Union leaders have called for Wilko’s 12,500 employees to be prioritised, after a deal that could have rescued jobs at the ailing budget chain was rejected because its debt holders could recoup more from a break-up of the business.
Doug Putman, the Canadian entrepreneur who rescued HMV from administration in 2019 and returned it to profit, is understood to have been attempting to take on at least 200 of the group’s 400 outlets and continue operating them under the Wilko brand, saving jobs and helping keep orders flowing for suppliers.
Sources said Putman had been in talks with Wilko’s administrators at PwC for at least two weeks but his offer could not match the cash raised from liquidating the chain’s assets, including its leaseholds and stock. Wilko’s biggest creditor is restructuring specialist Hilco, which loaned the company £40m shortly before it went bust.
Andy Prendergast, the national secretary of the GMB union, said: “Working people’s livelihoods should not be treated like chess pieces – to be traded off against the interests of the wealthy.
“Any resolution to the Wilko debacle needs to prioritise their interests.”
It is understood that PwC have given a deadline for all final offers today, so there is a chance that Putman could come back with a raised bid, but sources said the deals he had put forward so far had “never been credible”.
“The deal is stone dead,” a source close to the talks said.
Hilco has previously owned a number of distressed retailers, including the department stores group Debenhams and HMV before it collapsed and was acquired by Putman.
The entrepreneur, who has been in the UK this week as part of attempts to finalise a deal, had hoped to keep the Wilko brand alive, as first reported by the Times.
Administrators from PwC, who were appointed to Wilko this month as it ran short of cash, said on Wednesday evening that it was “likely that there will be redundancies and store closures in the future” as they had not found a buyer for the whole group.
Closures are expected to begin within weeks.
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.
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“It would be inappropriate to comment on individual bidders or interested parties at this stage in the process.”
The chain’s stores are expected to be bought by rival bargain retailers such as Poundland, Home Bargains, Primark and B&M, while landlords in some sites may divide up the space.
Property experts said it was unlikely any individual retailer would take more than 50 stores.
Wilko, founded in 1930 when JK Wilkinson opened his first store in Leicester, stepped into many high street gaps left by the collapse of Woolworths in late 2008.
The family, which still controlled the group until administrators were called in on 10 August, paid themselves £3m in dividends in the 12 months to the end of February 2022 despite falling to a loss that year, as first revealed by the Guardian.
Prendergast said: “GMB will not forget that had money not been siphoned out of the business, and warnings listened to, we might not be in this sorry state at all.”
