A new week brings fresh headlines about Wilko’s struggle to find a rescue deal that would save most of its 400 stores and keep its 12,500 staff employed but, as of the time of writing, the hunt for a buyer rumbles on.
Wilko’s troubles were the source of countless headlines before the business collapsed. Since the appointment of administrators over two weeks ago, it has turned into a veritable media circus with multiple retailers, business owners and private equity firms throwing their hats in the ring to snap up one part of the ailing business or another.
The flurry of recent interest in the business has been best encapsulated by the emergence of British billionaire and founder of investment firm Flacks Group Michael Flacks. His group was linked with potentially financing a deal for a private equity firm to save Wilko, but this rumour was firmly shut down after he told The Sun: “I am not interested in Wilko, I believe it should have died years ago. It needs to die.”
This episode not only highlighted how tough it would be to pull off a deal to save the stricken chain, but it also really drove home the fact that tens of thousands of jobs could potentially be lost if Wilko really is left to just “die”.
“There are still 11,000 Wilko workers left in limbo with no definitive answer as to whether they will have a job by the end of the month”
More than 280 redundancies had already been made last week, with administrator PwC announcing a further 1,332 job losses and 51 store closures from next week.
This is unlikely to be the end of redundancies as there are still 11,000 Wilko workers left in limbo with no definitive answer as to whether they will have a job by the end of the month.
Rival value retailer B&M snapped up 51 Wilko stores this week for the price of £13m, but no further details were given as to which sites would be brought under its brand or if current employees would be kept on.
Other value retailers such as Poundland, The Range and The Original Factory Shop have been linked to potential acquisitions of stores under their own brands, which could mean the end of the Wilko brand name.
HMV owner Doug Putman is still in talks with PwC after initially offering to take over 300 stores. Supply issues have thrown a spanner in the works after suppliers, including Unilever and Procter & Gamble, “demanded their debts be repaid and paid upfront” to guarantee future supply.
Putman is now expected to obtain about 200 stores under the Wilko brand, which could see several thousand jobs saved. But if this goes ahead, what will happen to the remaining 150 stores and employees?
There was hope last week when private equity and advisory firm M2 Capital confidently announced that it would snatch up all 400 Wilko stores and keep all staff for two years, putting forward a £90m bid on behalf of a British billionaire — that turning out to be Flack. As he later rubbished the retailer to the media, it meant another potential deal was dead in the water.
While some bids have been confusing and unrealistic, others have been reasonable and logical — but media speculation over bidders has taken away from the fact that this is a distressing situation for thousands across the country.
The GMB union, which represents Wilko workers, has accused PwC of not properly considering bids that could save thousands of jobs, as many were dismissed or not dealt with quickly enough to prevent redundancies.
GMB national secretary Andy Prendergast said: “12,500 jobs cannot be sacrificed for a few pence in the pound for creditors. If there are viable bids that protect jobs, these have to be prioritised.”
“Constant leaks to the media and a lack of confidentiality mean staff are watching the situation unfold at the same time as the rest of us”
Retailers including Dunelm, Hobbycraft and The Works offered interviews to Wilko workers when administration was announced, but this doesn’t distract from the fact that staff haven’t had clarity over whether they definitely have to find a new job.
Workers have been ill-informed about the situation as constant leaks to the media and a lack of confidentiality mean staff are watching the situation unfold at the same time as the rest of us, as one of the most covered stories in recent retail history.
As much as it has been interesting to read about who will pick the bones of the remaining Wilko business, we must not let this distract us from the real issue at hand — that thousands of jobs and livelihoods will be lost as a result of multiple failures from Wilko and its administrators.
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