UK retail chain Wilko on brink as talks with HMV owner collapse

(Alliance News) - A last-ditch attempt by the owner of HMV music stores to strike a rescue deal for stricken retailer Wilko has failed.

Administrators for the UK high street discount retail chain had been in discussions with Doug Putman, of Putman Investments, over a deal to buy around 200 Wilko shops.

However, the PA news agency understands that these talks have now collapsed, intensifying fears over the future of thousands of jobs.

Putman, founder of Putman Investments, said: "It is with great disappointment that we can no longer continue in the purchase process for Wilko having worked with administrators and suppliers over several weeks to seek a viable way to rescue it as a going concern.

"We had financing in place and received the full support of PwC, Wilko management and staff representatives, which we are deeply thankful for considering what a challenging time it has been for them.

"However, commitment to overhauling the trading framework of the business with partners and the costs of running Wilko's legacy operations infrastructure combined has meant that a stable foundation could not be secured to ensure long-term success for the business and its people in the way that we would have wanted."

Sky News has reported that administrators from PwC are now in talks with Poundland over a potential deal to offload about 100 stores.

Other high street chains including Range and Home Bargains have also reportedly signalled their interest over potentially buying the Wilko brand or stores.

Wilko, which employed around 12,500 staff, has already announced a GBP13 million deal to sell 51 shops to B&M European Value Retail SA, although the rival discounter has not agreed to take on Wilko workers as part of the deal.

Administrators have already announced more than 1,600 redundancies at Wilko in recent weeks.

This week the retailer will shut 52 shops in a move which will lead to 1,016 redundancies.

It said 24 of its shops will close on Tuesday September 12, with a further 28 shops due to shut on Thursday September 14.

PwC has also announced hundreds of redundancies affecting workers at the firm's warehouses in Worksop and Newport, as well as cuts at its support centre.

The 90-year-old retail chain tumbled into administration early last month after it came under pressure from weak consumer spending and debts to suppliers.

By Henry Saker-Clark, PA Deputy Business Editor

source: PA

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