Wilko, the collapsed discount retailer, will be gone from the high streets by early October. A rescue deal for the chain’s largest chunk fell through and led to the potential of 12,500 job losses.
PwC administrators confirmed that about 300 Wilko retail stores and distribution centres would close in the next few weeks. They added that despite “extensive attempts” the retail chain in its present form could not be saved.
The closure of the store will be a further blow for UK high streets, already hollowed out by online shopping and centres outside towns. Businesses are also struggling with rising costs.
PwC sold 51 sites of Wilko’s 408 total to B&M, for a price of £13mn. Meanwhile, 52 closures were announced.
The GMB, which represents Wilko employees and has informed them of the impending closures, stated that it would “push” any potential new owners to retain Wilko’s staff in as many numbers as possible.
It added that it was likely that all 12 500 workers would be laid off. Previously, about 1,500 job losses were announced.
The union stated that “even though separate bids for leasing groups of sites may be made, these deals won’t secure jobs.”
Wilko is one of the UK’s biggest retail victims since Sir Philip Greens retail empire collapsed and department store chain Debenhams failed. Morrisons bought McColl’s corner shop after it collapsed.
Wilko, like many high-street chains, was affected by inflationary pressures as well as supply issues amid a cash shortage.
The family-owned business, which began as a Leicester hardware store in 1930, and then capitalised on DIY’s growth, has found it difficult to compete, in particular, with more agile rivals, such as B&M or Home Bargains.
In a Daily Telegraph article on Monday, Dame Sharon White (chairperson of John Lewis and Waitrose) called for more action to revitalize the high streets in the UK. She demanded changes to tax and environmental policies, as well as tougher rules against shoplifting.
Doug Putman, Canadian owner of HMV music retailer, was working on a deal for at least 100 Wilko stores but no deal could be reached.
Putman told The Sun in a statement on Monday: “It’s with great regret that we cannot continue the purchase process for Wilko after working with administrators and suppliers to find a viable solution to save it as a continuing concern over several weeks.”
According to two sources close to the deal, Poundland, a rival discount retailer had also expressed interest in buying some Wilko’s shops. Poundland refused to comment.
PwC reported that the staff at 124 outlets were informed on Monday of their closure on or before September 21. The timing for the closing of the rest of the sites will be announced later.
The GMB stated that employees would be required to work an extra two days after stores close and some staff will also remain at distribution centres for as long as 14 days to wind down operations.
Wilko borrowed £40mn (£30m) from Hilco at the beginning of the year in order to stay afloat. Hilco advises PwC separately on the liquidation and sale of certain assets, such as stock. The GMB has previously criticised this relationship. Hilco has denied the union’s claim that Hilco exerted too much influence on the administration process.