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

Image source, Getty Images

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 to buy up to 300 shops has stalled over funding issues.

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, The Range 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.

But it is understood that there was a need to get some money in the bank for Wilko's creditors as administrators at PwC oversee the running of the business with dwindling stock.

Retail analyst Catherine Shuttleworth said the deal would also allow B&M to attract more customers.

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

Several retailers and investors have reportedly been in talks with PwC about potentially buying Wilko's shops or online brand in what has been dubbed "Project Falcon".

Canadian billionaire Doug Putman is 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 did result 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 on the table, it is understood, but the businessman is apparently struggling to nail down final funding for the deal.

If he fails Wilko could suffer the same fate as Woolworths, which saw many of its stores snapped up by rivals after its collapse in 2008.