Gordon Brothers weighs rescue bid for ailing retailer Wilko
A specialist investor in struggling retailers is exploring a bid to rescue Wilko, the ailing family-owned chain which is teetering on the brink of collapse.
Sky News has learnt that Gordon Brothers, which has backed British high street names including Laura Ashley, is in talks with Wilko’s advisers about structuring a potential deal.
Sources said that an offer could involve Gordon Brothers providing funding to the general merchandise retailer to implement a restructuring that would involve significant numbers of store closures and job losses.
Last week, Wilko confirmed that it was filing a notice of intention to appoint administrators, putting as many as 12,000 jobs at risk.
Insiders said on Tuesday that the chances of Gordon Brothers reaching a deal to rescue Wilko were “relatively low”.
One source said the firm had expressed an interest in partnering with other financial investors to inject about £20m of equity, while it would provide around £50m in debt financing.
The project is being overseen by Mark Newton-Jones, the former Next, Very Group and Mothercare executive who was appointed to lead Gordon Brothers’ European operations earlier this year.
Alteri and Opcapita, two other specialist turnaround investors, have also been examining offers for Wilko in recent weeks but are regarded as unlikely to do so ahead of an insolvency process.
PricewaterhouseCoopers, which is advising the family-owned retailer, is understood to be seeking binding offers within days, with the company close to running out of cash.
If it is appointed as administrator, PwC will run a further sale process before embarking on a liquidation of Wilko’s assets if no deal is forthcoming.
Hilco, the owner of Homebase, lent £40m to Wilko earlier this year and recently amended the terms of the agreement to release millions of pounds of funding to the chain in an attempt to help salvage its future.
Wilko has been owned by the Wilkinson family, which established the business, since 1930.
It trades from 400 stores, making it one of the biggest privately owned retailers in Britain.
Like many high street retailers, it has been hit by inflationary pressures and supply chain challenges.
A number of large general merchandise chains have been approached about recapitalising the business, although the prospects of any deal beyond picking over the carcass of the company now seem remote.
In recent months, it has been seeking to finalise a company voluntary arrangement (CVA) – a mechanism that would trigger steep rent cuts at hundreds of stores but avoid any closures.
Mark Jackson, Wilko chief executive, said last week: “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.”
Gordon Brothers has been approached for comment.