Receive free UK retail industry updates
We’ll send you a myFT Daily Digest email rounding up the latest UK retail industry news every morning.
Wilko’s administrators have begun to break up the collapsed discount retailer amid a fractured process, with more than 1,300 new job losses and a sale of 51 stores announced separately on Tuesday.
Administrators at PwC said 52 unwanted stores will shut next week, leading to 1,016 redundancies, while there will be a further 299 jobs lost at the chain’s two distribution centres in Worksop and Newport, in addition to almost 300 job losses announced last week.
Earlier on Tuesday it was confirmed that rival discount retailer B&M has agreed to buy 51 of Wilko’s 400-store portfolio for £13mn. The fate of the rest of the UK high-street chain remains uncertain.
PwC said it was still in talks with others about salvaging parts of Wilko, which collapsed into administration last month, but warned “it has become clear from these discussions that some stores do not form part of any ongoing interest in the store portfolio”.
HMV’s owner Doug Putman is eyeing about 200 stores following discussions with Wilko’s suppliers, less than the 300 he originally planned to acquire, according to two people familiar with the matter. A representative for Putman declined to comment.
B&M said it would provide more details about its plans in November when it publishes its interim results but added that it would not retain the Wilko brand. It was unclear if any of the staff in the acquired stores will be kept on.
The administration process, now in its fourth week, descended into chaos last week after M2 Capital, a last-minute bidder for the entire chain, did not provide substantial proof that it could afford it, according to PwC, delaying talks with other suitors.
Lawyers at Shoosmiths, drafted in by PwC to help with the administration last month, wrote to Robert Mantse, chair of M2 Capital, on Monday to ask him to “direct all further communications” to them about Wilko as tensions rose.
Shoosmiths said in an email seen by the Financial Times that Mantse made “numerous baseless allegations” about the administration process not being fair and transparent, and that “many of [Mantse’s previous] communications have been aggressive in nature and contained various expletives and threats (including various messages left on WhatsApp voice notes for a PwC employee)”.
They added that if he contacted PwC directly, the administrators would seek legal advice “in respect of the steps available to them in relation to your actions to enable our clients to carry out their duties”.
M2 Capital did not make a non-refundable deposit payment requested by Shoosmiths, according to two people familiar with the matter. M2 Capital did not make the payment as more due diligence on a transaction was required, a person close to the firm said.
Mantse told the FT on Tuesday: “M2 Capital is not giving up on this, our firm belief is justice for all. I’m saving the 12,500 jobs that need to be saved.”
PwC said: “We are continuing to work with all bidders who can evidence satisfactory proof of funds.” Shoosmiths did not immediately respond to a request for comment.
Simon Arora, founder and former chief executive of B&M, last week wrote to M2 saying he was “astonished” they were bidding for the entire chain.
The demise of Wilko is one of the biggest retail casualties in the UK since 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.
Like many high street chains, Wilko was hit by inflationary pressures and supply chain problems amid a cash crunch.
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.
