Fresh hope to save Wilko and protect 12,000 jobs
Fresh hope to save Wilko and protect 12,000 jobs: Private equity firm tables 11th-hour £90m rescue deal after HMV owner announce his interest in chain
- READ MORE: Bargain chain Wilko closing shops: is YOUR local store affected?
A private equity firm has offered an £90million rescue deal in a fresh bid to save Wilko and its 12,000 jobs – just days after after HMV’s owner announced his interest in the retail chain.
The equity firm, M2 Capital, confirmed today it has put in the 11th-hour bid to save Wilko, which is on the brink of collapse after falling into administration earlier this month.
The firm’s managing director Robert Mantse told the BBC that if his offer was accepted by administrators for Wilko, PricewaterhouseCoopers (PwC), M2 will endeavour to ‘guarantee all employees’ jobs for two years’.
Last week HMV tycoon Doug Putman emerged as Wilko’s most likely saviour with him tabling a last-ditch multi-million-pound rescue offer.
The 39-year-old owns the British CD seller and Canada’s largest toy business Toys R Us, and in talks with administrators PwC to buy part of the business.
A private equity firm has offered an £90million rescue deal in a fresh bid to save Wilko and its 12,000 jobs
The equity firm, M2 Capital, confirmed today it has put in the 11th-hour bid to save Wilko. Pictured is the firm’s managing director Robert Mantse
Retail mogul Doug Putman, 39, whose firm, Sunrise Records, bought HMV in 2019, is understood to currently be in talks with Wilko bosses
He has proposed to keep around 200 of its 400 shops and between 3,000 and 4,000 of its 12,000 staff. The deal would also mean the survival of the Wilko brand.
Administrators were said to be working through the weekend to analyse a final bid from Mr Putman, in order to secure the best outcome for creditors and staff.
The retail chain’s profits plummeted by £38.7 million last year as sales fell by 3.3 per cent to £1.2 billion, and with profits taking a blow from rising inflation.
The budget-chain had become a staple for Britain’s shoppers who are after stationery, gardening supplies, homeware, cleaning products, or just a pot of pick-and-mix.
It comes as today Wilko’s former boss of 15 years Gordon Brown criticised the founder’s granddaughter Lisa Wilkinson for ditching the tried-and-tested strategy of discount prices, and for veering away from ‘their successful model of low price, low cost’.
Wilko’s managing director from 1992 to 2007 told The Mail on Sunday: ‘Wilko was a convenience store where you went to buy bits and pieces for your house for a low price.’
He added: ‘They paid consultants who helped them bring about a new format for stores.
‘But they were less aggressive on pricing and their approach on the shop floor.’
Wilko’s former managing director from 1992 to 2007 Gordon Brown has criticised management for veering away from ‘their successful model of low price, low cost’
Lisa Wilkinson says they would have only survived for a couple of months longer if they had not paid out any dividends
Ms Wilkinson is the granddaughter of founder James Kempsey Wilkinson and took over the reins of the chain in 2014 when she bought her majority stake in Wilko from cousin Karin Swann, also a granddaughter of the founder.
Wilko’s ailing finances did not stop the chain from dishing out £77 million to the owners and former shareholders in the decade before its collapse.
READ MORE: Wilko heads towards administration: Why is the UK brand on the brink of collapse?
The Mail on Sunday revealed earlier this month the biggest payout was £63 million in 2015 when – after 85 years of running the business together – one side of the Wilkinson family sold their shares to the other.
The payouts have been heavily criticised by union bosses with 12,000 staff members on the verge of becoming unemployed and a £50 million black hole in the company’s pension pot, reported the BBC.
GMB national secretary, Andy Prendergast, said: ‘GMB union will continue to support members through this process and will fight to ensure members are consulted as per the law and that you receive every penny you are entitled to.
‘We will fight to ensure Wilko bosses are held accountable for the simple reason our members deserve so much better.
‘GMB will not forget the incompetence that has led to this collapse and we will not forget the dividends paid to the millionaires who gambled your jobs on their whims.’
Ms Wilkinson defended the huge payouts during the loss-making period and pointed to its £100 million worth of assets and a healthy bank balance of £58 million at the time.
Wilko’s ailing finances did not stop the chain from dishing out £77 million to the owners and former shareholders in the decade before its collapse. There is a reported £50 million black hole in its pension pot
The fate of workers hangs in the balance after administrator PwC said it had been unable to secure a deal for all 400 Wilko stores
She told The Times ‘the board checked… there was sufficient cash, we went through the right governance, the auditors checked it off’.
‘Is there a bit of me lying awake at night saying I wish we’d never taken a penny of dividends out?,’ she said.
READ MORE: Full list of Wilko stores at risk of closing down as High Street retailer on brink of administration
‘Well, genuinely, would it have made any difference to where we are today? It might have made us survive a couple of months longer. What we have taken out really wouldn’t have made a difference.’
Nadine Houghton, of the GMB union that represents 3,500 Wilko staff, called on Ms Wilkinson to dip into her own pocket and ‘use some of her millions to help prop up workers’ pension pots’.
She added: ‘Lisa Wilkinson hasn’t even had the decency to speak to workers.’
Answering the door at their £3 million home in Cambridge, Wilkinson’s husband Chris Phillips said: ‘I’m sorry, I don’t want to be rude, but we don’t want to talk about it.’ He then closed the door without saying another word.
AHWL, the management company for the remaining family owners after the split, said family members had not received dividends since 2017. AHWL owned 99.7 per cent of Wilko up until its collapse.
The fate of workers hangs in the balance after administrator PwC said it had been unable to secure a deal for all 400 Wilko stores.
The retail chain’s profits plummeted by £38.7 million last year as sales fell by 3.3 per cent to £1.2 billion, and with profits taking a blow from rising inflation
Billionaire B&M brothers Simon, Bobby and Robin Arora had been touted as eyeing up a bid for the hardware and household discounter.
While rumours have swirled that rivals Poundland, Home Bargains, and The Range were also potential suitors.
Meanwhile, Poundstretcher has ruled itself out of any rescue package.
Wilko, known then as Wilkinson’s, started as a single hardware store 151 Charnwood Street in Leicester in 1930.
The shop – known as ‘Old Charney’ was opened by JK Wilkinson and then Mary Cooper, who were engaged to be married at the time.
By 1940, the Wilkinson started to use motorised transport, a Jowett van, for customer deliveries.
Most stores managed to stay open during the Second World War to keep residents’ air raid shelters and converted cellars well stocked.
The chain continued to grow and by the end of the 1990s there were 152 stores across the UK.
In 2008 Wilko expanded further afield with its first ever Wilko Asia. Five years later it spread to the Indian sub-continent with an office in Delhi. In 2018 another office opens in Istanbul in Turkey and it is rebranded as Wilko Worldwide.
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