Wilko: First job losses confirmed as deal to buy whole firm failson August 31, 2023 at 1:38 pm

Hundreds of staff at Wilko will lose their jobs at the collapsed chain over the coming days with more redundancies to follow, administrators have said.

The cuts come after a bid from M2 Capital to buy the business fell through when private equity firm failed to file paperwork in time.

PwC, which is overseeing Wilko’s sale, said it was it was clear there was no viable offer to buy the whole business.

But talks are ongoing with the owner of HMV which could save about 300 shops.

It is understood that PwC is still in discussions with Doug Putman about a deal for part of the company. Reports suggest thousands of jobs could be saved if an agreement is made.

The discount chain, a stalwart of the High Street, fell into administration in August putting 12,500 jobs at risk across 400 shops.

Administrators at PwC said on Thursday that 269 jobs at the chain’s support centre in Worksop and 14 others from a subsidiary firm of Wilko would be cut at the close of business on Monday 4 September.

Further redundancies at its two distribution centres in Worksop and Newport are to begin from early next week, but numbers have not been confirmed.

PwC said all of the chain’s stores are currently trading and remain open, while “discussions continue with those interested in buying parts of the business”.

Sky News reported that Mr Putman, a Canadian billionaire, was finalising a rescue deal.

The GMB union, which represents about 4,000 Wilko staff, said it remained hopeful for a bid from a viable buyer to save the jobs of employees in stores and online, but warned “we cannot in any way guarantee this and must therefore continue to prepare for the worst”.

The union said the majority of people working in Wilko’s commercial trading team, IT, finance, legal and Human Resources would be made redundant on Monday.

It said it had requested redundancies at distribution centres to “begin with volunteers” and that it was speaking to Bassetlaw District Council, the Welsh Assembly, and other organisations to try to “save the sites”.

“It should be stressed that at this point, we do not have high hopes of doing so but we will not stop working on this and hope that even if we are unable to do so prior to closures, we will actively look to keep members’ details in the hope of being able to staff up quickly if we find buyers or new tenants for the sites,” a GMB statement said.

Wilko stepped into the gap on the High Street left by the collapse of Woolworths in late 2008, but has struggled over the past decade partly due to growing competition from the likes of Poundland and B&M.

Many of Wilko’s stores are also on High Streets in traditional town centres, which became an expensive liability as customers shifted to bigger retail parks and out-of-town locations.

The company, which was founded in Leicester in 1930, was family-run until its collapse this month and is well-known for its affordable everyday items.

Job cuts at the chain were suspended in recent days as PwC considered M2 Capital’s bid for the entire business, which was submitted last week.

M2 Capital said it made a £90m bid for Wilko and claimed at the weekend that it would retain all employees’ roles for two years.

However, it is believed that the private equity firm was unable to provide proof of funding for its bid to administrators prior to a deadline on Wednesday.

During a conversation littered with expletives, M2 Capital chairman Robert Mantse told the BBC that his dealings with the administrators had been a “circus” and accused PwC of being “beyond unfair”.

He said M2 is now considering legal action. Asked what his next steps would be, Mr Mantse replied he was “going to lunch with a very pretty girl”.

There has also been speculation that Wilko’s rivals, such as B&M, Poundland and The Range could be interested in the firm.

Those retailers, along with Home Bargains, have created strong competition for Wilko in recent years as the high cost of living has pushed shoppers to seek out bargains.

Poundland and B&M declined to comment.

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