Administrators of stricken retailer Wilko will begin making redundancies at the retailer’s head office, distribution, and support centres this week and next after a last-minute bid by M2 Capital fell through.
The private equity firm put forward an offer to take on the entire business including its 400 stores late on Friday, however the firm failed to pass PwC’s due diligence checks.
In an update shared on Thursday, PwC said the decision had been taken to make 269 employees at the retailer’s support centre in Worksop redundant, effective from close of business on Monday (4 September).
Further redundancies across the retailer’s two distribution centres in Worksop and Newport are expected to be announced early next week. According to Sky News, the total number of jobs at risk is 1,300.
Fourteen employees at Kin Limited, a subsidiary of Wilko, have also been made redundant, effective Monday, after no viable offers were made for the business.
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Joint administrator Jane Steer said: “It’s with great sadness that we announce these redundancies. We’re incredibly grateful to these team members for the support and dedication they’ve shown to the company, particularly over the last few very difficult weeks.
“We will continue to do all that we can to support staff through this period of difficult upheaval, and to maximise their opportunities for a rapid return to work.
“Our priority is to ensure that all team members affected by redundancy are assisted in processing their claims with immediate effect.
“We will be circulating correspondence to all staff as soon as possible which will outline the support available to complete redundancy payment forms. Advice and assistance will also be available from Job Centre Plus and other agencies.”
It is understood that administrators are still mulling over HMV owner Doug Putman’s offer, which would see him take on the majority of Wilko’s stores and its brand name.
It is understood that administrators were sceptical about the credibility of M2 Capital’s £90m offer on behalf of an unnamed billionaire in the UK, setting the firm a deadline of 5pm on Wednesday to provide evidence it had proof of funds.
M2 chairman Robert Mantse expressed concerns on Tuesday that administrators at PwC were unfairly blocking his offer when they requested further evidence, with the GMB then claiming the administrators were not properly considering the bids.
Email correspondence between Mantse and PwC, seen by The Times, show that he wanted access to Wilko’s commercially sensitive data without confirming that he could fund a bid.
A source close to the talks told the publication it was “the first time I’ve seen something at this level of extremity”, adding that Mantse was unable to answer “very normal questions”.
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