Wilko administrators began to dismantle the discount retailer in a fragmented process. More than 1,300 jobs were lost and 51 stores were sold separately on Tuesday.
PwC administrators announced that 52 stores would close next week. This will result in 1,016 job losses. In addition, 299 more jobs will be lost at the two distribution centres of the chain in Worksop, and Newport.
On Tuesday, it was announced that the rival discount retailer B&M had agreed to purchase 51 of Wilko’s 400-store portfolio. The price is PS13mn. The future of the UK’s high-street chain is still uncertain.
PwC stated that it is still in discussions with others to salvage parts of Wilko which collapsed in administration last month. However, the firm warned, “It has become apparent from these conversations that some stores don’t form part of any continued interest in store portfolio”.
According to two sources familiar with the situation, Doug Putman, the owner of HMV, is looking at 200 stores after discussions with Wilko’s suppliers. This is less than the 300 stores he had originally planned to buy. Putman’s representative declined to comment.
B&M stated that more information about its plans would be provided in November, when the company publishes interim results. However, it added that Wilko would no longer be retained. Uncertainty surrounded whether any staff from the acquired stores would be retained.
According to PwC the administration process has descended into chaos in its fourth weeks after M2 Capital (a late-minute bidder who was interested in purchasing the entire chain) failed to provide sufficient proof that they could afford it. This delayed talks with other potential suitors.
As tensions grew, lawyers at Shoosmiths – hired by PwC last month to assist with administration – wrote Robert Mantse on Monday, asking him to “direct any further communication” about Wilko to them.
Shoosmiths stated in an email Mantse had made “numerous unfounded allegations” that the administration process was not fair and transparent. “Many of [Mantse’s previous] communications were aggressive in nature, containing various expletives and threatening messages (including various voice notes left on WhatsApp for a PwC staff member).
The administrators said that if the client contacted PwC, they would consult with a lawyer “to determine the legal steps available for them to take in order to allow our clients to perform their duties”.
According to two sources familiar with the situation, M2 Capital failed to make the non-refundable payment requested by Shoosmiths. M2 Capital didn’t make the payment because more due diligence was needed on the transaction, according to a person familiar with the firm.
Mantse said on Tuesday that M2 Capital would not give up, as we are firm believers in justice for everyone. “I’m saving 12,500 jobs, which are needed.”
PwC stated: “We continue to work with bidders that can provide satisfactory proof of funding.” Shoosmiths didn’t immediately respond to an inquiry for comment.
Simon Arora, former CEO of B&M and founder of , wrote to M2 last week, saying that he was surprised they were bidding on the entire chain.
Wilko’s demise is one of the UK’s biggest retail losses since the collapses of Sir Philip Green’s retail chain and Debenhams department store, as well as McColl’s corner shop, which was later bought by Morrisons.
Wilko, like many high-street chains, was affected by inflationary pressures as well as supply chain issues amid a cash shortage.
Hilco, an investor in special situations, is advising PwC separately on possible liquidation of certain assets, such as stock, if there is no bidder.