Wilko: Not Good News

Posted on Sep 12, 2023. by NTI

The Wilko Administration saga has taken a turn for the worst as it appears that the proposed deal with Doug Putman, the Canadian billionaire who now owns HMV, to buy around 100 of the Wilko stores, has resulted in his company Putman Investments walking away from the potential deal.

Administrators at PwC, who had been attempting to rescue various parts of Wilko, said last night (Monday 11 September) that it had “become clear that no significant part of the Wilko operations can be rescued as a going concern” following Putman’s withdrawal. Zelf Hussain, one of the joint Administrators, said: “Despite the significant and intensive efforts of both ourselves and Putman Investments ... a transaction could not be progressed due to the inability to reduce central infrastructure costs quickly enough to make a deal commercially viable.”

This means that all of Wilko’s retail estate will be shut by early October. Staff at 124 stores have been informed that they will close on, or before Thursday 21 September, and the closure of the remaining 222 stores will be announced in due course. B&M’s deal to buy 51 stores does not include the Wilko employees with those stores.

Its two distribution sites will apparently close on Friday and the support centre will also be wound down.

In a small crumb of good news for the Administrators, it is hoped that a small number of jobs may be saved through a sale of the brand and website to The Range, a rival discount chain. Poundland has now emerged as a potential bidder for 70 of the stores, and may re-hire some of the redundant staff but this is currently unclear.

It is expected that up to 9,100 redundancies may be made from the stores, 886 from the warehouse and 210 from the support centre. This comes as Majestic Wine Warehouse are currently recruiting around 200 staff members for what they think will be their biggest-ever Christmas.

In other news, Sharon White, boss of John Lewis, has called on government ministers to review the health of town centres with their “seemingly endless” rows of charity shops and boarded up storefronts. She claims that high streets are at risk of “becoming a looting ground for emboldened shoplifters and organised gangs”. There appears to be no grounds for her accusation of criminal gangs roaming the streets, presumably searching for a nice organic sourdough loaf from Waitrose.

There is some good news, however. Primark has raised its profit outlook for the second time this year, as sales performed better than expected, following the “unusually variable and unseasonable weather” across the ‘summer’, as its allegedly known. Primark’s total revenue is forecast to jump by 15% to £9bn.

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