Big bargain shop ‘could close branches’ in major shake up as high street struggles
A BIG bargain shop chain could close branches in a major shake up amid high street struggles.
Wilko is said to be considering potentially closing sites in a bid to cut costs.
The discount chain is looking at restructuring options and has approached financial advisors PricewaterhouseCoopers in recent weeks, .
It is said to be considering entering a company voluntary arrangement (CVA) which is a form of insolvency.
A CVA is a way for a business to restructure but continue to keep trading, but typically it closes some stores and negotiates rent costs down.
It comes after the company announced plans to close more than a dozen of its shops in January last year.
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Then in February 2023, it revealed it planned to cut over 400 jobs, including both store and head office roles.
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".
Mark Jackson, Wilko CEO said: “We announced the start of our turnaround programme to drive Wilko forward in January, complete with a new streamlined senior team and a strategic plan to first stabilise the business and then implement a growth strategy.
“We’re in the early stages of the turnaround and, as is usual, the directors continue to explore all options for wilko’s long-term future.
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“We’re confident with the right actions, we’ll continue to be a key feature on the British high street and expand our omnichannel offer, providing customers a place to shop all their household and garden needs.”
Directors can propose a CVA when their firm is experiencing difficulties in paying its debts.
It means the company is essentially entering into a legally binding agreement with its creditors, which could include suppliers or landlords.
It can give a company some breathing space or allow it to reorganise or restructure its funding and/or its operations with as little disruption as possible.
Back in 2019, card shop Clintons reported it was considering a CVA, it then told landlords it urgently needed to close 66 stores.
Mothercare carried out its first CVA in 2018, this resulted in a plan to close 55 shops - putting 900 jobs at risk.
Shoe shop Office also considered entering into a CVA amid struggles.
In 2020, coffee chain Caffe Nero launched a CVA to restructure its business and avoid store closures and job losses.
Wilko has around 400 stores across the UK and employs around around 16,000 workers.
It comes following a particularly tumultuous time for the UK high street with several popular chains including M&Co and Paperchase closing all stores in 2023.
Retailers 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 shopping online after the pandemic are also taking a toll and many high street shops have struggled to keep going.
Plus, home retailer Argos announced it will close all of its stores in the Republic of Ireland this year.
Wellies store Joules went under as well.
Shops aren't the only ones affected, major burger chain Byron Burger also fell into administration and closed nine restaurants immediately.
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In December, pub chain Wetherspoons announced it would be closing a total of 39 pubs after being hit by soaring inflation.
Here's the full list of shops and chains disappearing from the high street this year.
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