Potential buyers of stricken retailer Wilko will have to invest up to £70m to rescue the firm.
PwC, the discount chain’s advisors, is in talks with a rival discount retailer and two private equity firms as it seeks to find a buyer so Wilko can avoid collapse, The Sunday Times reported.
Mike Ashley’s Frasers Group and Hilco – a lender to Wilko – are not in talks to buy the firm.
The £70m needed to be invested raises questions whether it will be possible to secure a solvent sale of the business.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
Around £25m to £30m of the funds is needed to get stock flowing through to Wilko’s stores and an additional £40m to pay off debts to Hilco, although the firm is willing to continue lending to the retailer.
Wilko filed a notice of intention to appoint administrators this week. The retailer was already looking for a buyer and had received a “significant level of interest, including indicative offers that we believe would meet all our financial criteria to recapitalise the business”, according to CEO Mark Jackson.
It is continuing talks and Jackson urged interested parties to “move as fast as possible” in order to secure a solvent sale.
Click here to sign up to Retail Gazette‘s free daily email newsletter
2 Comments. Leave new
B&M did extremely well from the tactical appointment of Sir Terry Leahy who knew how to scale the business, create supply chain efficiencies and understand the customer.
Wilkinsons have some family left (never a good idea – with a few exceptions 2nd Gen family never tackle problems) and decided to hire someone to run it who is a very competent accountant.
The iead person in any retailer needs to be a ‘retailer’ someone who knows the customer, the experience, the market position and create the buzz to get people shopping in the stores. MJ is v likely a solid finance man but not a visionary. He doesn’t really know why a customer should go to Wilkos rather than Home Bargains.
I’m not understanding why Wilkos allowed B&M and Home Bargains to get such a lead on retail parks or why it didn’t move out of dying backstreet locations sooner?
I think anyone buying this is silly. Most of the stores are in places with dying footfall. If it was mainly retail park based it would be worth saving. Whoever takes it will just look forward to a slow lingering sales decline until cash runs out for good.
Really know how to cheer us all up don’t you Barry