Wilko handed a lifeline as rivals given 48 hours to make rescue offers

Wilko handed a lifeline as rivals given less than 48 hours to make rescue offers that could save the beleaguered high street retailer

  •  Wilko’s rivals have until Wednesday to submit any bids to take over the franchise

Wilko’s administrators have handed the ailing store a lifeline by announcing to its rivals they have until Wednesday to submit any bids to take over the franchise. 

Last week, the British high street institution announced it was winding up putting  400 shops and 12,500 jobs at risk. 

It is understood that administrators from PwC have set the deadline as they quickly seek to strike a deal which could save jobs.

Wilko is continuing to trade and has not announced any redundancies after formally entering insolvency last week.

The retailer’s chief executive Mark Jackson said last Thursday it had received ‘a significant level of interest’ but was ‘left with no choice but to take this unfortunate action’ after being unable to close a solvent sale.

Last Thursday, the high-street store announced it would be going into administration putting 12,500 jobs at risk

Wilko’s rivals have until Wednesday to submit any bids to take over the franchise

The administration process means that bidders are not expected to take on all the company’s liabilities, such as costly debts, as part of any deal.

It is understood Wilko held talks with private equity firms Gordon Brothers, which owns Laura Ashley, and Alteri, which owns Bensons for Beds, as it sought funding to keep it afloat before ultimately entering administration.

It is not clear if either party will enter the latest process to potentially buy the Wilko brand, stores or other assets.

Retail rivals could snap-up between 200 and 300 shops – but it’s not yet clear whether this would save the brand or just use the physical stores as their own.

According to those familiar with ongoing discussions two rival discount chains and financial backers have expressed interest.

Poundstretcher has ruled itself out of any potential rescue bid, according to The Sun. An insider at the company – which plans to open 50 new stores this year – said Wilko’s business model is ‘unprofitable’.

Last year, Wilko agreed a deal to borrow £40million from restructuring specialist Hilco, which owns Homebase, after posting significant losses. It has confirmed it won’t be bidding, the FT reports.

The restructuring and refinancing firm previously rescued Clintons and Homebase out of administration. It also oversaw the liquidation process of both British Home Stores and Woolworths.

Union bosses have slammed the retailer’s management and admitted the situation was ‘sadly, entirely avoidable’.

The chain paid out a total of £77 million to the owners and former shareholders of the stricken retail chain in the decade before its collapse, The Mail on Sunday revealed yesterday. 

Windfall: Analysis of Wilko’s accounts shows that multi-million pound dividends continued even as the company headed for the rocks

Wilko was controlled by descendants of the founder, James Kemsey Wilkinson.

READ MORE: Wilko paid out £77m to owners before collapse 

The biggest payout was a £63 million jackpot in 2015 when – after 85 years of running the business together – one side of the Wilkinson family sold their shares to the other.

Karin Swann, a granddaughter of founder James Kemsey Wilkinson, quit the board leaving her cousin Lisa Wilkinson as chairman. Swann’s husband Peter was until recently the owner of Scunthorpe United, now in the sixth tier of the football league after a series of relegations.

Analysis of Wilko’s accounts shows that multi-million pound dividends continued even as the company headed for the rocks.

These included a £3 million dividend last year, which was paid despite Wilko racking up losses of £39 million. A total of £3.2 million was doled out in 2018 when Wilko slid to a £65 million loss.

Wilko’s failure has left the retirement fund with a multi-million pound shortfall and pensioners may end up with a reduced annual income for life. The scheme is likely to be bailed out by the Pension Protection Fund (PPF), the industry lifeboat. However, workers who have not yet retired could see their pensions reduced.

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