Major bargain shop with 400 stores could be sold amid high street struggles | The Sun

Major bargain shop with 400 stores could be sold amid high street struggles | The Sun

July 21, 2023

A MAJOR bargain shop with 400 stores across the UK could be sold.

Wilko's owners are said to be exploring the sale of a controlling stake in the popular chain.

It comes amid efforts to cut costs and turnaround the business which has struggled as a result of fewer shoppers on the high street.

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 it remains privately owned.

The Wilkinson family hold the largest stake in the business, but could give this up to secure its future, according to the report.

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The discount chain, which has around 400 stores across the UK and employs around around 16,000 workers, is looking at restructuring options and is working with financial advisors PricewaterhouseCoopers.

Mark Jackson, Wilko chief executive, said: "We've been very open that we're exploring all the options available to rebound as a business and maximise the significant opportunities that we know exist.

"We have a clear and defined turnaround plan put together by a refreshed and experienced management team to re-establish a profitable Wilko that delivers significant return, accelerated by the investment needed.

"We are actively out across the UK and international markets continuing external conversations and welcoming new approaches to recapitalise the business through a combination of refinancing options of debt and equity release to provide a stable platform to activate the next phase of the recovery."

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One option on the table the shop has been looking at is a company voluntary arrangement (CVA) which is a form of insolvency.

A CVA is a way for a business to restructure but continue to keep trading, but typically it closes some stores and negotiates rent costs down.

According to Sky News Wilko's would not include store closures – but the CVA is looking less likely as it looks to secure new funding.

It comes after the company announced plans to close more than a dozen of its shops in January last year.

Then in February 2023, it revealed it planned to cut over 400 jobs, including both store and head office roles.

Wilko, like many other high street retailers, is said to have seen a big drop in footfall and has "stopped performing to its full potential".

Retailers have been feeling the pinch since the pandemic while shoppers are cutting back on spending due to soaring inflation.

High energy costs and a shift to shopping online after the pandemic are also taking a toll and many high street shops have struggled to keep going.

Numerous high street brands have collapsed into administration in the last 12 months.

From the Scottish clothing brand M&Co to wellies store Joules, a number of familiar brands went bust in 2022.

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Major burger chain Byron Burger fell into administration in January and immediately shut all nine restaurants.

Paperchase then collapsed into administration at the end of the same month and all 106 stores have since closed for good.

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