High street chain Wilko said it has appointed administrators after failing to secure a rescue deal, putting about 12,000 jobs at risk.
The chain, which runs more than 400 stores across the UK, including ten in Scotland, told staff on Thursday that it has hired administrators from PwC to oversee the process.
Mark Jackson, chief executive officer of Wilko, said the firm had “a significant level of interest” but was “left with no choice but to take this unfortunate action” after being unable to close a deal within time.
In a letter, Mr Jackson said: “Over the past six months Wilko has been very open that we’ve been considering options to accelerate a turnaround plan given that we needed to make significant changes to the way we operate to restore confidence and stabilise our business.
“We left no stone unturned when it came to preserving this incredible business but must concede that with regret, we’ve no choice but to take the difficult decision to enter into administration.
“We’ve all fought hard to keep this incredible business intact but must concede that time has run out and now, we must do what’s best to preserve as many jobs as possible, for as long as is possible, by working with our appointed administrators.”
Last week, the boss of the homeware and hardware chain said it is expected to enter insolvency after failing to secure a takeover to help the business with “mounting cash pressures”.
It was confirmed on Thursday that administrators had been appointed.
Last year, the retailer agreed a deal to borrow £40m from restructuring specialist Hilco after posting significant losses.
The GMB union has said that the situation was “entirely avoidable”.
Nadine Houghton, GMB national officer, said: “The 12,000 Wilko workers now facing potential redundancy will take little solace that with better management the situation that has befallen Wilko was, sadly, entirely avoidable.
“GMB has been told time and time again how warnings were made that Wilko was in a prime position to capitalise on the growing bargain retailer market, but simply failed to grasp this opportunity.
“Much needed cash was taken out of the business by the Wilkinson family even when it was struggling. GMB members have remained loyal and committed to Wilko, accepting pay cuts and cuts to terms and conditions to help the business stay afloat, yet, as late as last year £3m was taken from the business.
“All the while the technology to improve the Wilko home shopping offer was neglected, their place in the market lost and now 12,000 jobs are on the line.”
More to follow.