Wilko is to start cutting jobs, letting go of its support staff such as HR on Monday and distribution staff later this week, the union that represents a third of its employees said, as the only bid to save its entire business collapsed.
The GMB Union said it had been told by administrators at PwC that “the one bid for the entire business”, understood to be from private equity firm M2, has fallen through, after the bidder “failed to provide the necessary evidence” to prove it could afford to buy the discount retailer.
M2 emerged as a possible rescue bidder for Wilko over the weekend, claiming it aimed to save all of Wilko’s staff and give them part-ownership of the chain.
But questions soon emerged over whether it had the financial backing in place for such a deal. Adminsitrators at PwC set a deadline of yesterday for M2 to submit evidence it had that backing.
Monday will be the last day of work for Wilko’s commercial trading team, IT, finance, Legal and HR. For those at distribution centres, redundancies will start next week.
The future for those working at Wilko’s 400 shops has not yet been decided, as other bidders may still save the retail estate. However, last week the union warned that the “majority” of Wilko employees were likely to lose their jobs by the end of the process. Of the 400 stores, 26 are in London.
Andy Prendergast, GMB national secretary, said: "This news is obviously devastating for our members in the support centre and the DCs.
“GMB will do everything we can moving forwards to support members and wish there had been a better outcome.
“Despite leaving no stone unturned, GMB simply could not reverse the years of mismanagement under the recent regime and cannot ignore the incompetence which has cost people their jobs.
"For staff in stores and on-line, PWC are continuing to assess bids and we remain hopeful that there is one from a viable buyer on the table.
“However, at this stage we cannot in any way guarantee this and must therefore continue to prepare for the worst.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘’There will be huge disappointment among Wilko’s staff and loyal customers that this potential deal to save the chain has fallen through. It appears M2 Capital has failed to jump the necessary administrative hurdles, including proof of funding, to meet the administrators’ requirements.
“Although one lifeline has been cut, another buoy is still in the distance, given that HMV owner Doug Putman is still believed to be in talks with PwC to acquire parts of the business. However, a full rescue is now off the cards, and hundreds of jobs will go. Mr Putman’s offer didn’t guarantee all jobs, unlike the proposals from M2 Capital.
“Given the difficulties Wilko has experienced, trying to manage a sprawling store estate in some more expensive high street locations, it isn’t surprising. It will clearly be devastating for so many staff who have kept the tills ringing for years.”
Wilko collapsed into adminsitration earlier this month.