WILKO has been on our high streets for decades, leaving many shoppers wondering how it fell into troule.
The historic chain fell into administration in August more than 90 years after it began as a single hardware shop in Leicester.
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The closure of its remaining 400 stores and the loss of 9,100 staff was confirmed by administrators PwC after attempts to save the company came to an end.
Wilko’s shops are closing in stages, but PwC said all stores will be closed by the beginning of October.
The retailer had reminded a stalwart on the high street for many years and had managed to navigate challenges – like reduced footfall – that rivals like Woolworths weren’t able to.
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 it 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 exacerbated by the Covid-19 pandemic.
Shoppers were also tightening their budgets in the face of higher energy costs and mortgage rates during the cost of living crisis.
Administrators for the company at PwC said these factors contributed to “cashflow pressure and a deterioration in trading”.
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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.
Plus, Retail analyst Richard Hyman said 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.”
Administrators PwC held talks with several interested companies to save Wilko.
Some of them 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.
PwC has agreed a deal with rival B&M to purchase 51 Wilko stores and sources revealed that Poundland is in talks to buy about 70 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.
Why did Wilko go into administration?
Wilko launched a turnaround plan earlier this year after its sales and shopper footfall came under pressure as consumer budgets were hammered by the rising cost of living.
Wilko said it saw “real progress” against many areas in its plan and made significant cost savings but was unable to improve its finances quickly enough to avoid insolvency.
Administrators are still seeking out potential buyers for the remainder of the chain’s store estate and possibly its brand, although more closures are likely.
Chains have been feeling the pinch since the pandemic while shoppers are cutting back on spending due to soaring inflation.
High energy costs and a shift to online shopping after the pandemic are also taking a toll and many brick and mortar shops have struggled to keep the lights on.
If you want to know how your local high street is affected, you can check out our handy guide to all the shops closing down in September.
Meanwhile, here is the full list of Wilko stores set to close next week.
And for a complete history of the brand and its founder, see our story.
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