B&M has agreed with administrators to acquire up to 51 of 400 Wilko stores from the retail firm for the maximum aggregate consideration of £13m.

The retail firm has said the consideration is fully funded from existing cash reserves and the acquisition is not expected to be conditional on any regulatory clearances.

However, B&M has not revealed which stores it has bought or how many jobs could be saved as a result of the purchase. The money raised will help to recover funds for Wilko’s creditors.

Wilko entered administration in August, despite having an annual turnover of £1.2bn. The firm has struggled with a cash shortage and sharp losses, leading it to borrow £40m from restricting specialist, Hilco.

The retail chain, which is currently under the leadership of administrators PwC, cut jobs, changed its leadership team and sold a distribution centre.

Further redundancies were made this week, with over 1,300 jobs being cut and 52 stores are set to close. This follows on from 269 jobs being lost at Wilko’s support centre in Worksop, as well as 14 others at a subsidiary firm.

Head of money and markets at Hargreaves Lansdown, Susannah Streeter, commented: ‘’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.”

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