Wilko eyes CVA to slash costs

Wilko is considering entering into a company voluntary arrangement (CVA) to renegotiate rents and possibly close some of its stores in a bid to cut costs across the group, according to Bloomberg.

Bloomberg reports that the struggling discount chain has reached out to PwC to explore its restructuring options, which includes a CVA, that would allow the retailer to renegotiate agreements with its creditors. 

This follows many efforts by the retailer to cut costs across its stores in recent months, including cutting over 400 roles at the start of the year.

In January, Wilko also secured £40m worth of funding from Homebase owner Hilco UK after it swung to a £36.8m loss in its last full-year results, as a dip in consumer demand impacted trading.

As a result of its poor performance, the retailer warned it could run out of cash by the end of this year if trading conditions deteriorated further.

Mark Jackson, CEO of Wilko, said: “We’re in the early stages of the turnaround and, as is usual, the directors continue to explore all options for Wilko’s long-term future.”