Wilko announces job losses after rescue bid falls through

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Almost 300 staff at UK discount chain Wilko will lose their jobs after a last minute offer for the entire company collapsed, with more redundancies to follow.

PwC confirmed on Thursday that 283 employees at the retailer’s support centre in Worksop and distribution centres in Worksop and Newport will be made redundant on Monday, and warned of more job losses across its two distribution centres next week.

Discussions with Doug Putman, the Canadian owner of HMV who is seeking to salvage a large chunk of Wilko’s estate, however, were “very much live” and his rescue offer was the most “viable”, according to people close to the process. Putman did not immediately respond to a request for comment.

Jane Steer at PwC said: “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.”

The GMB union, which represents thousands of Wilko workers, said they must “continue to prepare for the worst” even though the administrators remain in talks with other interested parties about selling parts of the company.

M2 Capital, which emerged as an unexpected bidder late last week and said it would pay “more than $100mn” for the entire chain, did not provide administrators with proof that it could fund an acquisition by a deadline of Thursday morning.

Simon Arora, the founder and former chief executive of rival discount retailer B&M, wrote to M2 Capital on Wednesday to say he was “astonished” the private equity firm was bidding for the entire chain.

He added there was “ample interest from other discounters such as B&M” in Wilko’s outlets and they “will all be going to the landlords for the good stores”. B&M declined to comment.

The latest developments come three weeks after the retailer, which trades from 400 stores, filed for administration amid a cash crunch.

It is one of the biggest retail casualties in the UK in recent years following the collapse of Sir Philip Green’s retail empire and department store chain Debenhams, and more recently McColl’s, the corner shop chain that was subsequently bought by Morrisons.

Many discount chains have thrived in recent years but Wilko struggled in the face of increased competition and supply chain problems that caused stock to dwindle and shoppers to go elsewhere.

In January, it borrowed £40mn from Hilco, the special situations investor that is separately advising PwC on the possible liquidation of some assets, including stock, if no bidder is found.

GMB has raised concerns about Hilco’s influence. A person close to the investor has previously said it has no say in PwC’s decisions and the ultimate outcome for Wilko.

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