More than 10,000 staff will lose their jobs at struggling UK household goods retailer Wilko, administrators said Monday, after last-ditch talks on a rescue deal with the owner of the HMV music store chain collapsed.
Canadian businessman Doug Putman had been in talks with administrators PricewaterhouseCoopers (PwC) to buy some 200 shops operated by Wilko, which went bust in August.
But both Putman and PwC said that those discussions to rescue it as a going concern had reached an end — despite having backing from Wilko management, staff and PwC — as it was revealed that as many as 10,196 extra employees face the axe.
PwC had already announced in recent weeks that more than 1,600 staff would be made redundant.
“The joint administrators have explored all potential opportunities to save the business,” PwC said in a statement on Monday.
“However, despite extensive efforts, it has become clear that no significant part of the Wilko operations can be rescued as a going concern.
“As a result, the joint administrators have today informed all staff that they will sadly commence the closure of all Wilko stores, the two distribution centres and the cessation of the majority of activities of the support centre.”
The statement noted that all shops are set to be closed by early October, resulting in 9,100 redundancies of store employees.
Distribution centre operations are expected to shutter on Friday, with “the majority” of its 886 remaining employees made redundant then.
Further lay-offs of 210 remaining support centre staff will also occur before early October as operations wind down, administrators said.
B&M European Value Retail has agreed a £13-million ($16.3-million) deal to buy 51 Wilko stores, but without saying how jobs in those operations would be affected.
Those stores will also close and reopen under B&M’s branding, according to administrators.
Wilko, which operated some 400 stores across the UK and online, announced its collapse on August 10, putting 12,500 jobs at risk.
It blamed stubbornly high inflation and interest rates affecting businesses and consumers.
Hopes had been resting on a last-gasp deal with Putman, but he confirmed separately Monday that that would not be happening.
“It is with great disappointment that we can no longer continue in the purchase process for Wilko,” the businessman said in a statement.
“We had financing in place and received the full support of PwC, Wilko management and staff representatives.
“A stable foundation could not be secured to ensure long-term success for the business and its people in the way that we would have wanted.”
A source familiar with the matter confirmed to AFP that administrators were also in discussions with low-cost retailers Poundland and Home Bargains over a possible partial rescue deal.
But those talks also failed.
In its latest update, PwC said staff at 124 stores were informed Monday that those outlets will close on or before September 21, while timings for the closure of the remaining 222 stores would be announced “in due course”.
The GMB union’s national officer Nadine Houghton said earlier Monday Wilko’s demise “isn’t a tragedy without cause”.
She claimed the firm, which was founded in 1930 in central England, had been “run into the ground”, and loyal staff would suffer the consequences.