The Potential Deal to Salvage Laura Ashley and Wilko
The owner of the Laura Ashley brand is currently in talks about a potential deal to salvage the general merchandise chain, which could put up to 12,000 jobs at risk, according to sources at 4Press.biz. The struggling family-owned chain, Wilko, is also in discussions with specialist investor Gordon Brothers to explore a bid for its rescue.
Gordon Brothers, known for backing British high street names like Laura Ashley, is considering providing funding to Wilko to implement a restructuring plan that may involve significant store closures and job losses. Last week, Wilko confirmed that it was filing a notice of intention to appoint administrators, putting thousands of jobs at risk.
While the chances of Gordon Brothers reaching a deal to rescue Wilko are considered “relatively low,” the investor has expressed interest in partnering with other financial investors to inject £20 million of equity and provide around £50 million in debt financing. Mark Newton-Jones, the former executive of Next, Very Group, and Mothercare, is overseeing the project as the head of Gordon Brothers’ European operations.
Other specialist turnaround investors, Alteri and Opcapita, have also been examining offers for Wilko in recent weeks. However, it is unlikely that they will make a move before an insolvency process is initiated. PricewaterhouseCoopers (PwC), the advisor to Wilko, is seeking binding offers within days as the company is running out of cash. If appointed as administrator, PwC will run a further sale process and consider liquidation if no deal is reached.
Wilko, owned by the Wilkinson family since 1930, operates 400 stores, making it one of the largest privately owned retailers in Britain. Like many high street retailers, it has faced challenges due to inflationary pressures and supply chain issues. Several general merchandise chains have been approached about recapitalizing the business, but the prospects of a deal seem remote at this point.
Hilco, the owner of Homebase, lent £40 million to Wilko earlier this year and recently amended the terms of the agreement to release additional funding in an attempt to salvage the company’s future.
Wilko’s CEO, Mark Jackson, stated that they are continuing discussions with interested parties to complete a transaction that will preserve the business. He believes that their robust turnaround plan, along with cost savings, will lead to a profitable Wilko and maximize existing opportunities.
Gordon Brothers has been approached for comment.
Conclusion
The potential deal to salvage Laura Ashley and Wilko is currently being explored by specialist investor Gordon Brothers. While the chances of a successful rescue are uncertain, the investor is considering providing funding for a restructuring plan that may involve store closures and job losses. Other turnaround investors have also shown interest, but a deal is unlikely before an insolvency process is initiated. Wilko, a family-owned chain, is facing financial difficulties due to inflationary pressures and supply chain challenges. The company is seeking binding offers within days, and if no deal is reached, liquidation may be considered. Despite the challenges, Wilko’s CEO remains optimistic about the company’s future and believes in their robust turnaround plan. The outcome of these discussions will determine the fate of both Laura Ashley and Wilko.
