Wilko rescue attempt comes to nothing

THE deal to save Wilko has failed, heralding the loss of 12,000 jobs and the closure of more than 400 stores.

Doug Putnam, who owns Toys R Us in Canada and turned round the HMV record shops in the UK, had hoped to save 200 of the 408 Wilko stores and staff. The operation came to nothing because of “the inability to reduce central infrastructure costs quickly enough to make a deal commercially viable”, administrators PwC explained.

Negotiations stalled in early September when Wilko suppliers, who included Unilever and Procter & Gamble, wanted their debts repaid now in order to continue to guarantee future stock.

“We had 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,” Putman said later.

With 52 shops already closed and more than 1,300 employees out of work, the GMB union revealed that PwC told staff Wilko’s 408 stores would close by early October.

Nevertheless, the writing had been on the wall during the 12 months between 2021 and 2021 when Wilko had shed approximately 1,600 staff, reducing the total to around 12,400.

Founded in 1930 when J K Wilkinson opened his first Leicester store, the retailer has seen sales reduced over each of the last four financial years.  These fell by 20 per cent to £1.2 billion (€1.39 billion) between 2019 and 2022 when the chain had debts of £35.9 million (€41.77 million).

Analysts have also pointed out that although Wilko was hit hard by the pandemic, the number of in-store shoppers fell by 40 per cent.  At the time, government support temporarily camouflaged the retailer’s problems through business rates relief, tax holidays and restrictions on landlords’ rent demands.  Once this help was removed, Wilko had to borrow £40 million (€46.5 million) from restructuring specialists, Hilco.

Administrators remain in talks with Poundland regarding around 100 stores but these will be acquired once the Wilko stores close and the deal does not include jobs.

Meanwhile, Discount retailer B&M’s £13 million (€15.12 million) offer to save 51 Wilko properties does not include saving jobs.