Wilko, a British household products retailer, declared bankruptcy on Thursday due to large debts, its head announced.

The closure affects about 12,000 employees as rising inflation and interest rates harm consumers and companies.

The company, which has 400 storefronts and sells cleaning and gardening supplies, as well as other minor home goods online, has legally fallen into administration, a process that might result in sections of the firm being salvaged. 

In an open letter on its website, CEO Mark Jackson wrote, "We've all fought hard to keep this incredible business intact but must concede that time has run out, and now we must do what's best to preserve as many jobs as possible, for as long as is possible, by working with our appointed administrators."
 
According to media sources, Wilko chose PricewaterhouseCoopers as administrators of the insolvent firm formed in 1930.
 
Jackson added that "while we can confirm we had a significant level of interest, including indicative offers that we believe would meet all our financial criteria to recapitalize the business... we've been left with no choice but to take this unfortunate action."
 
The UK has continued to grapple with skyrocketing inflation and the highest cost of living in a generation and inflation is the highest among G7 nations at 7.9%.

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The Bank of England saw a 15-year high-interest rate of 5.25% in an attempt to moderate price surges.

The GBM union, on its part, blamed poor management for the demise of the company.

Nadine Houghton, GBM national officer, expressed that the 12,000 workers affected would take "little solace", knowing that Wilko's disaster could have been prevented with "better management".
 
"GMB has been told time and time again how warnings were made that Wilko was in a prime position to capitalize on the growing bargain retailer market, but simply failed to grasp this opportunity." 
 
Jackson added that work was done to "streamline costs and transform the way the business operates."

Recession incoming

Former US Treasury Secretary Larry Summers stated in June that Brexit will be memorialized as a "historic economic error" that has damaged the UK's economy after having helped inflation surge.

The UK leaving the European Union led to higher consumer costs, and the country's economic policy has been for several years "substantially flawed", Summers said.

Brexit "reduced the competitiveness of the UK economy, put downward pressure on the pound and upwards pressure on prices, limited imports of goods and limited in some ways the supply of labor," which all culminated in higher inflation rates.

Summers also went all out on the Bank of England, holding it accountable for the surging inflation rates in the country for its "very ill-judged monetary policies that were substantially too expansionary for too long."