A rescue deal to save the majority of Wilko’s stores has been put at risk as some key suppliers want outstanding debts repaid upfront to guarantee continuing to provide products to the chain.
Doug Putman, who engineered a turnaround of HMV in the UK and owns Toys R Us in Canada, has been negotiating a deal to save as many as 300 of Wilko’s 400 stores, throwing a lifeline to its more than 12,000 staff.
However, talks over the weekend – which were hoped to result in deal that could have been announced as soon as Monday – are understood to have run into problems.
Some big suppliers, including Unilever and Procter & Gamble, which supply many staple household cleaning and food products, have said they want their debts repaid now in order to continue to guarantee supplying Wilko’s stores.
The talks over the weekend also raised concerns that some suppliers, who have cancelled shipments to Wilko’s stores as the chain went into administration last month, would not be able to ship products for another six weeks.
The issues with large suppliers, which were first reported by the Sun, has slowed the rescue talks but sources said a deal could still be struck this week.
Administrators at PwC are also still in talks with other potential suitors, including B&M Bargains, Poundland, Home Bargains and the Range about taking on some of Wilko’s stores.
Putman’s proposal would save the majority of Wilko’s jobs and stores, although cuts are already being made at the company’s headquarters and at its warehouses this week.
On Monday, 269 people in the company’s Worksop support centre had their last day with the business.
As the administrator, PwC has an obligation to try to protect the interests of creditors including Hilco, which is owed £40m.
The retailer, which was founded in 1930 when JK Wilkinson opened his first store in Leicester, stepped into stores left empty when Woolworths collapsed in 2008.
The Wilkinson family, which still controlled the group until administrators were called in on 10 August, paid themselves £3m in dividends in the 12 months to the end of February 2022 despite falling to a loss that year.
Unilever declined to comment. P&G has been contacted for comment.
