Discount high-street retailer Wilko is reported to be considering a Company Voluntary Arrangement to cut costs, as well as the closure of stores.
High-street discounter Wilko is reportedly considering a CVA as a means of cutting costs as it continues to struggle in the retail landscape.
Bloomberg and Retail Gazette have reported that Wilko has approached advisors at PricewaterhouseCoopers International Limited (PwC) to ‘explore various restructuring options’. Among them is a CVA, which would allow Wilko to decrease costs by renegotiating agreements with its creditors and store landlords.
Mark Jackson, CEO, told Bloomberg: “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.”
In February, Wilko announced plans to cut more than 400 jobs, including assistant store managers, retail supervisors, head office managers and call centre workers, as it struggled to control costs. Supervisors in 150 of its stores, meanwhile, had their hours cut. Work at the retailer’s contact centre in Worksop, Nottinghamshire, has been outsourced to a company in South Africa.
At the time, Mark commented: “We’ve identified significant changes to the Wilko operating model to enable us to stabilise the business and then thrive again. This includes some proposed changes to our management structure at both our stores and head office. We’re fully supporting affected individuals. We know change will be unsettling to our team members and the wider business, and we’re acting swiftly to put in place the new organisational structure to stabilise and grow.”
And in January, Wilko secured a £40m funding lifeline from Homebase owner Hilco UK after it swung to a £36.8m loss in its last full-year results as a dip in consumer demand impacted trading. The retailer warned it could run out of cash by the end of 2023 if trading conditions deteriorated further.
Although Wilko announced earlier this year that it is to stop stocking toys in its stores, the company said it would continue to offer seasonal/outdoor toys at relevant times of the year.
