A union representing thousands of workers at Wilko is seeking an urgent meeting with the business secretary after being told by potential rescuers of “difficulties” in engaging with the administrators who will decide upon the stricken retail chain’s future.
On Monday, the GMB national secretary, Andy Prendergast, wrote to Kemi Badenoch asking her to ensure that PricewaterhouseCoopers considered all bids for the budget retailer where 12,500 jobs were hanging in the balance.
The gardening to beauty retailer, which has 400 stores, called in administrators this month after running short of cash. Its shops are expected to close within weeks, with thousands of job losses unless a buyout can be secured.
The shuttering of Wilko stores will leave more big gaps on UK high streets that have been severely hit by the loss of 6,000 retail outlets in the past five years.
Several parties, who say they will retain the jobs if successful, have emerged as contenders to take over the business. Doug Putman, a Canadian entrepreneur who returned the HMV music and film retail chain to profit, last week submitted a second offer that would mean the stores would continue to operate under the Wilko brand.
M2 Capital, a UK-Canadian private equity firm that owns a string of upmarket hotels around the world under the COMO brand, also put forward a bid on Friday. At least one other potential bidder from the UK is considering making an offer, although no formal bid has been entered, the Guardian understands.
Any new bid would face a race against time if it is to preserve workers’ jobs. PwC said on Wednesday it was probable that the majority of Wilko’s stores would close and there would be redundancies, adding that it had not found a buyer for the whole group. A decision on the first closures and redundancies is thought to be imminent, and could come as soon as this week, although Wilko stores are continuing to trade.
However, in the letter to Badenoch seen by the Guardian, Prendergast said: “We are concerned that prior to our involvement, several of these bidders have reported difficulties engaging the appointed administrators.” Several bidders “appear to have the necessary funding and the willingness to invest and safeguard our members’ job”, he added.
The GMB also raised concerns over the role of Hilco Capital, a private equity firm that lent Wilko about £40m this year. A Hilco subsidiary holds the rights to income from the sale of the Wilko brand. Barclays Bank also holds a charge over several plots of land owned by the retailer.
As administrator, PwC has an obligation to try to protect the interests of creditors including Hilco. The GMB said it was concerned about the influence of Hilco and that the private equity firm’s interests did not necessarily align with retaining workers’ jobs. Hilco was approached for comment.
A PwC spokesperson said: “Since our appointment as administrators of Wilko we have worked relentlessly to secure a sale of the business, and talks are continuing with a number of parties. As administrators, we’re intent on achieving the best outcome for everyone involved while preserving as many jobs as possible and adhering to our statutory duty to act in the best interests of the creditors as a whole.
“It would be inappropriate to comment on individual bidders or interested parties at this stage in the process,” they added.
The GMB argues that no redundancies should take place at Wilko if meaningful offers have been tabled that will protect jobs. The business secretary would not have powers to intervene directly in the administration, but could put pressure on parties to try to save jobs.
A government spokesperson said: “While this is a commercial decision for the company, we understand that this will be a concerning time for workers at Wilko.
“We have backed businesses all of sizes with an unprecedented package of support including recent fuel duty and VAT cuts, business rates holidays and government backed loans worth around £400bn. We will continue to stand firmly behind them.”
The union said it was seeking assurances from the government that all bids would be considered, and that where possible all steps would be taken to “protect jobs as part of this process”. Prendergast argued that the bids could save the government millions of pounds in redundancy costs and notice pay that would be required if Wilko enters liquidation.
