Budget retailer B&M European Value Retail SA is set to buy as many as 51 stores from its collapsed UK rival Wilko Ltd. in the first deal since the chain fell into administration last month.
(Bloomberg) — Budget retailer B&M European Value Retail SA is set to buy as many as 51 stores from its collapsed UK rival Wilko Ltd. in the first deal since the chain fell into administration last month.
B&M will pay at most £13 million ($16 million) in cash for the stores and will update shareholders in November on the timing of the openings.
The retailer has been gaining ground in Britain’s budget retail sector, and the acquisition will support its long-term goal of having 950 stores across the country.
B&M has potentially cherry-picked the most profitable of Wilko’s stores, said Orwa Mohamad, an analyst at researcher Third Bridge. That could have an impact on a rescue of the business as a whole.
Doug Putman, the Canadian tycoon who rescued saved British music retailer HMV in 2019, has been planning a much broader rescue deal for Wilko, according to UK media sources including Sky News. His plan would seek to save around 8,000 jobs and potentially 300 of the original 400 stores.
Administrators at PricewaterhouseCoopers LLP are reported to be considering that offer, which would include debt financing from Gordon Brothers Group LLC, a lender to distressed companies.
Wilko collapsed into administration last month after running out of cash amid plummeting footfall. The chain sells everything from stationery to hardware and employed around 12,000 staff. The GMB union blamed management, saying “much needed cash” was taken out of the business.
Wilko secured a £40 million lifeline from Hilco UK — the owner of Homebase — at the beginning of this year, which proved insufficient to secure its long-term operations.
“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 cannibalization impact,” said Mohamad.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.