HMV owner Putman edges closer to rescue deal for bulk of Wilko
The owner of HMV is finalising a deal to rescue the majority of Wilko’s operations, salvaging more than 8,000 jobs at the stricken high street retailer.
Sky News has learnt that Wilko’s administrators, PricewaterhouseCoopers (PwC), began consulting the chain’s major creditors on Thursday on the terms of an agreement with Doug Putman.
One source with financial exposure to Wilko said Mr Putman intended to acquire more than 300 of its 400 stores, meaning that between 8,000 and 9,000 jobs of a total workforce of 12,500 could be saved.
Depending upon further deals with other retailers to buy some of Wilko’s stores, however, that could mean several thousand high street workers face losing their jobs.
A deal with Mr Putman could be announced in the next few days, although people close to the situation cautioned that some uncertainty remained until it was agreed.
The final store and job perimeters involved in the deal are also yet to be formalised, according to one creditor.
“It’s still in the balance but it is beginning to look more positive that a deal can get done,” the creditor said.
On Thursday, PwC confirmed the first redundancies since its appointment when it announced that 283 jobs would be lost, mainly at its support centre operations.
“We will continue to do all that we can to support staff through this period of difficult upheaval, and to maximise their opportunities for a rapid return to work,” Jane Steer, joint administrator, said.
“Our priority is to ensure that all team members affected by redundancy are assisted in processing their claims with immediate effect.”
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What happened to Wilko?
Details of Mr Putman’s deal structure were unclear on Thursday, although he has approached financiers including Gordon Brothers, the specialist retail investor, about backing a deal, Sky News revealed last weekend.
PwC has been seeking external investment for Wilko for months – a search which acquired greater urgency three weeks ago when the accountancy firm was formally appointed as administrator.
Poundland’s parent and B&M European Value Retail have been eyeing the purchase of 150 shops between them, although those deals would not take place if Mr Putman succeeds in buying the bulk of its outlets.
The Range, another value retailer, has made an offer to buy Wilko’s brand and online operations.
A further bidder for Wilko, M2 Capital, reportedly tabled an offer for the whole group but on Thursday the GMB union said it had been informed by PwC “the one bid for the entire business has fallen through as the bidders have failed to provide the necessary evidence to show that they had the finances necessary to purchase the company despite being given numerous opportunities to do so”.
PwC said: “Since their appointment, the administrators have been working closely with Wilko, its employees and suppliers and have considered multiple varied bids and expressions of interest related to the group.
“While discussions continue with those interested in buying parts of the business, it is now clear that no viable offer structure put forward includes the group in its entirety.”
The union added in a message to members: “For staff in stores and online, PWC are continuing to assess bids and we remain hopeful that there is one from a viable buyer on the table.
“However, at this stage we cannot in any way guarantee this and must therefore continue to prepare for the worst.”
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Wilko was established by the Wilkinson family in 1930, and sells homewares and garden furniture at discounted prices.
Shortly before it crashed into administration, Sky News revealed that Gordon Brothers, Alteri Investors and Opcapita were examining last-ditch proposals to invest in the business.
Like many high street retailers, it has been hit by inflationary pressures and supply chain challenges.
In recent months, it had been seeking to finalise a company voluntary arrangement (CVA) – a mechanism that would have triggered steep rent cuts at hundreds of stores but avoided any closures.
Mr Putman could not be reached for comment, while PwC has been contacted for comment.
Foreign state investors would be allowed to hold stakes of up to 15% in British national newspapers, ministers are set to announce amid a two-year battle to resolve an impasse over The Daily Telegraph’s ownership.
Sky News has learnt that the Department for Culture, Media and Sport could announce as soon as Thursday that the new limit is to be imposed following a consultation lasting several months.
The decision to set the ownership threshold at 15% follows an intensive lobbying campaign by newspaper industry executives concerned that a permanent outright ban could cut off a vital source of funding to an already-embattled industry.
It would mean that RedBird IMI, the Abu Dhabi state-backed fund which owns an option to take full ownership of the Telegraph titles, would be able to play a role in the newspapers’ future.
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RedBird Capital, the US-based fund, has already said it is exploring the possibility of taking full control of the Telegraph, while IMI would have – if the status quo had been maintained – forced to relinquish any involvement in the right-leaning broadsheets.
One industry source said they had been told to expect a statement from Lisa Nandy, the culture secretary, or another DCMS minister, this week, with the amendment potentially being made in the form of a statutory instrument.
Other than RedBird, a number of suitors for the Telegraph have expressed interest but struggled to raise the funding for a deal.
The most notable of these has been Dovid Efune, owner of The New York Sun, who has been trying for months to raise the £550m sought by RedBird IMI to recoup its outlay.
Another potential offer from Todd Boehly, the Chelsea Football Club co-owner, and media tycoon David Montgomery, has yet to materialise.
RedBird IMI paid £600m in 2023 to acquire a call option that was intended to convert into ownership of the Telegraph newspapers and The Spectator magazine.
That objective was thwarted by a change in media ownership laws – which banned any form of foreign state ownership – amid an outcry from parliamentarians.
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The Spectator was then sold last year for £100m to Sir Paul Marshall, the hedge fund billionaire, who has installed Lord Gove, the former cabinet minister, as its editor.
The UAE-based IMI, which is controlled by the UAE’s deputy prime minister and ultimate owner of Manchester City Football Club, Sheikh Mansour bin Zayed Al Nahyan, extended a further £600m to the Barclays to pay off a loan owed to Lloyds Banking Group, with the balance secured against other family-controlled assets.
Other bidders for the Telegraph had included Lord Saatchi, the former advertising mogul, who offered £350m, while Lord Rothermere, the Daily Mail proprietor, pulled out of the bidding last summer amid concerns that he would be blocked on competition grounds.
The Telegraph’s ownership had been left in limbo by a decision taken by Lloyds Banking Group, the principal lender to the Barclay family, to force some of the newspapers’ related corporate entities into a form of insolvency proceedings.
The newspaper auction is being run by Raine Group and Robey Warshaw.
The DCMS declined to comment.
Burberry, the UK’s only global luxury brand, is to cut around 1,700 jobs worldwide over the next two years after reporting a steep financial loss.
The company lost £66m in pre-tax profit in the year ended in March as luxury goods sales fell across the world and the company weathered an “uncertain” environment and a “difficult macroeconomic backdrop”.
A year earlier, it recorded £383m in profit.
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It’s suffered in recent years with the share price falling to such an extent the business was removed from the FTSE 100, the index of most valuable companies listed on the London Stock Exchange.
Despite the financial performance, the company was upbeat, with chief executive Joshua Schulman saying “I am more optimistic than ever that Burberry’s best days are ahead and that we will deliver sustainable profitable growth over time”.
What cuts are being made?
The retailer did not specify any shop closures – in the past year, it closed 26 and also opened 26 stores – but did highlight shift cuts and consolidations.
“We don’t have a store closing programme, per see,” Mr Schulman told investors
The night shift at Burberry’s Castleford factory will be cut, it proposed, saying the shift has resulted in overproduction.
“Significant” investment in the facility will be made, however, as the ambition is to scale up British production “over time”, Mr Schulman said.
Changes to the retail network across the world will be made with shop staff being scheduled around “peak traffic”.
Burberry will be “realigning” shop staff, he said, “so that we can offer the best service” at the busiest times.
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There will also be a “simplification” of Burberry’s regional structure and a “rebalancing” of central and regional responsibilities to reduce duplication and “accelerate decision making” through the retail network.
But the majority of changes will be made to “office space teams” around the world, the CEO said.
Commercial and creative teams have already been consolidated, Burberry’s annual results said.
What’s gone wrong?
Aside from the global slowdown in luxury goods sales over recession fears, additional headwinds have come in the form of President Trump’s tariffs.
“Clearly, the external environment has become more challenging since mid-February”, Mr Schulman told investors.
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Trump’s tariffs: What you need to know
Tariff risks were higher than first planned, the annual results said.
It led the US market to be described by Mr Schulman as “choppy” since February when Mr Trump began announcing tariffs on Mexico, Canada and China, as well as on goods such as steel and cars.
Sales also fell in the Asia Pacific region by 16%, the results showed.
Criticism was levelled at the 2021 British government decision to withdraw VAT refunds for overseas visitors, “which has made the UK the least competitive destination in Europe for tourist shopping”, the results read.
“Business in our UK home market continues to be seriously impacted” by the move.
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