Wilko: HMV owner Doug Putman moves closer to rescue deal

Doug Putman helped bring HMV back from the brink

The owner of HMV is edging closer to a deal to buy collapsed discounter Wilko, saving thousands of jobs and the majority of shops, the BBC understands.

Doug Putman plans to keep up to 300 of the current 400 Wilko shops open if he succeeds in buying the chain.

If the deal goes ahead, it would mean thousands of the current 12,500 jobs at risk could be saved.

The development comes after a bid from private equity firm M2 Capital to buy the business fell through.

The discount chain, a stalwart of the High Street, fell into administration in August putting 12,500 jobs at risk across 400 shops.

It is understood that any rescue deal would not save the chain's two distribution centres in Worksop and Newport or its head office.

There is no guarantee this last ditch revised bid will succeed. But a source familiar with the situation says the offer is credible enough for major creditors to be consulted.

Administrators at PwC said on Thursday that 269 jobs at the chain's support centre in Worksop and 14 others from a subsidiary firm of Wilko would be cut at the close of business on Monday 4 September.

• What has gone wrong at Wilko?

PwC said all of the chain's stores are currently trading and remain open, while "discussions continue with those interested in buying parts of the business".

Sky News first reported Mr Putman was close to securing a deal.

Who is Doug Putman?

Mr Putman is 39-year-old Canadian billionaire who has something of a reputation for rescuing faltering well-known companies.

In 2019, his company Sunrise Records bought the collapsed music chain HMV and saved some 1,500 jobs and about 100 stores.

The takeover did result in redundancies and shop closures, including the company's flagship Oxford Street store in London - but following a major turnaround, plans are afoot to reopen it later this year.

In recent years, amid falling demand for DVDs and CDs, HMV has broadened its focus to encompass merchandise, music technology, more live music and in-store signings.

Could he also turn around Wilko in a similar way? The discount chain has faced stiff competition in recent years from the likes of The Range, Home Bargains and B&M.

Some analysts think a slimmed down Wilko has a small chance of survival, but if Mr Putman's deal fails Wilko could suffer the same fate as Woolworths, which saw its stores snapped up by rivals.

The businessman's family also run Everest Toys, one of the largest toy wholesalers in North America.

The GMB union, which represents about 4,000 Wilko staff, said it remained hopeful for a bid from a viable buyer to save the jobs of employees in stores and online, but warned "we cannot in any way guarantee this and must therefore continue to prepare for the worst".

The union said the majority of people working in Wilko's commercial trading team, IT, finance, legal and Human Resources would be made redundant on Monday.

It said it had requested redundancies at distribution centres to "begin with volunteers" and that it was speaking to Bassetlaw District Council, the Welsh Assembly, and other organisations to try to "save the sites".

"It should be stressed that at this point, we do not have high hopes of doing so but we will not stop working on this and hope that even if we are unable to do so prior to closures, we will actively look to keep members' details in the hope of being able to staff up quickly if we find buyers or new tenants for the sites," a GMB statement said.

Shoppers in Birkenhead, Merseyside told the BBC that they would miss their Wilko store if it were to close.

"It's just really sad because everyone relies on it because you can get absolutely anything in here, especially DIY things - screws and things that my husband is always running out of," one shopper said.

"I think it's a big part of the community, it'll be a sad loss [if] it closes. The staff are just worried, they don't know whether to look for jobs or not," she added.

Wilko stepped into the gap on the High Street left by the collapse of Woolworths in late 2008, but has struggled over the past decade partly due to growing competition from the likes of Poundland and B&M.

Many of Wilko's stores are also on High Streets in traditional town centres, which became an expensive liability as customers shifted to bigger retail parks and out-of-town locations.

The company, which was founded in Leicester in 1930, was family-run until its collapse this month and is well-known for its affordable everyday items.

Job cuts at the chain were suspended in recent days as PwC considered M2 Capital's bid for the entire business, which was submitted last week.

M2 Capital said it made a £90m bid for Wilko and claimed at the weekend that it would retain all employees' roles for two years.

However, it is believed that the private equity firm was unable to provide proof of funding for its bid to administrators prior to a deadline on Wednesday.

During a conversation littered with expletives, M2 Capital chairman Robert Mantse told the BBC that his dealings with the administrators had been a "circus" and accused PwC of being "beyond unfair".

He said M2 is now considering legal action. Asked what his next steps would be, Mr Mantse replied he was "going to lunch with a very pretty girl".

Wilko's rivals such as B&M and Poundland are also understood to be interested in buying up parcels of stores.

Those retailers, along with Home Bargains, have created strong competition for Wilko in recent years as the high cost of living has pushed shoppers to seek out bargains.

All the companies have so far declined to comment.

Meanwhile, staff who are looking to leave Wilko will be "fast-tracked" for a job at Dunelm, the home retailing chain said. Dunelm said it would guarantee "all those who apply an opportunity to have an interview".