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City grandees say London at ‘tipping point’ CHRIS DORRELL
ANOTHER ONE BITES THE DUST
WILKO TO CLOSE AFTER HMV ENTREPRENEUR PULLS OUT OF RESCUE DEAL LAURA MCGUIRE THE PROTRACTED battle to save more than 10,000 jobs across Wilko’s high street stores appeared lost last night after a potential white knight pulled out of a rescue deal. The discounter has been teetering on the brink for weeks, with administrators PwC almost brokering a deal with Canadian retail entrepreneur Doug Putman, who pulled off a similar bailout with HMV several years ago.
PwC confirmed last night that redundancies will begin this week, with warehousing staff finishing on Friday and most stores closing in September or October. Zelf Hussain, joint administrator at PwC, said it was still looking for buyers for “different parts” of the business. “Despite the significant and intensive efforts of both ourselves and Putman Investments – the remaining party interested in buying a significant part of the business as a going concern – a
transaction could not be progressed due to the inability to reduce central infrastructure costs quickly enough to make a deal commercially viable,” he said. Poundland, owned by London-listed Pepco, is expected to pick up around 100 stores, whilst other high street chains are also said to be interested in buying the brand. A cocktail of dwindling demand for physical stores and competition in the discount market appeared to mark
Wilko’s card, with savvy shoppers increasingly looking to rivals B&M and Poundland. Questions will now be asked about the family-owned retailer’s finances. It emerged last week that the firm paid out a total of £77m to directors and shareholders in the decade leading up to its collapse. Wilko is the latest household name to head for the retail scrapheap – joining Debenhams, Topshop and Woolworth’s amongst a raft of others.
THE CITY of London is at an “inflection point”, with nearly two thirds of financial services leaders warning that the City’s star will wane without intervention. According to Lloyds Bank’s financial institutions sentiment survey, 64 per cent of sector leaders think that the City will stagnate as a global financial centre compared to rivals. Lisa Francis, managing director, institutional at Lloyds Bank Corporate and Institutional Banking, said: “The City of London’s status as a leading financial centre is at an inflection point.” A moribund IPO market and concerns about a lack of investment – which some link to Brexit – has created something of a crisis of confidence in what is still, by some distance, Europe’s largest financial hub. A raft of reforms to listings, pension fund investment and even the research environment are on the way to give fresh energy to the capital. A spokesperson for UK Finance said the government needed to commit to making the capital as “open” as possible.
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