B&M Secures 51 Wilko Stores in a £13 Million Lifeline Agreement

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Wilko store (stock.adobe.com)
Wilko store (stock.adobe.com)
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B&M has completed the acquisition of 51 Wilko stores for £13 million following Wilko’s financial administration. These stores are slated for a rebranding under the B&M name, as the FTSE 100 retailer did not secure ownership of Wilko’s brand or any of its intellectual assets.

An announcement regarding the timeline for the grand openings of these rebranded B&M locations is expected in November.

Amid reports of a potential larger rescue deal led by HMV owner Doug Putnam facing obstacles, a significant number of Wilko stores may face closure.

Wilko’s headquarters initiated staff layoffs yesterday, and warehouse employees are also expected to lose their jobs this week. Unfortunately, there were no offers on the table that included support staff for Wilko.

Nevertheless, this particular deal ensures that a portion of the shop staff will retain their positions.

B&M has disclosed that it will fund the acquisition of these stores through its cash reserves. Specific details regarding which stores are included in the deal and whether all store employees will retain their jobs have not been revealed.

Last month, administrators from PwC took control of Wilko after attempts to sell the entire business proved unsuccessful. Their primary goal has been to sell as many stores as possible to generate value for the company’s creditors.

According to reports from Sky News, Doug Putnam, who successfully revived HMV, initially aimed to purchase approximately 300 of Wilko’s 400 stores. However, due to difficulties with suppliers, it is now anticipated that he will acquire closer to 200 stores.

The financial community expressed its dissatisfaction with the agreement, resulting in a 4% drop in B&M shares today.

Wilko, previously recognized as Wilkinson Hardware Stores, boasts a network of 400 stores and a workforce of approximately 12,000 individuals.

Reports have suggested that various discount retail entities, such as Pepco, the parent company of Poundland, and The Range, are being considered as potential purchasers for Wilko’s retail outlets.

Danni Hewson, AJ Bell head of financial analysis, said: ““Wilko’s store locations are a blessing and a curse, with parking a huge issue for consumers wanting to buy cheap goods in bulk in the way they’re able to at retail parks.

“Although town and city centres do bring other advantages, not least footfall which has been increasing as shoppers realise they enjoy the experience of a day “in town” and a chance to try before they buy.

“But businesses need to give those shoppers a reason to stop in and, for many shoppers, Wilko just hasn’t been on their radar.”

Julian Skelly, managing partner for retail at consultancy Publicis Sapient, said: “Wilko’s challenge is that it hasn’t managed to keep up with changing customer expectations and behaviours.  Their low-cost, discount model relies on heavy footfall in their relatively large-format high-street stores.

“The pandemic accelerated retail customers’ transition to online and away from the high-street. Initially, the impact of this on Wilko was masked by the government’s Covid support but Wilko was significantly exposed when customers didn’t return to their stores in the same way post-Covid.”

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