Budget retailer Wilko has entered administration after failing to secure a rescue deal, putting around 12,500 jobs in jeopardy.

The chain, which runs more than 400 stores across the UK, told staff on Thursday that it has hired administrators from PwC to oversee the process.

Wilko will continue to trade from all its stores “without any immediate redundancies”, the administrators have said.

Chief executive Mark Jackson said the company had received “a significant level of interest” but was “left with no choice but to take this unfortunate action” after being unable to close a deal in time.

In a letter, he said: “Over the past six months Wilko has been very open 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.

“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.”

The retailer was founded as a hardware shop in Leicester in 1930, but quickly expanded across the UK, growing into other markets such as garden products and stationery.

Wilko has grown to currently run around 400 stores and employ 12,500 workers.

It launched a turnaround plan earlier this year after its sales and shopper footfall came under pressure as consumer budgets were hammered by the rising cost of living.

Wilko said it saw “real progress” in many areas of its plan and made significant cost savings but was unable to improve its finances quickly enough to avoid insolvency.

Administrators said the retailer has suffered “increasing cashflow pressure and a deterioration in trading” after sales were impacted by the pandemic and cost-of-living crisis

They will now seek out potential buyers for the firm’s store estate and its brand.

Zelf Hussain, joint administrator and PwC partner, said: “It is incredibly sad that a well-loved, family business that has been on the high street for over 90 years has had to go into administration today.

“As administrators, we will continue to engage with parties who may be interested in acquiring all or part of the business.

“Stores will continue to trade as normal for the time being and staff will continue to be paid.”

The company started looking for a takeover or investment at the start of the year, with advisers from PwC overseeing the process.

It is understood Wilko held talks with private equity firms Gordon Brothers, which owns Laura Ashley, and Alteri as it sought funding to keep it afloat, but was unable to strike a deal.

Nadine Houghton, national officer at the GMB union, said: “The 12,000 Wilko workers now facing potential redundancy will take little solace that, with better management, the situation that has befallen Wilko was, sadly, entirely avoidable.

“GMB has been told time and time again how warnings were made that Wilko was in a prime position to capitalise on the growing bargain retailer market, but simply failed to grasp this opportunity.”

Shoppers have spoken of their disappointment over the potential collapse and prospect of more vacant shops in UK high streets.

Pam Comer, 72, who visited the Wilko store in Ely, Cambridgeshire, with her husband, said: “It’s sad – more empty shops.

“I feel sorry for the people employed by Wilko.”