Wilko could face more job cuts as Putman rescue deal fails
The proposed takeover deal of Wilko involving the owner of HMV has collapsed.
It was reported that Doug Putman has now scrapped talks with administrators PricewaterhouseCoopers (PwC).
It was over a scaled-down deal to acquire around 100 Wilko stores.
The transaction has collapsed due to the alleged significant central costs of assuming the chain’s infrastructure.
An insider has suggested that PwC may now seek to strike a deal with the owner of Poundland to transfer approximately 100 stores.
However, it remains uncertain if the company includes employees at those locations in the transaction.
The previous agreement saw 51 Wilko sites sold to B&M European Value Retail.
Meanwhile, The Range, another value retailer, is in advanced discussions to purchase Wilko’s brand and online assets.
The failure of negotiations with Doug Putman, following weeks of talks, represents a significant setback in the hopes of saving thousands of jobs.
Wilko’s pre-administration workforce consists of 12,500 employees.
PwC has announced approximately 1,600 redundancies since the family-owned chain entered insolvency last month.
Doug Putman had tried to reshape the deal multiple times.
He came close to signing an agreement to take over more than a quarter of Wilko’s stores as recently as last Thursday, September 7.
Most of the workforce could go
With these latest developments, most of Wilko’s workforce risks losing their jobs unless another bidder emerges.
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Administrator PwC was focusing on preserving as many Wilko jobs as possible while maximizing value for creditors.
The struggling retailer had been seeking external investment for several months, with increasing urgency in the past four weeks since PwC was appointed administrator.
Founded by the Wilkinson family in 1930, Wilko offers homeware and garden furniture at discounted prices.
Like many high street retailers, it has faced inflationary pressures and supply chain disruptions.
In recent months, it has been working to finalize a company voluntary arrangement (CVA) to secure major rent reductions for hundreds of stores while avoiding closures.