Budget retailer B&M snapped up a bargain of its own today, buying 51 of Wilko’s 400 stores for £13million in an eleventh-hour bid to save the ailing high street favourite.

Analysts said that ‘Wilko’s collapse is B&M’s gain’ and that the soon-to-be-empty premises were ‘easy pickings’ for the buyer, who has made no secret of its plans to open more shops.

Wilko, which sells everything from hardware goods to cleaning products, toys and gardening equipment, fell into administration last month, with insolvency experts from PwC trying to hammer out a rescue deal in recent weeks.

The first round of potentially thousands of Wilko layoffs was said to have begun yesterday, as staff at offices and warehouses up and down the country were told of their redundancies.

Hope of a secure future appeared to have been extinguished last week when a bid by the boss of HMV to purchase 300 stores stalled over funding issues, putting some 12,500 jobs at risk.

But B&M’s last-ditch purchase is expected to have saved a substantial number of employees from the axe – though it has not yet been confirmed which of Wilko’s stores will be rescued through the sale. 

Bargain retailer B&M has agreed to buy up to 51 of failing Wilko’s stores from administrators for £13million, after a bid to purchase the entirety of the collapsed high street retailer fell through last week

Wilko, which started out life as a single hardware store in Leicester in 1930, c ollapsed into administration on August 11

Empty shelves at a Wilko store in Wimbledon, south London, last week before B&M stepped in

Susannah Streeter, head of money and markets at financial services giant, Hargreaves Lansdown, said: ‘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. 

‘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. 

‘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.’

It represents a shot in the arm for Britain’s struggling retail industry, which has been decimated by the impact of Covid, soaring inflation and a change in shopping habits. 

Jeremy Whiteson, restructuring and insolvency partner at Fladgate, added: ‘The sale of 51 stores to B&M offers a small glimmer of hope for the Wilko employees at the sites to be acquired.

‘While reports so far have not confirmed the position of employees, if B&M wants to continue to operate a similar business from these sites, it is likely that contracts of employees engaged at those sites will be automatically transferred to the buyer as a matter of law.

‘Unfortunately, the B&M deal is less likely to offer any benefit for employees based at other locations.

‘Although, as other bidders are continuing discussions, it is possible that other sites are yet to be acquired.’

The B&M group runs around 1,150 stores in the UK and France under the B&M and Heron brands.

It is understood that the majority of the new stores are expected to rebrand as B&M.

Shelves were seen completely empty at the Wilko store in upmarket Altrincham, near Manchester

A Wilko store in Maidenhead, Berkshire, advertises its administration sale last week

Shelves were starting to empty in a Wilko Store in Maidenhead, Berkshire, as the news of the business’s collapse was unveiled

PwC remains in further talks regarding Wilko’s remaining stores, brand and other assets.

‘The consideration is fully funded from existing cash reserves and the acquisition is not expected to be conditional on any regulatory clearances’, B&M said in an update to investors.

It said an update on the timing of the new store openings will be provided alongside its half-year financial results on November 9.

A statement from PwC said: ‘The joint administrators of the companies have today entered into an agreement to provide B&M with the option to acquire up to 51 properties, after the administration trading period concludes at those sites.’ 

B&M did not confirm if any staff would be kept on, but hopes to relaunch the sites, under its brand, within weeks, according to Sky News.

Consumer analyst Orwa Mohamad said: ‘B&M’s ambition to get to 950 stores has been given a significant boost by the potential cherry picking of Wilko’s best stores, i.e. the ones that are most profitable. 

‘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 cannibalisation impact. 

‘Quite often, Wilko & B&M sell the same product, meaning consumers have a strong incentive to continue frequenting those stores regardless of the banner.’

Wilko, which started out life as a single hardware store in Leicester in 1930, collapsed into administration on August 11, putting 12,500 jobs at risk, after its business was hit by rising costs and lackluster sales. 

Whether or not the company’s roster of stores would be saved has been a hot topic, with HMV tycoon Doug Putman previously thought to be leading a bid to buy up the discount shops. 

Administrators were in talks with a group of potential rescuers led by Doug Putman, the Canadian businessman who took over HMV in 2019. 

It is understood that Mr Putman is still in talks with administrators over a deal.

His original plans to buy around 300 stores were however impacted by difficulties related to Wilko’s debts to suppliers. 

Wilko had faced five years of declining turnover as high streets were placed under pressure, not least by the Covid-19 lockdowns

Shelves empty in a Wilko Store in Maidenhead, Berkshire, during its administration sale

Some of the Wilko stores set to close include Bournemouth, Woolwich, Merthyr Tydfil and The Fort in Birmingham. 

The GMB union said last week it had asked for redundancies to start with volunteers.

Wilko had faced five years of declining turnover as high streets were placed under pressure, not least by the Covid-19 lockdowns.

The discount retailer’s collapse into administration saw the firm begin to clear the shelves of its physical stores, as it ended all sales from its website. 

Rival retailers Poundland, The Range and Home Bargains were all reportedly among the firms interested in buying out parts of Wilko’s business. 

Talks to save the entirety of Wilko’s business subsequently collapsed with GMB warning on August 23 that the firm was set to start laying off the following week.

Hopes for Wilko’s future were, however, revived on August 25, after HMV owner Doug Putman submitted a new bid to save 350 of Wilko’s 400 stores and save 10,000 jobs in the process. 

Then just days later, on August 27, Anglo-Canadian private equity fund M2 Capital placed a £90million last-minute bid to save all 400.

M2 Capital is a private equity firm with offices in Mayfair, which owns luxury hotel chain Como. 

Wilko founded in 1930 as a hardware shop in Leicester by James Kemsey Wilkinson, and was known as Wilkinson before becoming ‘Wilko’ in the early 2010s – grew to rule the British high street as the leading discount store.

A shopper walks down an empty aisle with bare shelves at a Wilko store in Wimbledon

Wilko is one of a number of high street names which has struggled since the Covid pandemic

Over the years the family-owned firm expanded its range to include DIY products, gardening wares and general home goods. But it has faced fierce competition from cut-price competitors and online rivals like Amazon.

It struggled in the face of lockdowns to emerge from the pandemic only to be battered by rampant inflation.

After Lisa Wilkinson, the founder’s granddaughter, stood down as chairwoman in January this year – warning that the business could run out of cash – the retailer scrambled to prop up the business with a new chair and £40 of borrowed cash from the creditor Hilco.

Hilco has previously owned HMV before it went bust and was also involved in the closure of high-street department store, Debenhams

Ms Wilkinson was replaced by Chris Howell, the former chairman of Bensons for Beds.

The collapse of Wilko marks another dark day for the High Street following the near-disappearance of newsagent McColl’s last year before its rescue by Morrisons.

In recent years, Britain’s high streets have lost popular names such as Debenhams, Topshop owner Arcadia group and Mothercare.