WILKO is in talks with the firm behind Laura Ashley to rescue the brand as it teeters on the brink of collapse.
Gordon Brothers, which specialises in restructuring retail businesses, is in talks to rescue the ailing high street brand, according to Sky News.
Hundreds of Wilko stores are at risk of closing as the retailer is on the brink of collapsingGetty
Sources told Sky that the owner of Laura Ashley could offer to fund a major restructuring plan to help save Wilko.
The brand is also in talks with several other buyers but there’s no indication as to whether any formal offer could be on the table.
Wilko filed for a notice of intent to appoint administrators last week on August 3.
A notice of intention essentially means Wilko has a 10-day window to secure a deal while it’s still protected from action by other creditors.
Wilko has 400 shops across the whole of the UK and employs around 12,000 people in total.
Gordon Brothers is a specialist in retail restructuring and helped rescue Laura Ashley from the brink of collapse.
The homeware brand was rescued by the firm and still operates in 48 Next stores across the country.
Gordon Brothers has also helped liquidate big brands that previously filed for bankruptcy in the US – including Bed Bath & Beyond and Hollywood Video.
However, there’s no guarantee that the talks between Gordon Brothers and Wilko will result in a deal.
Bosses were said to be exploring the sale of a controlling stake in the company just last month.
The retailer is being advised by PwC, and property agents CBRE have been brought on board to negotiate with landlords.
If Wilko does file for administration, all control of the business is passed to an appointed administrator.
So far, chain bosses haven’t revealed what will happen to all 400 shops and staff.
All sites will continue to operate as normal for now, and even if administrators are brought in, the stores could still keep going if the company is bought by someone else.
The company announced plans to close over a dozen of its shops in January last year.
Then in February 2023, it revealed it planned to cut over 400 jobs, including both store and head office roles.
Most recently in May, the discount chain was looking at restructuring options and approached financial advisors.
It was said to be considering entering a company voluntary arrangement (CVA) which is a form of insolvency.
Wilko, like many other high street retailers, is said to have seen a big drop in footfall and has “stopped performing to its full potential”.
Chains have been feeling the pinch since the pandemic while shoppers are cutting back on spending due to soaring inflation.
High energy costs and a shift to online shopping after the pandemic are also taking a toll and many brick and mortar shops have struggled to keep the lights on.
Numerous high street brands have collapsed into administration in the last 12 months.
Paperchase collapsed into administration at the end of January this year and all 106 stores have since closed for good.
Scottish clothing brand M&Co and wellies retailer Joules are among the familiar brands which went bust in 2022.
Shops aren’t the only ones affected, major burger chain Byron Burger also fell into administration and closed nine restaurants immediately.