Sun. Jul 14th, 2024
alert-–-wilko-was-‘saved-from-the-scrapheap-because-shoppers-love-the-brand-–-but-it-will-have-its-work-cut-out-competing-with-other-discount-retailers’,-expert-warns-as-chain-returns-to-high-street…-is-a-store-opening-near-you?Alert – Wilko was ‘saved from the scrapheap because shoppers love the brand – but it will have its work cut out competing with other discount retailers’, expert warns as chain returns to high street… is a store opening near YOU?

Wilko was ‘saved from the scrapheap because of shoppers’ love for the brand’, an expert said today after it emerged the collapsed retailer will return to the high street.

The chain’s new owner The Range revealed today that five new standalone Wilko stores are due to open before Christmas – two in Plymouth and Exeter in Devon, followed by two unidentified sites in the South East and one in the North of England.

Financial expert Susannah Streeter said there was clearly ‘affection for Wilko among throngs of value conscious shoppers’ but added that its store locations will be ‘key’.

Ms Streeter, head of money and markets at Hargreaves Lansdown, also warned that Wilko will ‘still have its work cut out to keep prices low and win back custom’.

Sources told that after the first new five stores open, more will follow next year across England, Scotland, Wales and – for the first time – Northern Ireland.

** Are you excited for the return of Wilko? Please email: [email protected]om ** 

A Wilko store in Slough, Berkshire, was one of the 400 shops to close in recent months

Pet products with the Wilko branding are on the shelves at The Range stores from today

Wilko paint and decorating products are also now being stocked by The Range

The Range has also begun selling Wilko gardening essentials on its shelves

Wilko customers will be able to stock up on its DIY products again at The Range

A mixture of former stores and new sites are said to be under consideration, with original Wilko employees expected to be involved. Customers will also be able to use in-store terminals to make home delivery orders from a selection of 100,000 items.

ANALYSIS: Wilko will still have its work cut out to keep prices low

SUSANNAH STREETER

Wilko’s famous red and white frontage is set to stay on as a feature on the British retail landscape, saved from the scrapheap because of shoppers’ love for the brand.

Although it was expected that CDS Superstores would sell Wilko-branded products across its network of Range stores, and via the website it now owns, the re-instatement of standalone stores was far from certain.

But affection for Wilko among throngs of value conscious shoppers has convinced the new owners that demand will be high, and customers will surge through the doors of the five stores it plans to open before Christmas.

It is increasingly competitive in the value sector, as the big grocers compete with discount chains for business, so it’s not surprising that the CDS Superstores is showing caution by only opening five initial stores, although there are more in the pipeline next year.

The choice of location will be key, as part of the reason Wilko came so badly unstuck was that many of its sites in its sprawling store estate didn’t have enough parking and were too large and expensive.

In this climate a good location, the right product mix and a razor-sharp focus on shoppers’ wallets will be all-important. These are all factors CDS Superstores will be zeroing in on as it plans these new concept stores.

It’s chosen high street locations for the first two openings in Devon, counting on brisk footfall as shoppers head out for Christmas sprees.

Although there is likely to be a huge boost of shopper enthusiasm at the launch, it will still have its work cut out to keep prices low and win back custom but will undoubtedly be helped by supplier relationships forged through partnerships built up through The Range business.

Susannah Streeter is head of money and markets at Hargreaves Lansdown

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The Range had not been expected to set up standalone Wilko shops. But its new stores will offer Wilko products for cleaning and household, decorating and DIY, garden and outdoor, homeware, pets and wildlife, storage and Christmas.

From today, Wilko products will be also stocked in The Range shops. They have been sold online again since October 13 when The Range relaunched the Wilko website.

The 93-year-old retailer shut its remaining shops on October 8 after collapsing into administration, prompting an outpouring of sadness from customers.

Commenting on the new stores, Ms Streeter said today: ‘Wilko’s famous red and white frontage is set to stay on as a feature on the British retail landscape, saved from the scrapheap because of shoppers’ love for the brand.

‘Although it was expected that [owner] CDS Superstores would sell Wilko-branded products across its network of Range stores, and via the website it now owns, the reinstatement of standalone stores was far from certain.

‘But affection for Wilko among throngs of value conscious shoppers has convinced the new owners that demand will be high, and customers will surge through the doors of the five stores it plans to open before Christmas.’

She added that the value sector was becoming ‘increasingly competitive’ as major supermarkets compete with discount chains for business, and it was therefore unsurprising that only five initial stores would open in a ‘cautious’ approach.

Ms Streeter continued: ‘The choice of location will be key, as part of the reason Wilko came so badly unstuck was that many of its sites in its sprawling store estate didn’t have enough parking and were too large and expensive.

‘In this climate a good location, the right product mix and a razor-sharp focus on shoppers’ wallets will be all-important. These are all factors CDS Superstores will be zeroing in on as it plans these new concept stores.

‘It’s chosen high street locations for the first two openings in Devon, counting on brisk footfall as shoppers head out for Christmas sprees.

‘Although there is likely to be a huge boost of shopper enthusiasm at the launch, it will still have its work cut out to keep prices low and win back custom but will undoubtedly be helped by supplier relationships forged through partnerships built up through The Range business.’

Administrators from PricewaterhouseCoopers (PwC) sold off a range of assets, including the Wilko brand and some store properties, as they sought to recover funds to pay off outstanding debts after failing to secure a full rescue deal.

As part of the process, the Wilko brand, website and intellectual property were bought by rival The Range for £5million.

A message on the Wilko.com website, which returned on October 13 after the chain’s collapse

Staff empty one of the last Wilko stores to close, in Stratford, East London, on October 8

A family look inside the Wilko store in Wood Green, North London, which closed on October 8

Alex Simpkin, chief executive of CDS Superstores, trading as The Range and Wilko, said today: ‘For the majority of its 93 years, Wilko was an incredibly successful business that gave its customers exactly what they needed to get their home and garden jobs sorted.

Which Wilko products can you buy at The Range from today? 

Here is a selection of Wilko products in the pet and bird feed categories available at The Range from today:

  • Tuna loin selection cat food – £2.75
  • Ultra clumping cat litter – £3.79
  • Ten litres of wood pellets – £5
  • Litter tray liners – £1.50
  • Packs of wood shavings – £1.99
  • Dog poo bags – 59p
  • Six mealworm suet blocks – £4
  • Half-coconut feeder – £1
  • Wildly Tasty Insect Medley – £1.50

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‘It was their advanced own-brand capabilities that encouraged us to invest in the brand and wilko.com and we’re excited to now be selling Wilko products online once more and across our 200 stores network.

‘The public reaction to the loss of Wilko stores was undeniable. It’s clear that there’s a huge love for Wilko and we’ve seen an encouraging demand for the return of its own-brand products. That’s why we’ve taken the decision to reintroduce Wilko back to many of the high streets and communities that it used to so proudly serve.’

Among the Wilko products being stocked at The Range from today for pet owners are tuna loin selection cat food (6 x 50g for £2.75), ultra clumping cat litter (£3.79), ten litres of wood pellets (£5), litter tray liners (£1.50), large packs of wood shavings (£1.99) and dog poo bags from 59p.

They are also selling Wilko bird feed products such as a pack of six mealworm suet blocks (£4), a half-coconut feeder (£1) and a Wildly Tasty Insect Medley (£1.50).

There is a selection of kitchen, bedroom and bathroom paint which has been reduced from £19 to £7.99 as part of an in-store launch offer.

Grass seed, flower and vegetable seeds are also now available.

Speaking about the addition of Wilko products to existing The Range stores, Mr Simpkin said: ‘Wilko is a much-loved and trusted UK brand and it was important to us to allow it to live on.

Wilko shoppers enter a store in Liverpool last month before it closed along with the other 400

‘We noticed Wilko customers were really disappointed to see stores closed, especially when it seemed they would no longer be able to buy their favourite products.

What went wrong at Wilko and will it return? 

What is Wilko?

Wilko was founded in 1930 by James Kemsey Wilkinson, who opened the firm’s first store in Leicester under the Wilkinson Cash Stores brand.

By 1941 it was simply known as Wilkinson and grew as a hardware chain across UK high streets.

The firm, which simplified its name to just Wilko in 2014, grew to operate about 400 stores and employ 12,500 people in both its shops and Worksop headquarters earlier this year.

When did financial trouble begin?

The retailer had remained robust for many years despite wider challenges on the UK high street, growing as rivals such as Woolworths suffered issues.

Wilko reported strong profits for most of the 2010s and saw its turnover peak at more than £1.6billion in 2018, but by this point it had seen profitability begin to fall amid pressure on high streets.

Turnover has decreased in every year since as it faced challenges in the sector compounded by the pandemic and tighter consumer budgets due to the cost-of-living crisis.

Why did it attract fewer shoppers?

Wilko saw shopper numbers drift amid increased competition from rivals such as B&M and Home Bargains.

These shops have continued to grow, with consumers 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 had the majority of its sites.

What attempts were made to save it?

PwC held talks with several interested companies, some of which wanted to buy some of the stores while others were interested in rights to its name.

The main hope lay with HMV owner Doug Putman, who had been in talks to take over the firm as a whole and keep about 200 shops as a ‘going concern’, but no agreement could be reached mainly due to ‘infrastructure’ costs.

What is happening to its stores?

PwC agreed a deal with rival B&M to purchase up to 51 Wilko stores.

Meanwhile, rival Poundland agreed to buy up to 71 Wilko stores in a separate deal. Poundland has already reopened 20 of these shops under its own brand.

The remaining stores are seeing their lease agreements end and it will be up to their landlords to find new tenants.

The Range has announced five new Wilko stores in Plymouth and Exeter, two in the South East and one in the North – to be confirmed soon. But it is not yet clear whether they will be in former Wilko shops or in new sites.

Will shoppers see the brand again?

Administrators sold the brand, wilko.com website and related intellectual property to The Range for £5million. The website is now back online, Wilko products are being stocked at The Range from today – and standalone Wilko stores will follow over the coming months.

What is happening to workers?

Most of Wilko’s 12,500 workers faced redundancy after being transferred as part of administration deals.

The Range took on 36 workers from Wilko’s digital team after buying its brand and website. And Poundland has offered jobs to over 200 former Wilko workers in recent weeks.

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‘We have worked hard and at pace to ensure they still have access to their favourite lines by bringing them into our own stores and online at wilko.com within a matter of weeks.’

He added that the retail chain was ‘moving forwards with an aggressive growth strategy’, with plans to open more stores in the near future.

The CDS Superstores property team is said to be ‘encouraging landlords across the UK to open productive conversations if they’re interested in being considered for the Wilko rollout programme’.

Mr Simpkin continued: ‘Our team from Wilko that joined us through the acquisition has shown true resilience, they’ve set to work to integrate the best parts of Wilko into The Range’s operational systems. 

‘We’re expanding that team every day with new Wilko hires and can’t wait to extend that back out to local communities. We’ll endeavour to give ex-Wilko employees priority as a part of the recruitment process for the new stores.’

The Range, which is owned and run by self-made billionaire Chris Dawson, sells more than 80,000 products across 18 departments.

It started life as a market stall trading across the South West, with the first store opening in 1989 under the name ‘CDS’. There are now more than 210 stores across the UK and Ireland.

It agreed a partnership with the supermarket Iceland in 2018, with more than 75 branches now offering Iceland products.

On October 13, Wilko relaunched online, less than a week after the retailer shut the doors of its last high street shops for the final time following its collapse.

Sources close to the brand told at the time that they were keen for consumers to know Wilko.com was the official website after police issued a warning when some shoppers reported losing hundreds of pounds on a bogus website for the collapsed retailer.

Wilko closed its final 41 high street shops on October 8, having shut its 400 UK stores over the previous month after going into administration in August.

The chain had been selling off its last remaining products to recover more cash to help repay its outstanding debts.

The final closures brought to a close one of the largest high street failures in recent years, with almost all of Wilko’s 12,500 workers being made redundant.

Wilko was originally founded by James Kemsey Wilkinson in Leicester in 1930.

The family-owned business hired administrators from PwC after it came under pressure from weak consumer spending and debts to suppliers.

PwC then held talks with interested firms but was unable to secure a rescue deal for the whole firm, with a potential takeover by HMV owner Doug Putman collapsing.

As a result, administrators sold off a range of the company’s assets to pay off creditors.

Deals were agreed to sell up to 71 stores to Poundland and up to 51 to fellow discounter B&M. However, neither included staff.

Earlier this month, Poundland said it had offered jobs to more than 200 former Wilko workers and had already reopened 20 of these sites under its brand.

Poundland is thought to be aiming to open all the former Wilko stores it bought by the end of the year, with its new lease agreements set to be completed in early autumn.

However, The Times reported this month that some of the store takeovers could fail after the new owners were accused of delaying completion with efforts to set up new rent and lease arrangement under more favourable terms.

Administrators for Wilko confirmed in documents this month that the business owed around £625million when it went bust.

The filings also showed the pension fund was left more than £50million in deficit and was unlikely to receive more than £4million following the insolvency process.

** Are you excited for the return of Wilko? Please email: [email protected] ** 

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