The retailer's administrators have begun consulting creditors on the terms of a deal that would see the businessman Doug Putman retaining around 8,500 jobs, Sky News understands.
Mark Kleinman
City editor @MarkKleinmanSky
Thursday 31 August 2023
The owner of HMV is finalising a deal to rescue the majority of Wilko's operations, salvaging more than 8,000 jobs at the stricken high street retailer.
Sky News has learnt that Wilko's administrators, PricewaterhouseCoopers (PwC), began consulting the chain's major creditors on Thursday on the terms of an agreement with Doug Putman.
One source with financial exposure to Wilko said Mr Putman intended to acquire more than 300 of its 400 stores, meaning that between 8,000 and 9,000 jobs of a total workforce of 12,500 could be saved.
Depending upon further deals with other retailers to buy some of Wilko's stores, however, that could mean several thousand high street workers face losing their jobs.
A deal with Mr Putman could be announced in the next few days, although people close to the situation cautioned that some uncertainty remained until it was agreed.
The final store and job perimeters involved in the deal are also yet to be formalised, according to one creditor.
"It's still in the balance but it is beginning to look more positive that a deal can get done," the creditor said.
On Thursday, PwC confirmed the first redundancies since its appointment when it announced that 283 jobs would be lost, mainly at its support centre operations.
"We will continue to do all that we can to support staff through this period of difficult upheaval, and to maximise their opportunities for a rapid return to work," Jane Steer, joint administrator, said.
"Our priority is to ensure that all team members affected by redundancy are assisted in processing their claims with immediate effect."
Details of Mr Putman's deal structure were unclear on Thursday, although he has approached financiers including Gordon Brothers, the specialist retail investor, about backing a deal, Sky News revealed last weekend.
PwC has been seeking external investment for Wilko for months - a search which acquired greater urgency three weeks ago when the accountancy firm was formally appointed as administrator.
Poundland's parent and B&M European Value Retail have been eyeing the purchase of 150 shops between them, although those deals would not take place if Mr Putman succeeds in buying the bulk of its outlets.
The Range, another value retailer, has made an offer to buy Wilko's brand and online operations.
A further bidder for Wilko, M2 Capital, reportedly tabled an offer for the whole group but on Thursday the GMB union said it had been informed by PwC "the one bid for the entire business has fallen through as the bidders have failed to provide the necessary evidence to show that they had the finances necessary to purchase the company despite being given numerous opportunities to do so".
PwC said: "Since their appointment, the administrators have been working closely with Wilko, its employees and suppliers and have considered multiple varied bids and expressions of interest related to the group.
"While discussions continue with those interested in buying parts of the business, it is now clear that no viable offer structure put forward includes the group in its entirety."
The union added in a message to members: "For staff in stores and online, PWC are continuing to assess bids and we remain hopeful that there is one from a viable buyer on the table.
"However, at this stage we cannot in any way guarantee this and must therefore continue to prepare for the worst."
Read more from business:
Hundreds of job losses at Wilko confirmed
Wilko was established by the Wilkinson family in 1930, and sells homewares and garden furniture at discounted prices.
Shortly before it crashed into administration, Sky News revealed that Gordon Brothers, Alteri Investors and Opcapita were examining last-ditch proposals to invest in the business.
Like many high street retailers, it has been hit by inflationary pressures and supply chain challenges.
In recent months, it had been seeking to finalise a company voluntary arrangement (CVA) - a mechanism that would have triggered steep rent cuts at hundreds of stores but avoided any closures.
Mr Putman could not be reached for comment, while PwC has been contacted for comment.
Hundreds of job losses confirmed at Wilko as bidder misses deadline
Hundreds of jobs will be lost at retailer Wilko after a bid for the entirety of the collapsed retailer fell through (PA)
Hundreds of jobs will be lost at Wilko in the first tranche of redundancies after a bid for the entirety of the collapsed retailer fell through.
A potential bidder, the only one which planned to protect all 12,500 employees and 400 Wilko sites, missed a deadline set by administrator PwC.
PwC said “it is now clear that no viable offer structure put forward includes the group in its entirety”, adding that 269 support centre workers in Worksop and Newport will have their last day with the business on Monday.
These jobs include the IT, financial, legal and HR teams.
There will be further redundancies across the company’s two warehouses from early next week, it said. Exact numbers have yet to be confirmed but it is thought that around 1,600 people work across the warehouses and support centres.
The administrator said discussions are continuing with bidders interested in buying parts of the business (PA)
The GMB union said a bidder, reported to be M2 Capital, had not submitted the evidence needed to show it could buy the business.
PwC also said there had been no viable offers for Kin Limited, a subsidiary of the company. Kin has been forced to close, with 14 jobs gone.
The administrator said discussions are continuing with bidders interested in buying parts of the business.
The GMB said: “As a result of this unwelcome development, the redundancy processes which were paused two days ago are set to restart almost instantly.”
It said that it was still trying to save the distribution centres, but “we do not have high hopes of doing so”.
On Wednesday, the union had told its 3,000 members who work for Wilko that M2 Capital, which was believed to have offered around £90 million for the business, had until 5pm to submit the correct paperwork.
M2 was understood to have said that it would retain all the jobs for two years.
GMB said that it is “hopeful” of a viable bid for Wilko’s stores and online business.
It added: “Despite leaving no stone unturned, we simply could not reverse the years of mismanagement under the recent regime and cannot ignore the incompetence which has cost you your jobs.”
A bid may come from Canadian businessman Doug Putman, who bought music retailer HMV in 2019.
Earlier this week it was understood that he was still in discussions with PwC over a bid intended to preserve most of Wilko’s stores.
There has also reportedly been interest from Poundland, B&M, The Range and Home Bargains.
Joint administrator Jane Steer of PwC said: “It’s with great sadness that we announce these redundancies.
“We’re incredibly grateful to these team members for the support and dedication they’ve shown to the company, particularly over the last few very difficult weeks.
“We will continue to do all that we can to support staff through this period of difficult upheaval, and to maximise their opportunities for a rapid return to work.
“Our priority is to ensure that all team members affected by redundancy are assisted in processing their claims with immediate effect.
“We will be circulating correspondence to all staff as soon as possible which will outline the support available to complete redundancy payment forms.”
Last-ditch bid to save Wilko collapses with thousands of jobs at risk
The only bid which would save collapsed retailer Wilko has fallen through.
Staff redundancies are expected to start next week, the GMB Union has confirmed.
The discount retailer fell into administration this month, putting 12,000 jobs at risk.
The founding family have been criticised for continuing to take out dividends even while the firm began to struggle.
This has reportedly left a £50 million hole in one of its pension funds.
Wilko lost £38.7 million last years as sales fell by 3.3%.
Lisa Wilkinson, the founder’s granddaughter, stood down as chairwoman in Janauary after fearing the company could run out of cash.
Wilko borrowed £40 million from Hilco, which owned HMV before it went bust and has overseen the closure of other high-street firms such as Debenhams.
Doug Putman, who saved high street chain HMV from administration, is understood to have held talks with Wilko’s executives.
His offer involved keeping around half of the 400 shops and 3,000 to 4,000 of Wilko’s 12,000 workers, the Times reports.
A source at Wilko said: ‘It’s frustrating because there’s 12,000 of us who are now going to lose our jobs.’
Putman is understood to have flown from Canada to the UK two weeks ago to meet with company management.
