The future of the majority of Wilko stores hangs in the balance, with thousands of jobs at risk as no savior emerges to rescue the struggling retailer. The family-owned household and garden products retailer, boasting approximately 400 stores and employing nearly 12,500 people, faces an uncertain fate after talks with potential buyers fell through, leading to its administration.
PricewaterhouseCoopers, appointed as administrators earlier this month when Wilko faced financial challenges, has stated that there is a high likelihood of redundancies and store closures in the coming period due to the inability to secure a buyer for the entire company. However, the stores will continue operating for the time being as discussions persist with parties interested in acquiring portions of the business.
The joint administrators, Jane Steer, Zelf Hussain, and Edward Williams, expressed their awareness of the anxiety this situation causes for employees and pledged support in collaboration with government agencies, unions, and large employers to facilitate a swift return to work for affected staff should redundancies occur.
Andy Prendergast, the national secretary of the GMB union, anticipates that most Wilko stores will close in the near future. The GMB union will advocate for employee rights during this process and demand that Wilko’s management be held accountable.
It is expected that rival bargain retailers like Poundland, Home Bargains, Primark, and B&M will acquire Wilko’s stores, while landlords in certain locations may divide the retail space among multiple tenants. Reports suggest that Poundland could potentially take over as many as 100 Wilko stores.
Hilco, the restructuring firm that owns Homebase, holds a significant portion of Wilko’s debt, which is secured against proceeds from the sale of the Wilko brand.
Founded in 1930, Wilko filled the void left by the closure of Woolworths in late 2008. Despite incurring losses in the previous year, the family behind Wilko paid themselves £3 million in dividends in the fiscal year ending February 2022.
Experts attribute Wilko’s challenges to its failure to adapt to a highly competitive landscape, where retailers like Poundland, Home Bargains, B&M, and Savers thrived by operating more efficiently and undercutting prices. Last year, Wilko borrowed £40 million from Hilco, underwent job cuts, revamped its leadership team, and sold a distribution center to raise funds in response to financial strain. As a result, some suppliers paused or reduced deliveries, leading to empty shelves as the company struggled to meet its financial obligations, with at least one credit insurer withdrawing trade coverage.