PwC selected for Wilko administration

16 August 2023 Consultancy.uk 2 min. read
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UK high-street stalwart Wilko has fallen into administration, after an extended period of poor trading. According to administrators from PwC, no redundancies have been made yet, but if a buyer is not identified then the company could be liquidated.

Founded as Wilkinson in 1930,  in 1932, the department store rebranded as Wilko in 2012. In 2022, the organisation had around 408 locations across the UK, but had been in a state of decline for some time. As the UK’s bricks-and-mortar retailers continue to contend with a shift of trade to e-commerce vendors, Wilko has been consistently downsizing operations for the best part of a decade.

In 2017, for example, Wilko began negotiations with the GMB trade union over the company's plan to cut 4,000 jobs – even as the board paid the family owners a £3m dividend. At the start of 2022, Wilko also announced the closure of 15 stores with more expensive long leases, having struggled throughout the lockdown era. Again, it was reported that Wilko paid its owners – led by the Wilkinson family – £3 million.

PwC selected for Wilko administration

Through 2023, this was followed with measures such as the cutting of up to 400 jobs and taking out a £40 million loan to try and keep operations afloat. When the situation deteriorated, however, Wilko announced its intention to bring in administrators in the summer, as it sought a buyer following a period of difficult trading conditions.

In early August, PwC was appointed to oversee the administration process. A spokesperson from PwC explained that Wilko had been hit by "incredibly challenging trading conditions, both throughout the pandemic and more recently as it has felt the impact of the cost of living crisis”.

The statement said, "Initially, Wilko will continue to trade all stores without any immediate redundancies as discussions with interested parties continue. If buyers for some or all of the group are not found, it is likely that store closures and redundancies will follow."

Discussions had been held with potential buyers, including Laura Ashley owner of Gordon Brothers, Bensons for Beds owner Alteri, and OpCapital. While no preferred bidders have been selected yet, Gordon Brothers and Alteri both have purchased firms from PwC administrators in recent years.

Gordon Brothers bought the Laura Ashley brand in 2020 when the fashion company went into administration, which was handled by PwC. Meanwhile, Alteri Investors took ownership of Bensons for Beds in 2020, through a deal also overseen by PwC.