B&M has confirmed that it has agreed to buy up to 51 Wilko stores from administrators, PwC, in a deal worth £13m. In an update to investors, B&M European Value Retail, said: “The consideration is fully funded from existing cash reserves and the acquisition is not expected to be conditional on any regulatory clearances.”
The retailer, whose product range includes gifts, said that an update on the timing of the new store openings will be provided in its first half interim results announcement on 9 November 2023. Meanwhile, PwC is continuing negotiations with Doug Putman, the owner of HMV.
“Despite the deal, the future of the remaining Wilko stores (350+) still remains in doubt, meaning thousands of high street workers still face losing their jobs, and unsecured creditors still don’t know where they stand,” comments Tania Clench, legal director in the restructuring and insolvency team at Cripps. “The dialogue with Doug Putman appears still to be ongoing, but it looks like if that deal is to be reached, fewer stores than originally anticipated will be acquired. So, after payment of the administrators’ fees and paying out Hilco as the secured creditor, what will there be left to pay preferential and/or unsecured creditors? It is too early to tell, which means unsecured creditors will be wary of their next steps. Wilko is reportedly in £40m debt to Hilco and needs at least another £20m for ordering new stock, and yet, looking at the empty shelves in many of Wilko’s stores, it does not look like stock is being replenished. Understandably, suppliers will want to ensure they are being paid for the supply of stock.
She continues: “Anyone who takes on Wilko will need to invest time and cash in bringing the stores and the brand in line with what its rivals are offering, joining up the online and in-store operations, revamping the look of their stores while still safeguarding the shopping experience many look to have at Wilko. Wilko’s retail business proposition will need to be clear going forward if the business is to survive and it is clear that Wilko is a very much loved and valued brand by many up and down the country. For this reason, I would not be surprised to see other potential bids for parts of the business coming through and with these, hopefully, jobs being saved.”
