Wilko stores closing – Wilko administrators have announced the locations of 52 outlets that will close after a complete rescue plan fails. Days before the announcement, Wilko had already started making official layoffs. It’s due to the failure of its sole attempt to rescue the entire business. The layoffs are projected to affect 1,300 Wilko employees. HR, IT, finance, legal, and distribution employees are being laid off the most frequently. Wilko stores closing list have 52 stores which are shutdown.
The British high-street retail business Wilko Limited specializes in selling household items and home furnishings. Wilko’s pick’n’mix sweets, DIY supplies, affordable bathroom items, and practical homewares drew large crowds once. Now, its challenges are nothing new, and its future appears uncertain!
The chain, established in 1930 when JK Wilkinson launched his first location in Leicester, has been experiencing a steady decline. The company’s sales have declined over its last four fiscal years. Wilko has gradually shed hundreds of positions in the previous three years. To save costs, it closed 15 locations last year and changed the organization of its principal office. Let us know more about Wilko’s stores closing in this article.
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Who owns Wilko?
James Kemsey Wilkinson launched Wilko in 1930 in Leicester as Wilkinson Cash Stores. The family continues to own it privately. Tony Wilkinson, the son of Mr. Wilkinson, joined the business in 1960 and held the position of chairman in 1972. Tony was replaced as chairman by Lisa Wilkinson, Lisa’s daughter, and Karin Swann, his niece. Ms. Swann gave Ms. Wilkinson her family’s half of the business in 2014. The director of the company is still Ms. Wilkinson. Before adopting the name Wilko in 2014, the business changed its name to Wilkinson Hardware Stores in 1941.
Wilko’s Evolution and Challenges:
Initially extending its reach throughout the Midlands, Wilko was one of Britain’s retailers. The business had the quickest rate of expansion by the 1990s. After selling its own-brand goods under the Wilko moniker, Wilkinson started rebranding its stores as Wilko in 2012. By 2014, most stores had the new name printed on their storefronts.
Richard Lim, the head of the Retail Economics firm, noted that despite the brand’s popularity with Brits, “sadly, sentiment does not guarantee commercial success.”
Wilko filled the gap left by Woolworths’ collapse in late 2008. but it has suffered over the past ten years, in part. This is because of increased competition from stores like Poundland and B&M.
A decade ago, Wilko beat B&M in sales. But more recently, Wilko’s sales have also lagged behind Poundland, Home Bargains, and The Range. Analysts have noted that competitors are charging less for similar products. According to retail analyst Catherine Shuttleworth, the typical Wilko customer also focuses on price.
As of the most recent count, the discount retailer had 408 outlets in the UK. But many of them are in high-street locations in conventional town centers. The pandemic has caused a move to larger retail parks and out-of-town options with more space. But those places were convenient for customers without cars.
The locations of Wilko stores have turned off some customers. This is according to Charles Allen, a retail analyst at Bloomberg Intelligence. Many of B&M’s outlets have also been relocated to retail parks, which are more convenient for many customers. It is good, particularly for those who are purchasing large items.
According to Richard Lim, Wilko’s focus on the high street didn’t prevent them from competing with rivals. He continued, “Wilko has also found integrating their online and in-store operations difficult. It’s not as seamless as it could be.”
According to Catherine Shuttleworth, efforts to modernize storefronts with self-service tills have failed. Thus, the shopping experience was “quite annoying, particularly for the older customer that will typically shop at Wilko.” Still, some consumers believe Wilko to be one of the High Street’s final holdouts.
What exactly went wrong at Wilko?
Wilko has gradually shed hundreds of positions over the last three years. To reduce costs, it closed 15 outlets and changed the organizational structure of its head office. It shed roughly 1,600 employees between 2021 and 2022, bringing its total to about 12,400.
Of course, the retailer’s reliance on foot traffic on high streets could have been helped by the coronavirus’s limitations. Because of this, sales at its high-street locations saw a 40% decrease in customer traffic in 2020.
While the pandemic did affect trade, government COVID support also obscured its issues. They did it by providing company rate relief, tax rebates, and limitations on landlords’ ability to call in rentals.
When that support ended, Wilko was left insecure. To survive, it borrowed £40 million from restructuring expert Hilco. Also, it changed its leadership team in January. This was done in the face of growing uncertainty about its survival due to its failure to make supplier payments and the resulting gaps on the shelves. At least one player losing their credit insurance made its problems worse. This has led to other suppliers pausing supplies.
According to retail analyst Richard Hyman, one of Wilko’s most significant issues was having too many large shops on expensive high-street sites. Although convenient for customers without cars, selling discounted goods with slim profit margins in locations with expensive rent would always be challenging.
According to Hyman, Wilko needed to eliminate slow-moving products like furniture from its product lines. This indicated that it required money to move through the company quickly enough to pay debts.
Many of Wilko’s DIY and furniture competitors, such as B&Q, Homebase, and B&M, trade-in retail parks and other out-of-town locations. Because in those places, it can be inexpensive to trade. Also, shoppers can park their cars there to carry large purchases.
Wilko has experienced rising competition from the growth of many value-based chains in the UK. This includes B&M, Home Bargains, Poundland, and Savers. They have chipped away at market share across the several categories it sells and used its size to offer low pricing.
“Regarding price and design, Wilko has been trapped in a pincer movement. B&M, Home Bargains, and The Range have outpriced it and cannot compete with Dunelm or Ikea regarding style.” According to Matt Walton, an analyst at retail research firm GlobalData.
Wilko struggled to keep its shelves stocked due to the large variety of sold goods. Also, all shops had supply chain issues due to Brexit-related logistics issues and production delays related to COVID-19.
Already a challenging task, finding the right formula has been made more difficult by Wilko’s ownership structure. Lisa Wilkinson only resigned as chair earlier this year. However, the original Wilkinson family is still in charge of the company.
Wilko’s Financial Struggles and Revolving Leadership:
Despite operating at a loss the previous year, Wilko distributed £2.25 million in dividends to its shareholders through the end of January and another £750,000 in February.
The managing director, Alison Hands, also left the company in January. It happened about 18 months after she began her position under Wilkinson’s supervision. Jerome Saint-Marc resigned as CEO in December of last year. Alex Russo, a former Asda finance official, served as Wilko’s CFO for only around two years before moving to B&M, where he is currently the CEO, in 2020.
The current chair, Chris Howell, and CEO, Mark Jackson, who took over before Christmas, have their work cut out. They focus on finding an investor who feels they can find a way forward for Wilko. It’s because customers cut back on spending due to rising food bills, mortgage payments, and high energy prices.
According to Hyman, anyone entering Wilko would need a significant investment of cash and a fair amount of patience. Walton claims Wilko must come up with a more “compelling offer. This is to get customers to consider purchasing from the company. He claims it needs more appealing storefronts, better design, and stronger connections between its online and offline businesses.
Without a clear plan for what its retail offering should be and how to do this, Walton warns, Wilko risks going the way of Woolworths and being irrelevant.
Wilko’s Store Closures and Job Losses: “A Struggle for Survival”
Within a few days, Wilko will start closing its doors. The first set of closures will begin on September 12, 2023 (Tuesday). 24 stores will close early this week, and another 28 will close on Thursday, September 14, 2023. 1,016 jobs will be lost as a result of the news. After Wilko went into administration in August, more than 400 outlets and 12,500 jobs were in danger.
Many Wilko stores will permanently close in the coming days. It happens due to the once-vibrant high-street retail chain’s terrible financial problems and supply challenges. Last week, there were more layoffs, with 229 positions being eliminated at two distribution locations.
The 300 remaining Wilko locations and thousands of jobs are still in doubt. After failing to locate a buyer, managers filed a notice of decision to appoint administrators last month. They praised the staff for their help. They also declared they “remain committed” to assisting anyone affected by the choice.
Edward Williams is a joint administrator at PricewaterhouseCoopers. He stated: “Sadly, store closures and team member layoffs from those outlets are now necessary without suitable offers for the entire firm. The neighborhoods these businesses have been a part of will feel their loss. Also, even throughout the recent uncertainty, the team members who gave them such loyal service will feel it.”
Last week, it was revealed that B&M would pay £13 million to purchase up to 51 outlets. B&M has not yet specified which Wilko stores it has acquired or whether it will keep employees. The Wilko moniker is probably going to vanish from these shops. It’s because it is projected that the stores will be renamed B&M.
When and which Wilko stores are they closing?
As of today (September 7), 52 Wilko locations have stated that they will be closing permanently beginning next week. In the UK, 24 stores will close on Tuesday, September 12, and another 28 stores will close on Thursday, September 14.
The following shops will close on September 12:
- Bishop Auckland
- Cardiff Bay Retail Park
- Liverpool Edge Lane
- Port Talbot
- Tunbridge Wells
- Westwood Cross
The following stores will close on Thursday, September 14.
- Barrow in Furness
- Basildon, Belle Vale
- Great Yarmouth
- New Malden
- North Shields
- Queen Street Cardiff
- Southampton-West Quay
- St Austell
Fourteen additional Wilko locations have already been announced to be closing. But many of them still need to set closing dates. They were:
- The Fort, Birmingham
- Narborough Road, Leicester
- Merthyr Tydfil
Has Wilko filed for bankruptcy?
On August 10, 2023, Wilko formally entered administration after executives said the company’s time had “run out. The wallet-friendly retailer issued an emotional message from Wilko’s CEO, Mark Jackson, to announce the news.
“We left no stone unturned when it comes to maintaining this amazing firm,” he wrote. “But regrettably, we are forced to make the challenging decision to enter administration.”
“I’d want to take this chance to thank all of our customers, suppliers, partners, and dedicated team members throughout our stores, logistics, and support center for sticking with Wilko. This is on behalf of the directors and the Wilkinson family.”
“We’ve all worked very hard to keep this wonderful business going. But we must admit that time is running out. Now, we must do our best to work with our chosen administrators to save as many jobs as possible for as long as possible.”
Is Wilko still accepting online orders?
Customers should visit their neighborhood store just before it closes. By doing so, they can save money on new bedding or back-to-school supplies. There is no possibility of ordering online. It’s because both the click-and-collect and home delivery services have been halted.
Who has purchased Wilko?
Administrators were still looking for a buyer to keep the 400 stores and 12,500 employees. However, an agreement has been reached to buy a portion of the company.
As part of a $13 million deal, Wilko rival B&M has committed to save up to 51 outlets. But it currently needs to be determined which stores have been acquired.
The owner of HMV, Doug Putman, is now in talks with executives over another agreement. They may be able to retain an additional 200 stores. The administrators at PwC have been “looking all interested in the business.” They are vigorously working with potential buyers.
What is going to happen to Wilko?
After executives failed to find a buyer, Wilko hired administrators during the summer. But this does not imply that the beloved budget business will never again exist.
Wilko would not be liable for any of its prior debts if a buyer decided to take it on. The chain might be saved in several ways, such as
- By maintaining the real stores and the brand itself,
- Merely buying the building, or
- Just purchased the remaining inventory.
Budget retailer B&M has successfully saved 51 shops since fall 2023. Other deals, though, have yet to happen.
A PwC representative previously stated: “Since we were appointed Wilko’s administrators, we have had extensive talks with parties. They expressed interest in buying all or part of the company.”
“Discussions with people interested in purchasing a portion of the company are ongoing. But it is clear that this interest is not centered on the entire group.”
“Unfortunately, it is possible that layoffs and store closings may occur in the future. Thus, it was necessary to inform employee representatives today. We know workers will feel even more worried as a result.”
“We will be helping staff during this extremely frightening time. Also, we are working closely with the government, JobCentre Plus, unions, and major businesses. This maximizes the chances of a quick return to work for employees in the case of redundancies,” he added.
The ‘Wilko Administration Sale’ started a few weeks ago in Wilko locations nationwide. Online home delivery and click-and-collect services have been discontinued. But thousands of items appear to be offered at even lower prices than before. ‘Secondary’ sales also feature discounts on stationery, plants, gardening equipment, Christmas gifts, home, cooking, and DIY supplies. Go to the Wilko store closest to you immediately if you’re looking for a great deal!