B&M has bought 51 Wilko stores for £13m as it seeks to cash in on the collapse of the high-street discounter and expand its retail empire
B&M said on Tuesday it had secured a deal to buy the tranche of Wilko stores after a last-minute bid by a private equity firm to rescue the business collapsed.
It comes as B&M, which is headquartered in Liverpool and currently operates around 650 sites, looks to ramp up its presence across the country.
The company said in June it had set a target to open at least 300 more stores to take the total number of its sites to 950.
Orwa Mohamad, an analyst at Third Bridge, said: “B&M’s ambition to get to 950 has been given a significant boost.
“B&M’s general focus on out-of-town locations means it can incorporate many of Wilko’s high-street stores and locations with limited cannibalisation impact.”
He added: “From an assortment perspective, there’s a high degree of crossover between Wilko and B&M in households, garden, toys, accessories. Quite often, Wilko and B&M sell the same product, meaning consumers have a strong incentive to continue frequenting those stores regardless of the banner.”
Redundancies at Wilko’s offices and warehouses have already begun this week. A potential deal to rescue the entire business by a private equity firm M2 Capital collapsed last week after the company did not provide administrators at PwC with sufficient proof of funding.
M2’s chairman, Robert Mantse, has said he plans to commence legal action against PwC, accusing the company of not running a “fair and transparent” process – a claim PwC has strongly denied.
Meanwhile Doug Putman, the Canadian businessman who bought HMV out of administration in 2019, has put in a bid to acquire at least 200 of Wilko’s stores, it is understood. However he has reportedly run into issues with companies that supplied products to Wilko before it collapsed in August.
According to a report in The Sun last week, big suppliers such as Unilever and Procter & Gamble want their debts paid before they commit to supplying Wilko’s stores. The Telegraph attempted to reach Mr Putman for comment.
Sky News said Mr Putman was in talks with PwC about a slimmed-down deal but that there was no certainty an agreement would be reached.
Wilko employed around 12,500 people across around 400 stores when it called in the administrators on August 10.
Announcing job cuts, Jane Steer, joint administrator at PwC, said last week: “It’s with great sadness that we announce these redundancies.
“We’re incredibly grateful to these team members for the support and dedication they’ve shown to the company, particularly over the last few very difficult weeks.”
Wilko was forced to call in the administrators after repeated attempts to find a buyer for the business fell through.
It had struggled to recover from supply issues during the pandemic which left it scrambling to secure enough stock and overexposure to Britain’s ailing high streets.
As well as B&M, fellow discounters Poundland, The Range and Home Bargains have also expressed interest in purchasing part of Wilko’s estate, with The Range reported to have offered to buy Wilko’s brand and online operations.