies and company liquidations, reported a total of 22,109 registered insolvencies in 2022, representing a significant 57 per cent increase compared to the previous year.

This rise in insolvencies was attributed to factors such as soaring inflation, rising interest rates, and a stagnating economy, which adversely impacted businesses across the country.