In the midst of ongoing efforts to salvage the retail chain Wilko, a new rescue plan for the company has been proposed.
M2 Capital, a private equity group, has announced that it has placed a bid for the company in the amount of £90 million and has promised to maintain all of the employees’ jobs for a period of two years.
The offer made by M2, which was first reported on by the Guardian, is one of several that the administrators are currently considering.
In the beginning of this month, Wilko went into administration, which put the security of 12,500 workers and 400 outlets in jeopardy.
The administrators of Wilko, PwC, have reportedly set a deadline for bids on the chain for this past Friday, and it is believed that they will be examining offers over the course of the weekend.
Robert Mantse, the managing director of M2, stated to the BBC that the company would “guarantee all employees’ jobs for two years” in the event that the company’s rescue bid was approved.
Andy Prendergast, the national secretary of the GMB union, provided a response to the news by stating that while “the devil is always in the detail,” any offer that guarantees jobs must be prioritized.
It was revealed the week before last that the owner of HMV, a Canadian businessman named Doug Putman, is also considering reviving some of the Wilko company.
If Mr. Putman’s proposal is accepted, it is unclear how many stores would remain open or how many jobs would be preserved.
Administrators will consider all bids made for a company, but they are ultimately bound by law to make decisions that are in the company’s best interest and the interest of its creditors.
Wilko, a well-known retailer that is known for offering everyday things at low prices, has been dealing with significant losses and a paucity of cash.
It has also been criticized for lagging behind competitors such as B&M, Poundland, The Range, and Home deals. This is due to the fact that the high cost of living has encouraged consumers to look for deals.
What exactly is the problem at Wilko?
What does the future hold for Wilko and its 12 500 employees?
As it was coming up against a cash crunch, Wilko had previously taken out a loan for £40 million from a company that specializes in restructuring, reorganized its leadership team, eliminated employees, and sold off a distribution center.
Shoppers had also seen gaps on shelves after Wilko struggled to pay its suppliers and at least one credit insurer withdrew trade cover, which prompted some companies to delay deliveries. These events led to shoppers seeing the gaps on the shelves.
But Lisa Wilkinson, who was the retailer’s chairwoman until January of this year and the granddaughter of the company’s founder, has stated that “everybody has thrown everything” into the effort to salvage the company.
She said these sentiments in an interview with the Sunday Times: “The team members, the suppliers, the landlords… everybody has thrown their soul and heart into it.”
In recent years, the company has come under fire for paying dividends, but according to Ms. Wilkinson, the business would have failed regardless of whether or not it had made these payments.
“Hindsight is a great bedfellow and I like to think we did all the things we should do when we paid dividends,” she told the daily. “I like to think we did all the things we should do when we paid dividends.” “The auditors verified that everything had been properly governed, that there was sufficient cash on hand, that we had profits or profits reserved, and that we had gone through the appropriate processes.”
She went on to say that if the company had not distributed any dividends, “it might have helped us survive for a couple of extra months.” What we have eliminated wouldn’t have made much of a difference, in all honesty.
Andy Prendergast, a representative for the GMB union, however, stated that “12,500 workers are facing redundancy – through no fault of their own.”
He was not pleased with Ms. Wilkinson’s remarks and stated that she had not “addressed her workers and faced their concerns.” In addition to this, he stated that her comments were “in poor taste when workers don’t know how they’re going to make ends meet in a few weeks’ time.”
When JK Wilkinson launched his first store in Leicester in 1930, he established the company that bears his name. It began its expansion across the Midlands, and by the 1990s, it had become one of the most rapidly expanding retail businesses in Britain.
In 2012, Wilkinson started the process of rebranding its stores as Wilko, taking the name of the company’s own-brand products that were sold under the Wilko moniker.