Budget retailer Wilko has entered administration after failing to secure a rescue deal, putting around 12,000 jobs in jeopardy.
The chain, which runs more than 400 stores across the UK, 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.”
The retailer was founded as a hardware shop in Leicester 1930, but quickly expanded across the UK, growing into other markets such as garden products and stationery.
Wilko has grown to currently run around 400 stores and employ 12,000 workers.
It launched a turnaround plan earlier this year after its sales and shopper footfall came under pressure as consumer budgets were hammered by the rising cost of living.
Wilko said it saw “real progress” against many areas in its plan and made significant cost savings but was unable to improve its finances quickly enough to avoid insolvency.
Administrators will now seek out potential buyers for the firm’s store estate and its brand.
Nadine Houghton, national officer at the GMB union, 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.”
You may also like: Former Tory advisor says ‘full privatisation’ is the only way to fix NHS