In a last-minute move, bargain retailer B&M has come to the rescue of Wilko, purchasing up to 51 of its 400 stores for £13 million from administrators.
This timely intervention has potentially saved thousands of jobs as Wilko had already initiated layoffs, putting 12,500 positions at risk.
The collapse of Wilko, a high street favorite offering a wide range of products, had seemed imminent with empty shelves plaguing its stores.
Hope for its survival had dwindled when a previous bid to buy the entire chain fell through. However, B&M’s acquisition is expected to provide a lifeline to many employees, though specific store details remain undisclosed.
A Boost for the Struggling Retail Industry
B&M’s purchase not only saves jobs but also injects vitality into the struggling British retail industry, which has grappled with the impact of Covid-19 and changing shopping habits.
B&M, known for its discount stores, operates over 1,150 outlets in the UK and France. Most of the acquired stores are expected to rebrand as B&M.
PwC continues discussions concerning Wilko’s remaining assets, with the deal financed from existing cash reserves and not subject to regulatory clearances.
An update on store openings will accompany B&M’s half-year financial results in November.
Wilko’s Turbulent Journey
Wilko, tracing its roots to a single hardware store in Leicester in 1930, fell into administration due to rising costs and lackluster sales.
The uncertainty surrounding the fate of its stores was a topic of concern, with Doug Putman, owner of HMV, initially leading a bid to purchase the discount shops.
Talks between administrators and Putman’s group faced hurdles related to Wilko’s debts to suppliers. Some Wilko stores, including those in Bournemouth, Woolwich, Merthyr Tydfil, and The Fort in Birmingham, were set to close.
The GMB union had requested voluntary redundancies.
Amidst these challenges, other retailers like Poundland, The Range, and Home Bargains expressed interest in acquiring parts of Wilko’s business.
Talks to save the entirety of Wilko’s business ultimately collapsed, leading to concerns of layoffs.
However, hope was rekindled when Doug Putman submitted a bid to save 350 stores and 10,000 jobs.
A last-minute bid of £90 million by Anglo-Canadian private equity fund M2 Capital further stirred the prospects of rescuing all 400 stores.
Wilko, originally known as Wilkinson, had grown into a dominant discount store on the British high street, offering a diverse range of products.
Competition from online retailers like Amazon and other discount stores, coupled with the challenges of the pandemic and inflation, had taken a toll on the business.
The founder’s granddaughter, Lisa Wilkinson, resigned as chairwoman earlier in the year, citing cash flow concerns.
The collapse of Wilko adds to the woes of the British High Street, which has witnessed the disappearance of several prominent names in recent years, including Debenhams, Arcadia group, and Mothercare.