What happened to Wilko and when will the last shops shut?
The closure of the firm’s remaining 400 stores and the loss of 9,100 staff was confirmed by administrators PwC on Monday
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Your support makes all the difference.The 12,500 members of staff at failed retailer Wilko will lose their jobs after talks to save hundreds of shops broke down.
The high street chain fell into administration in August more than 90 years after it began as a single hardware shop in Leicester.
The closure of the firm’s remaining 400 stores and the loss of 9,100 staff was confirmed by administrators PwC on Monday after attempts to save the company came to an end.
We look at what led to Wilko’s collapse and what the future could still hold for its shops and staff.
– What is Wilko?
Wilko was founded by James Kemsey Wilkinson in 1930, who opened the company’s first store on Charnwood Street in Leicester under the Wilkinson Cash Stores brand.
By 1941 it was simply known as Wilkinsons and grew as a hardware chain across UK high streets.
The company, which simplified its name further to just Wilko in 2014, has now grown to operate about 400 stores and employs 12,500 people in both its shops and Worksop headquarters.
As well as expanding its number of stores, the company has also grown the breadth of products it sells, like pick-and-mix sweets and garden furniture alongside its traditional DIY products.
– When did it first start facing financial trouble?
The retailer had remained robust for many years despite wider challenges on the UK high street, growing as rivals such as Woolworths suffered financial problems.
Wilko reported strong profits for most of the 2010s and saw its turnover peak at more than £1.6 billion in 2018, but by this point had seen profitability begin to decline amid pressure on high streets.
Turnover has decreased in every year since, as it saw challenges in the sector compounded by the Covid-19 pandemic and tighter consumer budgets in the face of higher energy costs and mortgage rates.
Administrators for the company at PwC said these factors contributed to “cashflow pressure and a deterioration in trading”.
– Why did it see fewer shoppers?
Wilko also saw shopper numbers drift as it faced increased competition from rivals such as B&M and Home Bargains.
These shops have continued to grow, with shoppers going in droves to their stores which are often based in out-of-town retail parks.
Retail parks have seen footfall rise sharply in recent years to the detriment of many high streets, where Wilko has the vast majority of its sites.
Phones 4U founder John Caudwell also said it was “not surprising” Wilko faced weaker consumer demand due to a challenging economic climate.
He said: “Individuals and businesses are facing hard times as a result of inflation, post-pandemic situation and the Ukraine war, so there are hard times ahead and they aren’t going to get easier in the short term.
“With that said, it’s surprising that a business like Wilko is struggling because a DIY environment usually prospers a little bit more in hard times because people tend to do things themselves.”
– Were its stores too big and in the wrong places?
Retail analyst Richard Hyman told the PA news agency the retailer’s store estate has also been a hindrance for its recent trading.
“The stores they have are a burden and mostly too big,” he said.
“They have excess space where they are selling a wide variety of products which they probably shouldn’t be selling to start with, stretching into all sorts of different markets.
“They are quite large for a lot of high streets, so have the expense of rents and rates associated, but also don’t have the practicality of retail parks, let’s say.
“There isn’t parking next to a lot of these stores, so for many people it doesn’t make sense to go there to buy large amounts of paint, or other core things like that which they sell.”
– When will the remaining stores close?
Staff at 124 stores were informed on Monday that those sites will close on or before Thursday September 21, and administrators at PwC have said the remaining shops would close by early October.
The company’s two warehouses will also close and most of the activities at its support centre will cease, PwC said.
Most of the remaining 886 warehouse staff are being made redundant on Friday with the 210 support centre employees being held on to the early part of next month.
– What attempts were made to save Wilko’s stores?
Administrators PwC held talks with several interested companies, some of which wanted to buy some of the stores while others were interested in rights to the firm’s name.
The main hope lay with HMV owner Doug Putman, who had been in talks to take over about 200 shops as a “going concern”, but no agreement could be reached mainly because of “infrastructure” costs.
– What will happen to the stores?
PwC has agreed a deal with rival B&M to purchase 51 Wilko stores and Sky News has reported that Poundland is in talks to buy about 100 shops.
It is understood that The Range and Home Bargains are interested in buying the brand and some stores, but the GMB union has said that the bidders are only interested in the property and not the workers.