B&M swoops in to buy Wilko stores while other main rescue bid looks uncertain
- B&M European Value Retail will take on 51 shops out of 400 in the chain in a deal worth around £13 million.
- Reports suggest a deal from the owner of HMV UK to buy up to 300 shops has run into difficulties over demands from suppliers.
- B&M share price has fallen back as concerns swirl about wider retail sector, but has regained some ground.
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘’Wilko’s collapse is B&M’s gain, given that the successful value retailer had made no secret of wanting to open more shops across the UK. The soon-to-be vacant premises were easy picking for B&M and it is likely that the retailer has been ultra-choosy when it comes to cherry picking locations. Part of B&M’s successful model is its significant footprint in easy to access retail parks, so stores where it’s easy to load up a car are likely to be in high numbers in the deal. It’s unclear at this stage how many jobs might be saved by B&Ms move. A good chunk of positions should be salvaged, but B&M is likely to want to run a highly efficient ship, to squeeze as much profit out of the floorspace. The deal hasn’t set the stock alight, instead it’s still languishing in the red, after an earlier downgrade of the company alongside with Tesco and Sainsbury’s by JP Morgan. However, it has regained some ground since the news of the deal broke, with some investors hoping it could be a spur to sale growth, especially given how focused consumers are on seeking out value right now.
Hopes for a larger white knight rescue of the Wilko chain have been clouded in a dust of uncertainty. A bid from Doug Putman the Canadian businessman and owner of HMV UK is understood to have financing but administrators are dealing with demands from suppliers to be paid, before a deal can be reached. At the most, it looks like a scaled down bid for the chain will be clinched, which would save the famous red and white frontage but Wilko’s presence on the high street would be a pale comparison to its heady days of success.’’
