Wilko, a UK Household Goods Company, Set to Cut Over 10,000 Additional Jobs

12 Sep, 2023

Wilko, a UK Household Goods Company, Set to Cut Over 10,000 Additional Jobs

More than 10,000 employees are facing job losses at the struggling UK household goods retailer, Wilko. Administrators announced this unfortunate development on Monday, revealing that last-ditch efforts to secure a rescue deal with the owner of the HMV music store chain, Canadian businessman Doug Putman, had collapsed.

Doug Putman had been in negotiations with administrators PricewaterhouseCoopers (PwC) to acquire approximately 200 Wilko stores after the company went into administration in August. Despite having support from Wilko management, staff, and PwC, both parties, Putman and PwC, jointly announced the end of the rescue discussions, leading to the potential loss of jobs for up to 10,196 additional employees.

PwC had already disclosed earlier that over 1,600 staff members would be made redundant. In a statement on Monday, PwC expressed its efforts to explore all possible options to save the business but stated that it was now evident that no substantial part of Wilko's operations could be saved as a going concern. Consequently, the joint administrators conveyed the regrettable news to all staff that the closure of all Wilko stores, two distribution centers, and the majority of support center activities would commence.

According to the statement, all stores are set to close by early October, resulting in 9,100 store employee redundancies. Distribution center operations are expected to cease by the end of the week, with a significant portion of its remaining 886 employees being laid off. Additional layoffs affecting 210 remaining support center staff are expected before early October as the operations wind down.

B&M European Value Retail has agreed to a £13 million ($16.3 million) deal to purchase 51 Wilko stores, but the impact on jobs in those operations remains unclear. These stores will also be closed temporarily and reopened under the B&M branding, according to the administrators.

Wilko, which operated approximately 400 stores across the UK and maintained an online presence, announced its collapse on August 10, putting 12,500 jobs at risk. The company cited persistently high inflation and interest rates as factors affecting both businesses and consumers.

Hopes were pinned on a last-minute deal with Doug Putman, but he confirmed separately on Monday that this would not materialize. He expressed disappointment that a stable foundation could not be secured to ensure the long-term success of the business and its employees.

While administrators had discussions with low-cost retailers Poundland and Home Bargains regarding a potential partial rescue deal, those talks also ended without success.

In the latest update, PwC revealed that staff at 124 stores were informed on Monday that these outlets would close on or before September 21, with details about the closure timing of the remaining 222 stores to be announced in the future.

The GMB union's general secretary, Gary Smith, expressed concern about the significant impact on thousands of families across the UK. The union had earlier criticized the company, suggesting it had been mismanaged, and its staff were now suffering the consequences.

Keir Starmer, leader of the UK's opposition Labour party, also weighed in on the situation, describing it as devastating for staff and their families and attributing it to the policies of the Conservative party, which has been in power in Britain for the last 13 years.