The budget retailer Wilko formally called in administrators on Thursday, after talks to secure rescue funding failed. So what does this move mean for its more than 12,000 staff and loyal customer base.
What does going into administration mean?
The day-to-day running of the retailer has now been temporarily transferred to the court-appointed administrator, in this case, PricewaterhouseCoopers. There have been no immediate store closures or redundancies and the chain will continue to trade as normal while PwC tries to sell at least part of the business as a going concern.
It is not clear whether a serious buyer remains for a large number of stores but industry observers expect dozens – if not hundreds – of Wilko’s 400 outlets to close.
Will staff still be paid?
The administrators are running the stores at present and staff will be paid as normal. There are still hopes that a core Wilko’s chain could be saved but anticipated store closures may lead to job losses in the next few weeks.
What about refunds?
Wilko will continue to accept returns or exchanges as normal from 10 August until further notice.
I have a gift card – can I still spend it?
Gift cards are still being accepted but it is probably best to spend it as soon as possible given that at least some stores may close soon.
How can I reach customer services?
The group’s customer helpline and chat service is suspended but administrators plan to restart them. Wilko’s Twitter account, @LoveWilko, does appear to be responding to queries.
Can I buy online?
Online deliveries are suspended but it is possible to buy items online for pickup in a store.
Are stores still being restocked?
Stock is still flowing into stores from warehouses, although it is understood that some suppliers have stopped sending in goods.
The administrators are understood to be aiming to reach agreement with suppliers to keep stores trading while they try to find a buyer.
What happens to the pensions?
Anyone already collecting a pension will continue to get their payments as usual. For those workers in the defined benefit scheme, their pension savings pot is now being assessed by the Pension Protection Fund (PPF), the industry-funded lifeboat for schemes that go bust.
It will look at whether the scheme has sufficient funds to support itself or needs to enter the PPF.
If it does, those who are past pension age – even if they are still working – will get 100% of what they are owed. The rest will get 90% of what they are owed.
Who might buy Wilko and what will remain?
Interested parties have included the Homebase owner, Hilco, the Bensons for Beds owner, Alteri, and the Laura Ashley owner, Gordon Brothers, as well as the finance group OpCapita. More than one retail group is also reported to have cast its eye over the chain. However, it is tricky to finance deals to buy retailers at the moment as banks are not optimistic about the sector’s prospects and interest rates on any debt required are high.
Any buyer, should it emerge, is likely to want to close a large number of stores and cut costs dramatically. It is likely to be easier for a trade buyer to take it on, but it’s not clear who that could be.
Mike Ashley’s Frasers Group, which has bought up a number of struggling retail brands, is not thought to be interested. There could be potential for a group such as Poundland, which operates in similar kinds of locations, to take Wilko on, but it is unlikely to want more than a small group of stores.
