Wilko rescue deal collapses leaving more than 10,000 jobs in grave danger
Wilko jobs and stores are still at risk after the rescue deal involving HMV owner Doug Putman which thousands had been placing their faith in, has collapsed. But efforts are still on-going to provide a future for the troubled retailer and its staff.
Talks between the Canadian businessman and administrators PricewaterhouseCoopers (PwC) over a "slimmed-down deal" to save around 100 Wilko sites have ended. In a statement released by Doug Putman, the deal collapsed over the rising costs associated with taking on Wilko's infrastructure.
However, an executive close to the talks told Sky News they expect PwC will look into striking an agreement with the owner of Poundland. The discount chain is believed to potentially take on around 100 stores. Although, it is unclear whether the deal would protect staff who work at those stores.
Earlier this month, the HMV owner, alongside his financial backer Gordon Brothers, was reportedly finalising a deal with the collapsed retailer to save up to 300 of 400 Wilko stores potentially protecting more than 8,000 of Wilko's 12,500 workforce. Sky News reports that the deal was "reshaped" several times and that it was close to being signed off last week.
With the collapse, it does mean that stores are at risk of closure and jobs are likely going to be lost. One insider told Sky News last week that PwC had been "preoccupied with preserving as many of Wilko's workforce as possible" in the month since its collapse.
Wilko makes huge change to over 400 UK stores - and it's good for shoppers
Rescue talks with HMV owner Doug Putman have reportedly collapsed (Joseph Raynor/ Nottingham Post)Last week, B&M agreed to buy up to 51 Wilko stores from administrators for £13million, although the announcement did not confirm which stores would be rescued in its deal, or if any jobs would be retained. B&M said an update will be made in its half-year financial results, set to be published on November 9. Shops are expected to reopen under the B&M branding, although some could open under the Heron frozen foods brand also owned by B&M European Value Retail.
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Last week, the GMB union, which represents more than 3,000 Wilko staff, criticised the retailer for leaving the job security of employees uncertain. It is believed that B&M's deal only includes Wilko’s properties and will not transfer workers currently based at these sites. PwC declined to comment when asked by The Mirror on the details of the deal.
Recently, the administrators announced that Wilko would be closing 52 stores and making more than 1,300 staff redundant as talks with potential buyers continued. At the time, PwC said it was “actively working with potential buyers”, however, the 52 stores set to close “do not form part of any ongoing interest in the Wilko store portfolio”.
Sky News reported that The Range, another value retailer, is in advanced talks to buy Wilko's brand and online assets.
In his statement, Doug Putman said: “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.
“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.”
PwC has declined to comment.
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