Companies vying to buy Wilko have been given until Wednesday to make an offer for the homewares chain which fell into administration last week.
It is understood that Wilko’s administrator PwC has set a deadline to flush out serious bids for the firm.
Wilko, which has been trading since 1930, has more than 400 shops and employs 12,500 workers.
It is understood that private equity firms Alteri and Gordon Brothers may be interested in investing in Wilko.
It is not clear how many of Wilko’s shops could be rescued or if the Wilko name will be saved.
Gordon Brothers bought the Laura Ashley brand in 2020 when the company, famed for its floral designs, went into administration, which was handled by PwC.
Alteri Investors took ownership of Bensons for Beds in 2020 through a deal also overseen by PwC.
Wilko was put into administration after failing to secure £75m in funding. The firm’s chief executive, Mark Jackson, said last week it had been working for the past six months on a turnaround plan “to restore confidence and stabilise our business”.
“We left no stone unturned when it came to preserving this incredible business,” he said.
However, he conceded “with regret” that there was “no choice” but to put the company into administration.
For the moment, Wilko’s shops remain open and its staff continue to be paid in full.
But stores have already begun advertising an “administration sale” and cutting prices.
As well as other retailers, turnaround specialists may come forward with offers by the Wednesday deadline, which was first reported by Sky News.
If an offer does not materialise, Wilko will be placed into liquidation and the business will be wound down.
Wilko’s administration is the biggest in retail since last year when McColl’s, the convenience store chain, filed and left 16,000 staff facing redundancy.
The company was bought by the supermarket Morrisons, which already had a trading relationship with McColl’s and all the jobs were initially saved. However, Morrisons later closed a number of shops, resulting in job losses.
Wilko had attempted to reduce costs and in February announced 400 job cuts.
PwC said that Wilko had been hit by “incredibly challenging trading conditions, both throughout the pandemic and more recently as it has felt the impact of the cost of living crisis, resulting in increasing cashflow pressure and a deterioration in trading”.
However, retail analysts said that rival discounters such as B&M, Home Bargains and The Range were able to offer the same products at lower prices.
Meanwhile, competitors had shifted away from the High Street, where Wilko has many shops, to retail parks which some find are more convenient, especially if people are shopping for bulkier products.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Rival discounters had focused on more popular retail park sites and had diversified product ranges more into food, which has added extra resilience with consumers seeking out grocery bargains amid the cost of living crisis.
“Ultimately the fierce headwinds of inflation and thunderous supply chain challenges proved to be the storm which it has been impossible to recover from.”
Mr Jackson said last week that the retailer had received “a significant level of interest, including indicative offers” to rescue the cash-strapped business.
But he said that “without the surety of being able to complete the deal within the necessary timeframe and given the cash position”, management was “left with no choice” other than administration.
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