Wilko shoppers have shared their shock at the news the homeware and garden chain plans to appoint administrators, putting 12,000 jobs at risk.
The retailer’s boss said yesterday it is expected to enter insolvency, having failed to secure a takeover to help the business with “mounting cash pressures”.
Retail expert Nick Drewe said the uncertain future of Wilko is “unfortunately, another example of the many retailers falling victim to the ongoing cost of living crisis and economic uncertainty”.
He added: “Consumers facing the repercussions of rising interest rates, energy prices and a lack of salary increases, means that the pressure to secure the very best prices and deals on everyday products is now greater than ever.”
Wilko has more than 400 stores
PA
Mr Drewe, the founder of online discount platform Wethrift, said many turned to Wilko following the collapse of Woolworths in 2009, with it “arguably becoming a staple of the British high street over the past two decades”.
However, despite historically offering competitive prizes, chains such as B&M, Home Bargains and The Range seem to have overtaken the retailer in terms of popularity and availability of stock, becoming "the ‘go-to’ stores for bargain hunters”.
He added: “Many are speculating that, due to its reliance on in-person purchases and high street footfall, Wilko failed to recover from the devastating impact that the COVID pandemic had on retailers during lockdown.
“British consumers began pivoting the way they shopped for essential items, preferring instead to rely on online shopping rather than risking in-store visits.”
Managing director of insolvency experts Forbes Burton, Rick Smith, said: “Yesterday’s news whilst sad is not entirely unexpected, they have been struggling for a while now and the mishandling of the economy by the government combined with other factors such as consumers moving away from the high street means that retailers like this are going to struggle.”
One customer told GB News yesterday she had thought it was “so empty compared to what it used to be” while walking around the store.
She said: “It’s handy, but these last few times I’ve been there, I’ve thought, ‘It’s very empty in there’.”
Meanwhile, another shopper told GB News: “It seems like the shop’s always got people in it. And they do really good uni deals normally.”
Wilko CEO Mark Jackson said yesterday: “While we can confirm we’ve had a significant level of interest, including indicative offers that we believe would meet all our financial criteria to recapitalise the business, at present, we don’t today have an offer that provides the necessary liquidity in the time we have available, given the mounting cash pressures we’re faced with.
“Unfortunately, with this in mind, today we’re having to take the difficult decision to file an NOI.
“We’ll continue to progress discussions with interested parties with the aim of completing a transaction which preserves the business and will encourage those interested parties we’re in discussions with to move as fast as possible.
“We continue to believe that our robust turnaround plan, with significant re-stabilisation cost savings in progress, will deliver a profitable Wilko and maximise the significant opportunities that we know exist.
“We’re a £1.2billion turnover business with strong presence on UK high streets through our 400 stores, online at wilko.com and through our great value Wilko own brand products, serving local communities with their everyday household and garden needs for over 90 years.
“That said, while we’ll continue to progress these indicative offers, without the surety of a recapitalisation being able to be completed within the necessary time frame and given the cash position, we’ve been left with no choice but to take this action.”
LATEST DEVELOPMENTS
A Wilko spokesperson said there are no immediate stores closures planned as a result of the announcement
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A Wilko spokesperson told GB News there are no immediate store closures planned as a result of yesterday’s announcement and the business “continues to trade as usual during this period”.
The homeware and hardware chain is well-known for its affordable items, from pick ‘n’ mix and cleaning essentials to garden furniture.
Wilko has faced more competition over the last decade, having to share its traditional customer base with stores such as Poundland, Home Bargains, The Range and B&M.
Writing on Twitter, one Wilko shopper said: “I have noticed that they have reduced their own brand products and I will have to start going to @Poundstretcher1’s bargain buys for cheaper laundry products.”
Another wrote: “Always empty when I go in was a good store at first but the prices are way too high now.”(sic)
A third remarked: “Pretty much all city centre locations, with expensive or limited parking. If @LoveWilko had relocated to out of town centres (with parking) it probably would have survived.
However, the town centre location was welcomed by another Twitter user, who commented: “Not everyone can drive to retail parks. We are an aging population & soon it will be Pay Per Mile. We need Wilkos. It has everything, I hope it is saved.”(sic)
Wilko hired advisers from PwC earlier this year in a bid to find a buyer so it could secure fresh funding to keep the firm trading.
The retailer agreed a deal to borrow £40million from restructuring specialist Hilco last year after posting significant losses.
