- Potential Deal by Gordon Brothers to Save Struggling Wilko Chain
- Wilko’s Financial Troubles Put Up to 12,000 Jobs at Risk
- Other Turnaround Investors Also Exploring Offers as Insolvency Looms
The Laura Ashley brand owner negotiates a deal to salvage the general retail company, threatening up to 12,000 jobs.
A retail speciality investor is mulling a bid to preserve Wilko, the family-owned firm on the brink of bankruptcy.
Gordon Brothers has funded British high-street companies like Laura Ashley. Wilko’s advisors are discussing a deal.
According to sources, an offer could entail Gordon Brothers providing funding to the retailer of general merchandise to implement a restructuring that would result in a significant number of store closures and job losses.
Wilko threatened 12,000 jobs with a notice of intention to appoint administrators this week.
According to sources, Gordon Brothers’ prospects of rescuing Wilko were “relatively low” on Tuesday.
According to a source, the company has expressed interest in forming a partnership with other financial investors to invest approximately £20 million in equity while providing approximately £50 million in debt financing.
Mark Newton-Jones, a former executive at Next, Very Group, and Mothercare who was appointed to manage Gordon Brothers’ European operations earlier this year, is in charge of the project.
Alteri and Opcapita, two additional turnaround investors, have been evaluating offers for Wilko in recent weeks. But it is deemed unlikely that they will do so before an insolvency proceeding.
PricewaterhouseCoopers, helping the family-owned retailer, may seek binding proposals within days of financial exhaustion.
If appointed administrator, PwC will try again to sell Wilko’s assets before liquidating them.
The owner of Homebase, Hilco, loaned £40 million to Wilko earlier this year and recently amended the parameters of the agreement to release millions of pounds to the chain to save its future.
Since 1930, the Wilkinson family, which founded the company, has owned Wilko.
It operates 400 stores, making it one of Britain’s largest privately owned retailers.
It has been affected by inflationary pressures and supply chain issues, similar to many other high street retailers.
Several large general merchandise chains have been approached about recapitalizing the business. But the likelihood of a transaction that goes beyond picking over the carcass of the business is now remote.
In recent months, it has been attempting to finalize a company voluntary arrangement (CVA) – a mechanism that would result in significant rent reductions at hundreds of stores while preventing any closures.
Mark Jackson, chief executive officer of Wilko, stated last week, “We will continue to progress discussions with interested parties to complete a transaction that preserves the business. And we will encourage those interested parties with whom we are in discussions to proceed quickly.
“We continue to believe that our robust turnaround plan, which includes significant re-stabilization cost savings, will deliver a profitable Wilko and maximize the significant opportunities we are aware of.”
