Investor Gordon Brothers who rescued Laura Ashley is in talks over bid to save Wilko as struggling retailers teeters on brink of collapse
- US firm allegedly in talks over structuring a potential deal with Wilko’s advisers
- Move comes days after Wilko filed notice of intention to appoint administrators
A specialist investor in struggling retailers is exploring a bid to rescue Wilko, it was claimed today as the discount homeware chain remains on the brink of collapse.
Gordon Brothers is now said to be in talks over structuring a potential deal with advisers for family-owned Wilko, which has about 400 shops and 12,000 staff.
The move by the US liquidation and restructuring firm, which rescued Laura Ashley in 2020, comes days after Wilko filed a notice of intention to appoint administrators.
Wilko’s notice at the High Court last week came after it received indicative offers to help recapitalise, but none could provide enough liquidity in the time needed.
The privately-owned chain had been hunting for a buyer in recent months but came up short against a deadline for emergency cash at the end of this month.
But news of a rescue bid was revealed by Sky News today amid claims from sources that Gordon Brothers could provide funding to Wilko to ‘implement a restructuring that would involve significant numbers of store closures and job losses’.
Homeware chain Wilko is teetering on the brink of collapse, putting around 12,000 jobs at risk
Last Friday, Wilko posted a message on social media thanking customers for their support
Gordon Brothers is said to have looked at partnering with other financial investors to put in about £20million of equity and provide £50million in debt financing.
READ MORE: The rise and fall of Wilko: From tiny family-run hardware store to High Street stalwart, Britain’s best-loved chain could finally close for good after 90 years of providing families their everyday essentials from lightbulbs to pick n mix
But insiders also conceded to the broadcaster that there was a ‘relatively low’ chance that Gordon Brothers could actually complete a deal to rescue Wilko.
Two other specialist investors, Alteri and Opcapita, are also said to have been considering offers for Wilko – but are viewed as unlikely to complete a deal.
Earlier this year Wilko hired advisers from PricewaterhouseCoopers in a bid to find to a buyer in order to secure fresh funding to keep the firm trading.
Last year, the retailer agreed a deal to borrow £40million from restructuring specialist Hilco, the owner of Homebase, after posting significant losses.
Wilko said last week it had ‘no choice’ but to file for the potential insolvency but will continue a possible rescue takeover.
Last Friday, Wilko then posted a message on social media thanking customers for their support, saying: ‘Thanks for all the love! We’re humbled by the amount of love you’ve sent our way after the news this week.
‘Right now, we’re still here and we’re doing everything in our power to stay that way. Please pop down to your local store today… we’d LOVE to see you!’
Fears have been raised that the collapse of Wilko would signal the largest retailer to go to the wall since newsagents chain McColl’s last year.
In recent years the High Street has been struggling with painful cost increases, while shoppers’ budgets have been restricted by high inflation levels.
The High Street has also haemorrhaged household names such as Debenhams, Topshop owner Arcadia group and Mothercare owing to the shift to online shopping and side effects of pandemic lockdowns.
American liquidation and restructuring firm Gordon Brothers rescued Laura Ashley in 2020
Gordon Brothers is based in Boston but has London offices in this building in Hanover Square
Official figures last month showed insolvencies in England and Wales surged to their highest level for 14 years in the second quarter of 2023 as firms were hit by tighter consumer budgets and rising borrowing costs.
READ MORE Full list of Wilko stores at risk of closing down as High Street retailer on brink of administration – check if your town is affected
MailOnline contacted Wilko for comment today, but were told the company had no further statement beyond what was shared in last week’s announcement.
In that statement, Wilko chief executive Mark Jackson said: ‘While we can confirm we’ve had a significant level of interest, including indicative offers that we believe would meet all our financial criteria to recapitalise the business, at present we don’t today have an offer that provides the necessary liquidity in the time we have available, given the mounting cash pressures we’re faced with.
‘Unfortunately, with this in mind, today we’re having to take the difficult decision to file a notice of intention.
‘We’ll continue to progress discussions with interested parties with the aim of completing a transaction which preserves the business and will encourage those interested parties we’re in discussions with to move as fast as possible.
‘We continue to believe that our robust turnaround plan, with significant re-stabilisation cost savings in progress, will deliver a profitable Wilko and maximise the significant opportunities that we know exist.’
Speaking last week about the threat to jobs at Wilko, Andy Prendergast, national secretary at the GMB union, said: ‘This is extremely concerning but we remain hopeful that a buyer can be found. Wilko’s staff deserve reassurance that their jobs are safe. We hope this is the number one priority going forward.’
MailOnline contacted Gordon Brothers for comment today.
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