Wilko rescue collapses - report

A bid to buy the entire Wilko business has reportedly fallen through.

According to Sky News, private equity firm M2 Capital had hoped to buy the homeware chain and its 400 stores, but the deal is off following talks with administrators PwC.

Job losses are now expected among Wilko's head office, distribution and support centre staff, Sky said.

Around 1,300 roles are at immediate risk of redundancy, but some of those will be saved as they are needed to keep stores running.

The retail chain, which employs around 12,500 staff in total across the country, collapsed earlier this month after struggling from inflationary pressures, competition from rivals and supply chain challenges. But its branches have remained open since then in the hope a buyer can be found.

It was understood that other bids for parts of the business have been received, which administrators will now focus on.

Poundland-owner Pepco Group and B&M European Value Retail are among the firms aiming to acquire part of Wilko's store estate.

HMV owner Doug Putman also expressed an interest in making a bid prior to PwC's deadline of last Friday.

According to Sky, no store closures or store redundancies are expected this week.

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.

"A slimmed down Wilko, without the weight of underperforming shops dragging it down, still has a small chance of survival. The brand is still strong and it has been a draw for value conscious shoppers, but it’s going to be an uphill struggle. Competition from nimbler rivals, more focused on retail parks and cheaper spots in town and city centres, is intense. If Mr Putman doesn’t come through as a white knight, rivals are likely to pick over the scraps and buy up some of the more popular shops into their portfolios. Wilko once filled redundant Woolworth stores, and there is a chance it could suffer the same fate of being swallowed by its rivals."