HMV’s bid to rescue troubled Wilko COLLAPSES as administrators ‘prepare to sell 100 stores to discount rival Poundland’ after B&M snapped up dozens of shops
- Administrators have been trying to save Wilko’s 400 stores and 12,500 jobs
- The Range could buy Wilko brand after Doug Putman’s rescue bid collapsed
A Wilko rescue deal proposed by HMV owner Doug Putman has collapsed, with the retailer’s administrators now expected to try to sell about 100 stores to Poundland.
The Range is also now set to buy the Wilko brand as PricewaterhouseCoopers (PwC) continues to try to save as many of its 400 stores and 12,500 employees as possible.
Canadian businessman Mr Putman’s proposed deal fell through after weeks of talks over a deal that could have saved hundreds of stores and jobs, reported Sky News.
It comes after PwC last week named the first 52 Wilko shops across Britain that will shut either tomorrow or this Thursday, which will result in the loss of 1,016 staff.
Discount chain B&M has agreed to buy up to 51 stores and other parties have been speaking to PwC about acquiring the remaining 300 after the 52 shut this week.
Unlike Wilko, discount retailers B&M and Poundland have cashed in on demand for affordable homeware and miscellaneous goods amid the cost of living crisis.
A Wilko store in Cardiff is pictured yesterday with closing down signs posted on the windows
A Wilko rescue deal proposed by HMV owner Doug Putman (pictured in a store) has collapsed
Empty shelves in a Wilko store on Queen Street in Cardiff yesterday which will shut this week
Mr Putman told The Sun today: ‘It is with great disappointment that we can no longer continue in the purchase process for Wilko having worked with administrators and suppliers over several weeks to seek a viable way to rescue it as a going concern.’
Which Wilko stores will close this week?
Administrators for Wilko have revealed the locations of 52 stores which will close this week.
The following Wilko shops will close tomorrow (Tuesday):
- Acton, London
- Aldershot, Hampshire
- Barking, London
- Bishop Auckland, County Durham
- Bletchley, Milton Keynes
- Brownhills, Walsall
- Camberley, Surrey
- Cardiff Bay Retail Park
- Falmouth, Cornwall
- Harpurhey, Manchester
- Irvine, North Ayrshire
- Liverpool Edge Lane
- Llandudno, Wales
- Lowestoft, Suffolk
- Morley, Leeds
- Nelson, Lancashire
- Port Talbot, Wales
- Putney, London
- Stafford, Staffordshire
- Tunbridge Wells, Kent
- Wakefield, 121 Kirkgate
- Weston-super-Mare, Somerset
- Westwood Cross Retail Park, Kent
- Winsford, Cheshire
The following Wilko shops will close on Thursday:
- Ashford, Kent
- Avonmeads, Bristol
- Banbury, Oxfordshire
- Barrow-in-Furness, Cumbria
- Basildon, Essex
- Belle Vale, Liverpool
- Burnley, Lancashire
- Clydebank, Glasgow
- Cortonwood, Barnsley
- Dagenham, Essex
- Dewsbury, West Yorkshire
- Eccles, Greater Manchester
- Folkestone, Kent
- Great Yarmouth, Norfolk
- Hammersmith, London
- Huddersfield, West Yorkshire
- Morriston, Swansea
- New Malden, South-west London
- North Shields, Tyne and Wear
- Queen Street, Cardiff
- Rhyl, Wales
- Southampton West Quay
- St Austell, Cornwall
- Stockport, Greater Manchester
- Truro, Cornwall
- Uttoxeter, Staffordshire
- Walsall
- Woking, Surrey
Sources claimed they ‘had tried very hard to make it work but it had been just too difficult with running costs and suppliers, it was always going to be a challenge’.
The main issue blocking the deal was said to have been the prohibitive cost of replacing the retailer’s old legacy supply chain and moving to a new system.
Mr Putman added: ‘We had financing in place and received the full support of PWC, Wilko management and staff representatives, which we are deeply thankful for considering what a challenging time it has been for them.
‘However, commitment to overhauling the trading framework of the business with partners and the costs of running Wilko’s legacy operations infrastructure combined has meant that a stable foundation could not be secured to ensure long term success for the business and its people in the way that we would have wanted.’
Mr Putman is thought to have wanted around 200 stores and had offered to pay off £40million of debt to creditor Hilco.
He was also said to have been keen to purchase the Wilko brand, which would have meant its signature red logo stayed on high streets.
Meanwhile it was also reported that suppliers are demanding overdue payments from administrators, which has slowed down the sake process.
Last week, PwC said ‘it is possible that further store closures may regrettably be necessary’ after naming the first 52 shops to close.
There will be closures tomorrow and on Thursday across the UK in locations ranging from Bishop Auckland and Barrow in Furness to Hammersmith in West London and Weston-super-Mare.
Last week a further 299 redundancies at two distribution centres in Worksop in Nottinghamshire and Newport in south Wales were announced – taking the total number of jobs lost to 1,601 since Wilko crashed into administration on August 10.
Discount chain B&M agreed to buy up to 51 shops. It is thought to want to rebrand the Wilko stores it is buying as it expands its high street presence. But it remains uncertain how many staff will be kept on.
Jonathan De Mello, retail analyst at JDM Retail, previously warned that it was possible only 25 per cent of Wilko’s stores could be rescued should the deal with Mr Putman fall through.
Wilko was founded by JK Wilkinson in 1930 with a single shop in Leicester. It outlasted the demise of rival Woolworths after the financial crisis in 2008.
But its leadership and owners have been criticised after £77million was handed to former shareholders in the past decade – first reported by the Mail on Sunday – including during years when the firm made a loss.
Lisa Wilkinson, granddaughter of the founder, stepped down as chairwoman of the board earlier this year after the group secured emergency cash funding in the hope of stabilising the business.
Last week the GMB union, which has about 3,000 members who worked for Wilko, criticised previous management of the beleaguered chain for failing to rescue the business and protect jobs.
Wilko’s administrators are expected to try to sell about 100 stores to Poundland (file image)
Discount chain B&M (file image) has now agreed to buy up to 51 Wilko outlets across the UK
Fellow discount retailer The Range is now set to buy the Wilko brand (file picture)
It said: ‘We make no apology for placing the blame squarely on the shoulders of the previous family director and board chair, and will continue to highlight her role in destroying what was a successful business whilst taking millions in dividends.’
READ MORE ‘I’m leaving Wilko after working there for SEVEN years… it was fun while it lasted’: Devastated staff share emotional posts as they leave troubled retailer for the final time
Chief executive Mark Jackson said the management team ‘left no stone unturned’ in attempting to revive Wilko in the lead-up to its collapse last month.
Last week B&M apologised for appearing to make light of Wilko’s crisis after it agreed to buy some of its shops.
In a now-deleted post on social media, the homeware chain said: ‘Popped into B&M for a few things and left with 51 Wilko stores. Happens to the best of us.’
It was criticised for being tone deaf given more than 1,600 job losses at Wilko stores.
B&M said: ‘This post has been removed. It should not have been made and we apologise for the offence it has caused.’
B&M was taken over by Simon and Bobby Arora in 2004 and has more than 700 stores. Simon stood down as chief executive last year.
It also emerged last week that Aldi is eyeing up former Wilko stores and could hire workers from the chain.
Aldi has said it wants to open 500 more shops in the UK after marking the opening of its 1,000th store in Surrey as part of its expansion plans.
Its UK and Ireland chief executive Giles Hurley said it could use former Wilko stores for new sites sites.
Asked whether Also is looking at ex-Wilko stores, its UK and Ireland chief executive Giles Hurley told the Daily Mirror last week: ‘Clearly, with an ambitious target of 1,500 stores, we will look at all the opportunities. It comes down to the availability and suitability.’
Aldi has called for staff affected by the collapse of Wilko to get in touch because it has about 6,000 jobs currently available.
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