B&M buys up to 51 stores from collapsed rival Wilko

Discount chain B&M has agreed to buy dozens of shops from the collapsed retailer Wilko, as talks over a bigger rescue deal hang in the balance.

B&M said it will take on up to 51 of Wilko's 400 stores in a deal worth £13m.

Wilko fell into administration in August as it struggled with sharp losses and a cash shortage.

It is understood that a deal tabled by HMV's owner has stalled over issues with suppliers and funding.

Wilko was founded in 1930 and by the 1990s became one of Britain's fastest-growing retailers.

But the discount chain has faced strong competition from rivals including B&M, Poundland and Home Bargains, as the high cost of living has pushed shoppers to seek out bargains.

Wilko's stores remain open for now as it seeks a buyer for a bigger chunk of the estate, but more than 12,500 jobs were put at risk by the collapse.

The first redundancies - 269 jobs at Wilko's support centre in Worksop and 14 others at a subsidiary firm - started on Monday.

B&M has not confirmed which Wilko shops it has bought, or how many posts could be saved as a result of the deal.

• What's gone wrong at Wilko?

The money raised by the sale will help recover funds for Wilko's creditors, as administrators PwC oversee the running of the business with all of its associated costs such as employee wages.

Retail expert Catherine Shuttleworth said the deal would also allow B&M to attract more customers. The chain has stepped up its expansion plans in the wake of the pandemic, opening 21 new stores in the last financial year.

"This may also create local jobs for Wilko colleagues in the newly-owned stores," Ms Shuttleworth said.

B&M - which was originally called Billington & Mayman after its founders Malcolm Billington and Brian Mayman - opened its first store in Blackpool in 1978, before expanding throughout the UK.

It took on a number of shops from the likes of Woolworths and is now registered in Luxembourg, with shops in France.

Several other retailers and investors have reportedly been in talks with PwC about potentially buying Wilko's shops or online brand.

At the end of last week, Canadian billionaire Doug Putman was thought to be edging closer to a deal to buy up to 300 shops. In 2019, his company Sunrise Records bought the collapsed music chain HMV and saved some 1,500 jobs and about 100 stores.

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

Mr Putman's plan to buy Wilko is still "live", a source familiar with the situation told the BBC, but the businessman is apparently struggling to nail down final funding for the deal.

'Best shot'

The source said it was a complicated deal to stitch together, including sorting out terms with all-important suppliers to fill the shelves.

They said everything possible was being done to give Mr Putman's bid its "best shot" and that discussions could continue for another few weeks.

If Mr Putman's bid fails Wilko will likely go into what is called liquidation, with rival retailers picking up parcels of stores.

Bill Grimsey, former boss of Wickes and Iceland, told the BBC's Wake Up to Money programme that he felt a sense of "déjà vu" when looking at Wilko's performance in recent years.

"It's Woolworths all over again," he said, likening it to the once popular High Street chain that went bust in 2008.

"It's seen a loss of identity, it's got too many stores in the wrong place and competitors are racing ahead… They've been caught napping for the last 10 years."

Many Wilko shops are in High Street locations in traditional town centres. While these locations are convenient for shoppers without cars, since the pandemic there has been a shift to bigger retail parks and out-of-town options with more space, benefiting Wilko rivals like B&M and Poundland.