Wilko landlords are facing the possibility of no rent payments for the next three years as the struggling value retailer prepares to launch a CVA.
According to The Times, the retailer will launch the restructuring arrangement next month, hoping to cut rents on 240 of its 400 stores.
As a result, the move could result in some landlords receiving no payments until rent returns to its contractual amount after three years under the terms of the CVA.
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Wilko appears as a Top100 retailer in the 2023 RetailX Top500 report
Despite Wilko having no plans to close any of its sites, some landlords will likely take back their properties.
One source close to the process told The Times, that the omnichannel retailer will soon run out of funds and could collapse into administration if CVA is not agreed.
This comes as Wilko appointed property agents CBRE last week to negotiate with landlords, with talks due to begin in the next few weeks.
Earlier this year, announced a raft of job cuts in a bid to cut costs, resulting in 400 jobs being axed at its head office.
At the time, Wilko CEO Mark Jackson said: “We’ve already begun our turnaround programme to drive Wilko forward.
“As part of this, we quickly identified significant changes to the Wilko operating model to enable us to stabilise the business, and then thrive again. This includes some planned and considered changes to our management structure at both our stores and head office.”
He added: “We can’t comment on the numbers of team members affected as conversations are still ongoing, but it goes without saying, we’re fully supporting any 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.”
