UK
Wilko job cuts ‘suspended’ after union calls for urgent government talksDaniel O'Boyle
Tue, 29 August 2023
Wilko is continuing to trade and has not announced any redundancies after formally entering insolvency (Sam Russell/PA) (PA Wire)
GMB Union, which represents a third of Wilko staff, says that job cuts will be ‘suspended’ while administrators consider “multiple” bids, hours after the labour organisation wrote to Business Secretary Kemi Badenoch claiming that bidders which aimed to save jobs had “difficulties” engaging with administrators at PwC.
The GMB Union revealed last week that the majority of Wilko staff appear set to lose their jobs, some as soon as next week, after a major bidder dropped out. Some shops are still expected to be saved by smaller bidders, but it now appears that the most likely scenario involves most of Wilko’s 400 shops closing.
However, the GMB said today that other groups have come forward and said they were interested in saving a large portion of Wilko, but had trouble dealing with PwC.
“Since this announcement, we have been contacted by a number of potential bidders for the business,” GMB National Secretary Andy Predergast said. “Of these, several appear to have the necessary funding and the willingness to invest and safeguard our members jobs.
“Needless to say, such bids not only have the potential to ensure that our members can carry on in employment, they also provide welcome relief for the high street as well as significantly lowering the degree to which the state would need to step in to provide redundancy and notice pay via the insolvency service. Unfortunately, we are concerned that prior to our involvement, several of these bidders have reported difficulties engaging the appointed administrators.
The understanding had been that job cuts would begin this week. But the Union today said that redundancies would be “suspended” while the administrators consider bids.
“All redundancies at Wilko have been suspended while the administrator considers further bids,” Prendergast said.
“Whilst this is a positive development, Wilko is not out of the woods by any means and this is a time of incredible stress and worry for the 12,500 workers who face losing their jobs.”
A spokesperson for the union said it was not yet clear how long the suspension might last.
Prendergast also raised questions about the role of private equity business Hilco, which is a major creditor of Wilko after offering a £40 million loan when the retailer was already close to collapse. The GMB leader said Hilco had been described in media as both a creditor and an advisor to administrators, which raised questions of whether there was a conflict of interest.
A spokesperson for the administrators said: “Since our appointment as administrators of Wilko we have worked relentlessly to secure a sale of the business, and talks are continuing with a number of parties.
“As administrators we’re intent on achieving the best outcome for everyone involved while preserving as many jobs as possible and adhering to our statutory duty to act in the best interests of the creditors as a whole.
“It would be inappropriate to comment on individual bidders or interested parties at this stage in the process.”
Wilko pauses redundancies as administrators consider rescue bids, says union
Henry Saker-Clark, PA Deputy Business Editor
Tue, 29 August 2023
Wilko has suspended redundancies while administrators consider rescue offers, according to the GMB union.
The union, which represents more than 3,000 of Wilko’s 12,500 staff, said it met with administrators on Tuesday morning.
Wilko tumbled into administration earlier this month, putting the future of its 400 stores across the UK into doubt.
Administrators from PwC have sought offers from interested firms in an effort to save jobs and stores.
The union said on Tuesday it discussed a number of potential bids to save the stricken high street chain with the insolvency experts.
Andy Prendergast, GMB national secretary, said: “All redundancies at Wilko have been suspended while the administrator considers further bids.
“Whilst this is a positive development, Wilko is not out of the woods by any means and this is a time of incredible stress and worry for the 12,500 workers who face losing their jobs.”
It comes after reports of fresh last-minute bids to potentially buy the retailer.
A bid worth £90 million has been made by restructuring specialist M2 Capital, the Guardian reported, which could potentially keep the entire Wilko chain trading.
It came after Canadian businessman Doug Putman, who bought music retailer HMV in 2019, also lodged a bid intended to preserve the majority of Wilko’s stores.
Rivals Poundland, B&M, The Range and Home Bargains also reportedly lodged their interest in buying parts of the Wilko business.
Wilko closures and job losses on hold as administrator considers rescue bids
Sarah Butler
Tue, 29 August 2023
Photograph: Maureen McLean/Shutterstock
Plans for redundancies and store closures at Wilko have been put on hold as administrators consider two potential last-ditch rescue bids that emerged over the bank holiday weekend.
Administrators from PricewaterhouseCoopers, who were called in earlier this month as Wilko ran short of cash, had warned that redundancies would start within weeks as there had been no viable bids for the bulk of the company. The group employs nearly 12,500 people.
Doug Putman, the owner of HMV in the UK and Toys R Us in Canada, is understood to have increased his bid on Friday’s deadline, offering to take on up to 350 of Wilko’s 400 stores and ensure the main creditors – led by the restructuring specialist Hilco – were paid. A previous bid from Putman would have involved saving 200 stores.
Related: What went wrong at Wilko?
Another potential offer has emerged from M2, a restructuring specialist that claims to own the Como hotels group and is in the process of buying the Michigan-based car parts maker Superior Industries. M2 is understood to have put forward a bid that would keep the entire Wilko chain trading.
M2 has written to administrators questioning whether the bid process was “fair and transparent” as it was given a deadline to provide details of its funding on a UK bank holiday.
However, a source close to the process questioned the credibility of the M2 bid, which was put forward very late on the final day for offers, and whether the finance group had the required funds available.
Andy Prendergast, the national secretary of the GMB union, which represents thousands of Wilko staff, said: “There appears to be a glimmer of hope but there is still a long way to go.
“We don’t want to get carried away as our members deserve certainty, but we are hopeful that jobs can be protected.”
He said the union had been told by PwC that any redundancy process for workers was on hold.
A spokesperson for PwC said: “Since our appointment as administrators of Wilko we have worked relentlessly to secure a sale of the business. We are actively engaging with all interested parties and assessing the deliverability of all bids made.
“As administrators we’re intent on achieving the best outcome for everyone involved while preserving as many jobs as possible and adhering to our statutory duty to act in the best interests of the creditors as a whole.
“It would be inappropriate to comment on individual bidders or interested parties at this stage in the process.”
Wilko: union seeks urgent meeting with business secretary over administrators
Jasper Jolly
Mon, 28 August 2023
Photograph: Christopher Thomond/The Guardian
A union representing thousands of workers at Wilko is seeking an urgent meeting with the business secretary after being told by potential rescuers of “difficulties” in engaging with the administrators who will decide upon the stricken retail chain’s future.
On Monday, the GMB national secretary, Andy Prendergast, wrote to Kemi Badenoch asking her to ensure that PricewaterhouseCoopers considered all bids for the budget retailer where 12,500 jobs were hanging in the balance.
The gardening to beauty retailer, which has 400 stores, called in administrators this month after running short of cash. Its shops are expected to close within weeks, with thousands of job losses unless a buyout can be secured.
The shuttering of Wilko stores will leave more big gaps on UK high streets that have been severely hit by the loss of 6,000 retail outlets in the past five years.
Several parties, who say they will retain the jobs if successful, have emerged as contenders to take over the business. Doug Putman, a Canadian entrepreneur who returned the HMV music and film retail chain to profit, last week submitted a second offer that would mean the stores would continue to operate under the Wilko brand.
M2 Capital, a UK-Canadian private equity firm that owns a string of upmarket hotels around the world under the COMO brand, also put forward a bid on Friday. At least one other potential bidder from the UK is considering making an offer, although no formal bid has been entered, the Guardian understands.
Any new bid would face a race against time if it is to preserve workers’ jobs. PwC said on Wednesday it was probable that the majority of Wilko’s stores would close and there would be redundancies, adding that it had not found a buyer for the whole group. A decision on the first closures and redundancies is thought to be imminent, and could come as soon as this week, although Wilko stores are continuing to trade.
However, in the letter to Badenoch seen by the Guardian, Prendergast said: “We are concerned that prior to our involvement, several of these bidders have reported difficulties engaging the appointed administrators.” Several bidders “appear to have the necessary funding and the willingness to invest and safeguard our members’ job”, he added.
The GMB also raised concerns over the role of Hilco Capital, a private equity firm that lent Wilko about £40m this year. A Hilco subsidiary holds the rights to income from the sale of the Wilko brand. Barclays Bank also holds a charge over several plots of land owned by the retailer.
As administrator, PwC has an obligation to try to protect the interests of creditors including Hilco. The GMB said it was concerned about the influence of Hilco and that the private equity firm’s interests did not necessarily align with retaining workers’ jobs. Hilco was approached for comment.
A PwC spokesperson said: “Since our appointment as administrators of Wilko we have worked relentlessly to secure a sale of the business, and talks are continuing with a number of parties. As administrators, we’re intent on achieving the best outcome for everyone involved while preserving as many jobs as possible and adhering to our statutory duty to act in the best interests of the creditors as a whole.
“It would be inappropriate to comment on individual bidders or interested parties at this stage in the process,” they added.
The GMB argues that no redundancies should take place at Wilko if meaningful offers have been tabled that will protect jobs. The business secretary would not have powers to intervene directly in the administration, but could put pressure on parties to try to save jobs.
A government spokesperson said: “While this is a commercial decision for the company, we understand that this will be a concerning time for workers at Wilko.
“We have backed businesses all of sizes with an unprecedented package of support including recent fuel duty and VAT cuts, business rates holidays and government backed loans worth around £400bn. We will continue to stand firmly behind them.”
The union said it was seeking assurances from the government that all bids would be considered, and that where possible all steps would be taken to “protect jobs as part of this process”. Prendergast argued that the bids could save the government millions of pounds in redundancy costs and notice pay that would be required if Wilko enters liquidation.
The Department for Business and Trade was approached for comment.
Jasper Jolly
Mon, 28 August 2023
Photograph: Christopher Thomond/The Guardian
A union representing thousands of workers at Wilko is seeking an urgent meeting with the business secretary after being told by potential rescuers of “difficulties” in engaging with the administrators who will decide upon the stricken retail chain’s future.
On Monday, the GMB national secretary, Andy Prendergast, wrote to Kemi Badenoch asking her to ensure that PricewaterhouseCoopers considered all bids for the budget retailer where 12,500 jobs were hanging in the balance.
The gardening to beauty retailer, which has 400 stores, called in administrators this month after running short of cash. Its shops are expected to close within weeks, with thousands of job losses unless a buyout can be secured.
The shuttering of Wilko stores will leave more big gaps on UK high streets that have been severely hit by the loss of 6,000 retail outlets in the past five years.
Several parties, who say they will retain the jobs if successful, have emerged as contenders to take over the business. Doug Putman, a Canadian entrepreneur who returned the HMV music and film retail chain to profit, last week submitted a second offer that would mean the stores would continue to operate under the Wilko brand.
M2 Capital, a UK-Canadian private equity firm that owns a string of upmarket hotels around the world under the COMO brand, also put forward a bid on Friday. At least one other potential bidder from the UK is considering making an offer, although no formal bid has been entered, the Guardian understands.
Any new bid would face a race against time if it is to preserve workers’ jobs. PwC said on Wednesday it was probable that the majority of Wilko’s stores would close and there would be redundancies, adding that it had not found a buyer for the whole group. A decision on the first closures and redundancies is thought to be imminent, and could come as soon as this week, although Wilko stores are continuing to trade.
However, in the letter to Badenoch seen by the Guardian, Prendergast said: “We are concerned that prior to our involvement, several of these bidders have reported difficulties engaging the appointed administrators.” Several bidders “appear to have the necessary funding and the willingness to invest and safeguard our members’ job”, he added.
The GMB also raised concerns over the role of Hilco Capital, a private equity firm that lent Wilko about £40m this year. A Hilco subsidiary holds the rights to income from the sale of the Wilko brand. Barclays Bank also holds a charge over several plots of land owned by the retailer.
As administrator, PwC has an obligation to try to protect the interests of creditors including Hilco. The GMB said it was concerned about the influence of Hilco and that the private equity firm’s interests did not necessarily align with retaining workers’ jobs. Hilco was approached for comment.
A PwC spokesperson said: “Since our appointment as administrators of Wilko we have worked relentlessly to secure a sale of the business, and talks are continuing with a number of parties. As administrators, we’re intent on achieving the best outcome for everyone involved while preserving as many jobs as possible and adhering to our statutory duty to act in the best interests of the creditors as a whole.
“It would be inappropriate to comment on individual bidders or interested parties at this stage in the process,” they added.
The GMB argues that no redundancies should take place at Wilko if meaningful offers have been tabled that will protect jobs. The business secretary would not have powers to intervene directly in the administration, but could put pressure on parties to try to save jobs.
A government spokesperson said: “While this is a commercial decision for the company, we understand that this will be a concerning time for workers at Wilko.
“We have backed businesses all of sizes with an unprecedented package of support including recent fuel duty and VAT cuts, business rates holidays and government backed loans worth around £400bn. We will continue to stand firmly behind them.”
The union said it was seeking assurances from the government that all bids would be considered, and that where possible all steps would be taken to “protect jobs as part of this process”. Prendergast argued that the bids could save the government millions of pounds in redundancy costs and notice pay that would be required if Wilko enters liquidation.
The Department for Business and Trade was approached for comment.
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