By Emily Hawkins
Discounter Wilko is urgently attempting to secure a £30m cash injection, amid retail’s critical golden quarter trading period ahead of Christmas.
The high street chain, which operates 402 shops, is in emergency talks with alternative lenders over rescue cash, off the back of a dramatic leap in interest rates.
This could result in credit extended at higher rates of interest or in exchange for security over Wilko’s assets.
The Worksop head-quartered retailer, which employs 16,000 people, has been unable to agree to an extension of its revolving credit facility.
Its relationship with lenders was healthy, according to Wilko chief executive Jerome Saint-Marc, who was quoted in The Sunday Times,
“We’re taking this opportunity to review how we manage our ongoing financing to best trade through the current retail environment while continuing to invest in our future,” he said.
Earlier this autumn, the retailer shook up its rent payments schedule in a bid to conserve cash, telling landlords it would unilaterally pay its quarterly rent bill in monthly instalments.
While the firm reaped the rewards of being deemed an essential shop during the pandemic, with stores allowed to stay open throughout Covid, Wilko has come up against supply-chain woes and high freight costs.
It posted pre-tax profit of £4.4m for the year to January 2021, after raking in £1.36bn in sales.
High street budget brands are primed to entice new customers amid the cost of living crunch, with bosses at Wilko rival B&M expressing confidence in their business models in the economic downturn.
B&M said it would “expect to retain many of these consumers into any economic recovery,” echoing the optimism of discount grocers Aldi and Lidl, earlier this month.
The firm was founded by James Kemsey Wilkinson in 1930 and has gown from one site in Leicester to around 400 stores across the country today.
The company rebranded from Wilkinson to Wilko in 2014 as it ploughed ahead with a multichannel restructuring and introduced click-and-collect in stores.
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