Total of 12,500 jobs at risk as chain disappears from high street after almost a century
Collapsed retailer Wilko will disappear from the high street by early October after a rescue deal for a large chunk of the discount chain fell through, leading to a likely 12,500 redundancies.
About 300 Wilko stores and its distribution centres will shut in the coming weeks, administrators at PwC confirmed on Monday, adding that, despite “extensive efforts” no part of the retail chain could be rescued in its current form.
Its demise will deal a further blow to hollowed-out high streets across the UK, which have to contend with empty lots as consumers opt for online purchases and out-of-town centres and as businesses wrestle with rising costs.
Following Wilko’s collapse in August, PwC had already sold 51 sites out of the chain’s total of 408 to its rival B&M for £13mn, while announcing 52 closures.
The GMB union, which represents thousands of Wilko staff and had told members of the looming closures, said it was “pushing” for any prospective new owners to retain as many Wilko staff as possible.
But it added that redundancy was now likely for all 12,500 workers. About 1,500 job losses had previously been announced.
“Although separate bids may be made for leases of groups of sites, these deals will not secure jobs,” the union said.
The absence of a comprehensive rescue deal for Wilko makes it one of the biggest retail casualties in the UK since the failures of Sir Philip Green’s retail empire and of department store chain Debenhams. More recently, McColl’s, the corner shop chain, was bought by Morrisons after its own collapse.
Like many high street chains, Wilko was hit by inflationary pressures and supply problems amid a cash crunch.
But the family-owned company, which started as a hardware store in Leicester in 1930 and subsequently capitalised on the growth in DIY, has struggled in particular to compete with nimbler rivals such as B&M and Home Bargains.
In a Daily Telegraph column on Monday, Dame Sharon White, who chairs John Lewis and Waitrose, made a plea for action to revive the country’s high streets, calling for changes to taxes and environmental policy, and for tougher rules to prevent shoplifting.
Doug Putman, the Canadian owner of music retailer HMV, had been working on a deal to acquire at least 100 Wilko sites but no deal was reached.
In comments on Monday to The Sun, Putman said: “It is with great disappointment that we can no longer continue in the purchase process for Wilko having worked with administrators and suppliers over several weeks to seek a viable way to rescue it as a going concern.”
Rival discount retailer Poundland was also among those to have expressed an interest in acquiring some of Wilko’s stores, according to two people close to the process. Poundland declined to comment.
Staff at 124 stores were told on Monday that those outlets would close on, or before, September 21, with the timing of the closure of the remaining sites to be announced in due course, PwC said.
Employees would be asked to work two extra days after the stores had closed and some staff would also stay on at the distribution centres for up to 14 days as operations were wound down, the GMB said.
Wilko borrowed £40mn from Hilco, the restructuring specialist, at the turn of the year to stay afloat. Hilco is separately advising PwC on the liquidation of some assets, including stock — a relationship the GMB has criticised previously. The union maintained that Hilco had too much influence over the administration process, a claim that Hilco denies.
Source: Financial Times
