The GMB union said it meant it was now "likely" that all of Wilko's staff would now be made redundant, Business Editor Joel Hills reports
All 400 branches of collapsed retailer Wilko will close by early October with the "likely" loss of all 12,500 jobs at the chain, according to the GMB.
The union said it was informed of the development by administrators PwC on Monday morning.
The GMB said it meant it was now "likely" that all of Wilko's staff would now be made redundant.
It comes as HMV owner Doug Putman pulled out of a rescue deal for the high street chain, throwing into doubt the future prospects of thousands of jobs.
The billionaire was understood to be in discussions with PwC, the administrator appointed to oversee the high street chain's insolvency, to save around 200 Wilko shops.
But in a statement Mr Putman said the deal was now dead as a "stable foundation could not be secured to ensure long-term success for the business and its people in the way that we would have wanted".
"It is with great disappointment that we can no longer continue in the purchase process for Wilko having worked with administrators and suppliers over several weeks to seek a viable way to rescue it as a going concern," he said.
"We had financing in place and received the full support of PwC, Wilko management and staff representatives, which we are deeply thankful for considering what a challenging time it has been for them."
Wilko entered administration in August, having faced five years of declining turnover as high streets were placed under pressure, not least by the Covid-19 lockdowns.
The company was founded in Leicester with the first shop opening in 1930, and since then has grown to more than 400 stores across the country.
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