Thousands of staff at UK discount retailer Wilko Ltd. are set to lose their jobs after a rescue deal collapsed.
Canadian tycoon Doug Putman had planned to save a substantial number of Wilko’s 400 stores after the company entered insolvency last month, but on Monday he said talks had ended without an agreement.
The GMB union said Wilko’s distribution centers would close on Friday next week, following a meeting with administrators PricewaterhouseCoopers LLP, meaning redundancy is now likely for all 12,500 workers.
Putman, whose family also owns retailers such as Toys R Us in Canada, said “the costs of running Wilko’s legacy operations infrastructure” were partly to blame for talks ending. In a statement, he said financing had been in place and a deal was sought for several weeks.
About 100 of the shops could now be sold to Poundland, a rival discount retailer, a person familiar with the situation said. Last week, another budget chain — B&M European Value Retail SA — said it had agreed to acquire as many as 51 Wilko stores for a maximum price of £13 million ($16.3 million).
Pepco Group NV, which owns Poundland, declined to comment.
PwC declined to comment.
Nadine Houghton, GMB national officer, said Wilko “should have thrived in a bargain retail sector that is otherwise strong, but it was run into the ground by the business owners.”
Wilko, which sells everything from stationery to confectionery and household cleaning products, ran out of cash amid weak footfall. A £40 million lifeline earlier this year from Homebase-owner Hilco UK was not enough to save the company.
Putman is best known in the UK for his rescue of music retailer HMV in 2019. It is reopening a flagship store on Oxford Street in London’s west end this year and has returned to other major cities such as the Irish capital of Dublin.
(Updates with comments from Putman and the GMB, and detail on Poundland, from the third paragraph.)
