WILKO has plunged into administration leaving 400 stores and thousands of jobs at risk.
The retailer's board has now appointed PricewaterhouseCoopers (PwC) as administrator after talks with a number of potential rescuers stalled.
All control of the business has now been passed on to PwC.
It comes a week after the bargain retailer filed a notice of intent to appoint administrators.
It was reported earlier this week that the retailer was in talks with the firm behind Laura Ashley – but hopes of a rescue deal have failed.
The brand was also said to be in talks with several other buyers.
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Wilko has 400 shops across the whole of the UK and employs around 12,000 people in total.
Mark Jackson, Wilko boss, said: "Over the past six months we've been open with all our stakeholders including our team members that we’ve been considering options to accelerate a turnaround plan given that we needed to make significant changes to the way we operate to restore confidence and stabilise our business.
"We left no stone unturned when it came to preserving this incredible business but must concede that with regret, we've no choice but to take the difficult decision to enter into administration."
"I'd like to take this opportunity on behalf of the directors and the Wilkinson family to thank all of our customers and our hardworking team members across our stores, logistics and support centre who remained loyal to Wilko."
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Wilko suspends essential service as it races to find a buyer and avoid collapse
Wilko shops continue to trade as normal but the chain stopped processing online deliveries yesterday.
Shoppers are now only given the option to use click and collect services when visiting the retailer's website.
Some stores have previously launched huge closing down sales – whether this happens with Wilko will depend on the outcome of the administration process.
It comes after Wilko filed for a notice of intent to appoint administrators last week on August 3.
This meant that Wilko had a maximum of 10 days to secure a deal while being protected from action by other creditors.
Bosses were said to be exploring the sale of a controlling stake in the company just last month.
Numerous high street brands have collapsed into administration in the last 12 months.
Paperchase collapsed into administration at the end of January this year and all 106 stores have since closed for good.
However, the Paperchase brand name and intellectual property were purchased by Tesco.
Scottish clothing brand M&Co and wellies retailer Joules are among the familiar brands which went bust in 2022.
Like Paperchase, the M&Co brand name was purchased by Yours Clothing – but all stores shut.
Howevever, Yours Clothing has plans to open 50 new M&Co branded stores over the next two years.
But retailers aren't the only ones affected, major burger chain Byron Burger also fell into administration and closed nine restaurants immediately.
What does going into administration mean?
When a company enters administration, all control is passed to an appointed administrator – who has to be a licensed insolvency practitioner.
Their goal is to leverage the company's assets and business to repay creditors.
Once the administrator has taken over, a moratorium is placed around the company and stops all legal actions.
After the administrator takes over, there isn't much that can be done to reverse the process.
How does administration work?
The administrator will write to your creditors and Companies House to say they’ve been appointed.
They will try to stop the company from being liquidated but if they can't, the administrator will pay as much of a company's debts as possible from the assets.
The administrator has eight weeks to write a statement explaining what they plan to do.
This must be sent to creditors, employees and Companies House and invites them to approve or amend the plans at a meeting.
Gift cards – your rights explained
When a company goes into administration, the people appointed to manage the process can decide whether to allow the use of gift cards or not.
It means you'll need to keep an eye on the administration process to see what your rights are.
The administrators are allowed to stop accepting gift cards at any point.
If the administrators later decide that you can't use your vouchers, you should register a claim with the administrators for the value of the vouchers.
This also applies if the company can't be saved through administration and is later liquidated.
However, you may not get this money back if other creditors are owed money too. You may also only get a portion of the money back.
If the voucher or amount put on a gift card was for more than £100, then it may be possible to claim the money back if it was purchased with a credit card.
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This is because the card company is jointly liable under Section 75 of the Consumer Credit Act 1974.
If the voucher was a gift, then you'd need to ask the person who bought it for you to claim the money back.
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