Plans for redundancies and store closures at Wilko have been put on hold as administrators consider two potential last-ditch rescue bids that emerged over the bank holiday weekend.
Administrators from PricewaterhouseCoopers, who were called in earlier this month as Wilko ran short of cash, had warned that redundancies would start within weeks as there had been no viable bids for the bulk of the company. The group employs nearly 12,500 people.
Doug Putman, the owner of HMV in the UK and Toys R Us in Canada, is understood to have increased his bid on Friday’s deadline, offering to take on up to 350 of Wilko’s 400 stores and ensure the main creditors – led by the restructuring specialist Hilco – were paid. A previous bid from Putman would have involved saving 200 stores.
Another potential offer has emerged from M2 Capital, a restructuring specialist that claims to own the Como hotels group and is in the process of buying the Michigan-based car parts maker Superior Industries. M2 is understood to have put forward a bid that would keep the entire Wilko chain trading.
M2 has written to administrators questioning whether the bid process was “fair and transparent” as it was given a deadline to provide details of its funding on a UK bank holiday.
However, a source close to the process questioned the credibility of the M2 bid, which was put forward very late on the final day for offers, and whether the finance group had the required funds available.
Andy Prendergast, the national secretary of the GMB union, which represents thousands of Wilko staff, said: “There appears to be a glimmer of hope but there is still a long way to go.
“We don’t want to get carried away as our members deserve certainty, but we are hopeful that jobs can be protected.”
He said the union had been told by PwC that any redundancy process for workers was on hold.
A spokesperson for PwC said: “Since our appointment as administrators of Wilko we have worked relentlessly to secure a sale of the business. We are actively engaging with all interested parties and assessing the deliverability of all bids made.
“As administrators we’re intent on achieving the best outcome for everyone involved while preserving as many jobs as possible and adhering to our statutory duty to act in the best interests of the creditors as a whole.
“It would be inappropriate to comment on individual bidders or interested parties at this stage in the process.”
As administrator, PwC has an obligation to try to protect the interests of creditors including Hilco, which is owed £40m.
The GMB has expressed concern about the influence of Hilco, which is also acting as an adviser to the administrators, and said that the private equity firm’s interests did not necessarily align with retaining workers’ jobs.
Any bid is likely to mean the closure of dozens of Wilko outlets, potentially leaving gaps on high streets across the UK. The retailer, which was founded in 1930 when JK Wilkinson opened his first store in Leicester, stepped into stores left empty when Woolworths collapsed in 2008.
Rival bargain retailers – such as Poundland, Home Bargains, Primark and B&M – are likely buyers of any good sites, although they may not retain the existing staff.
The Wilkinson family, which still controlled the group until administrators were called in on 10 August, paid themselves £3m in dividends in the 12 months to the end of February 2022 despite falling to a loss that year, as first revealed by the Guardian.
