Wilko: Warning warehouse staff face redundancy

Job cuts at Wilko may resume on Thursday if the necessary paperwork from the current bidder was not received on time, the GMB union says.

Private equity firm M2 Capital has made a £90m bid for the business, pledging to retain all jobs for two years.

But the GMB said administrators PwC had told the union that redundancies for warehouse staff could restart "as the bid has yet to pass basic checks".

Wilko fell into administration earlier this month putting 12,500 jobs at risk.

About 400 of its shops across the UK are also at risk of closure, in addition to its head office and two distribution centres.

In a note to its members, the GMB said: "Although further details have been requested from the bidder, we have been informed that if these are not received by 5pm [on Wednesday]… then the redundancies (for distribution and support centre staff) are likely to be restarted tomorrow."

Redundancies had been suspended on Tuesday while rescue bids were considered. It came after the union wrote to Business Secretary Kemi Badenoch, suggesting that bidders had reported "difficulties" engaging with administrators PwC.

M2 managing director Robert Mantse previously told the BBC that if the firm's rescue bid was accepted, M2 would "guarantee all employees' jobs for two years".

Wilko had been struggling with its cash flow and a failure to keep up with competition from other low-cost retailers, such as B&M and Poundland. Analysts said that it had failed to adapt well to customers' needs as soaring prices have pushed shoppers to seek out bargains.

There was also interest in buying Wilko from Canadian businessman Doug Putman, who revived flagging music and games retailer HMV.

The GMB union said on Tuesday that it was concerned by a £40m debt which Wilko owed to Hilco, a restructuring specialist.

The debt could hamper a rescue deal, say industry experts, as administrators are legally obligated to prioritise creditors rather than saving jobs.

Wilko has been criticised for paying millions of pounds in dividends in recent years, despite signs that it was struggling. The retailer's former chairwoman Lisa Wilkinson defended the decision to continue paying them, saying the chain's collapse would have happened regardless.

The GMB union, which represents over 3,000 Wilko workers, is meeting with the administrators again on Thursday.

It said that although interested bidders could save a "significant proportion" of Wilko, it said that "still cannot guarantee" the future of any jobs at risk.

Wilko was founded in Leicester in 1930 when JK Wilkinson opened his first store. It expanded across the Midlands initially and by the 1990s became one of Britain's fastest-growing retailers. It also filled a gap for bargain shoppers after the collapse of chain Woolworths.