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11 months ago
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Wilko returned to the high street today as huge queues formed outside two branches that opened after parts of the collapsed chain were bought up by a rival retailer.
Keen shoppers stood from around 6am this morning in eager anticipation of the shutters rising at 9am on the stores at shopping centres in Plymouth and Exeter.
Three more stores are set to reopen before Christmas, with one at Luton's Arndale Centre on December 8. The locations of the two other sites are yet to be confirmed.
It comes after the high street stalwart in collapsed into administration in August, resulting in the closure of 400 stores and the loss of more than 12,000 jobs.
But a £5million deal in September between administrators PricewaterhouseCoopers and homeware chain The Range meant some branches are making a comeback.
Huge queues build up outside the new Wilko store in Exeter's Guildhall Shopping Centre today
Staff at the new Wilko store in Exeter, Devon, pose for a group photograph this morning
People queue outside the new Wilko store in Plymouth's Armada Centre this morning
Staff at the new Wilko store in Plymouth pose for a group photograph this morning
Three more shops are set to pull up their shutters, with Luton Arndale Centre opening shop on December 8. The location and reopening date of the other two stores are yet to be confirmed
The Range had promised Wilko shoppers that they should expect to see pick and mix, a pet section and a paint mixing service on site at some of the new stores.
Where are the new Wilko stores in Britain?
- Plymouth - Unit A, Armada Centre, Mayflower Street, PL1 1QL - Opening two
- Exeter - Unit 100, Guildhall Shopping Centre, EX4 3HP - Opening today
- Luton - 141/147 Arndale Centre, LU1 2TN - December 8
Two more sites to be announced as opening before Christmas
Shutters at the new Plymouth branch were officially pulled up this morning by the town's Lord Mayor and Mayoress, Mark and Samantha Shayer.
Former staff from the town's old store were at the head of the queue for jobs at the Armada Way site, with the company rehiring 30 of its 42 previous employees.
Making a comeback to the branch was previous store manager David Prout, who told PlymouthLive: 'We're thrilled to be opening the doors of one of the first new Wilko stores and anticipate a great response from past and future Plymouth customers alike.'
Some 46 miles away in Exeter's Guildhall Shopping Centre, the reopening of Wilko drew in lengthy queues of excited shoppers.
Chris Dawson, owner of The Range, said he and his 'great' staff were 'really excited' to see the store open again.
He told the BBC: 'Well you can see the crowds that have come here today. I believe in the brand and it looks like the public believe in it.'
Similarly to Plymouth, the Exeter store was officially reopened by the town's Lord Mayor, Kevin Mitchell.
Previous employees also accounted for one third of the newly reinstated store's workforce, according to the BBC.
Lengthy queues outside the new Wilko store at the Guildhall Shopping Centre in Exeter today
Shoppers are welcomed to Plymouth's new Wilko store this morning as it opens
Keen shoppers outside the new Wilko store in Plymouth this morning in eager anticipation
The Exeter Wilko store is officially reopened by the town's Lord Mayor, Kevin Mitchell.
Keen shoppers outside the new Wilko store in Plymouth this morning in eager anticipation
Shoppers enter the new Wilko store in Plymouth, Devon, this morning after it was opened
The manager of the store, Tom Murrin, echoed that his team were 'thrilled' to be one of the first new Wilko shops to open.
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 new Wilko stores in Plymouth and Exeter, one in Luton, another in the South East and one in the North - locations to be confirmed soon. More openings are planned next year across Britain.
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.
The Range said it plans to recruit up to 80 local staff per new Wilko store, with ex-Wilko employees prioritised for interviews.
He told DevonLive that they were expecting 'a great response from past and future Exeter customers alike.'
Earlier this year, the retailer shut its 400 UK shops after tumbling into administration in the face of hefty debts and weak consumer spending.
Almost all of Wilko's 12,500 workers were made redundant as a result.
Administrators for the business sold off a raft of the company's assets, including up to 71 stores to become Poundland shops, and up to 51 stores to reopen under rival discounter B&M.
The process also saw the parent firm of The Range, CDS Superstores, buy the Wilko brand for £5million.
It had already relaunched the Wilko.com online platform and started selling products under the Wilko brand within The Range shops.
The new owners said the relaunched stores will stock the retail brand's traditional homeware and garden products, with a 20 per cent wider range of items.
Another store is set to open in Luton next week as CDS brings the brand back to high streets across the UK.
Alex Simpkin, chief executive officer of CDS, said: 'The customer reaction to the new stores opening today has been fantastic and proves we're doing the right thing in returning this much-loved retailer to UK high streets.'
CDS plans to open more Wilko stores next year and said it is planning to expand the brand to Northern Ireland for the first time.
It comes after the former chairwoman of Wilko apologised this week to the thousands of people who lost their jobs when the retailer went bust.
Speaking to MPs on the Business and Trade Committee on Tuesday, Lisa Wilkinson also said former prime minister Liz Truss's mini-budget was one of the reasons behind the company's collapse in August this year.
'I am devastated that we have let each and every one of those people down with the insolvency of Wilko,' she said.
'I don't know how to put into words how sad I am that we have let down all our team members, all our customers, our suppliers, and our advisers.'
Pushed by committee chairman Liam Byrne to apologise directly, Ms Wilkinson said: 'You can have the word sorry, of course I am sorry... I am sorry that we are not there supporting these people anymore.'
Ms Wilkinson appeared visibly upset when she explained to MPs the reason why she had not previously sent out an apology to staff.
'Before Wilko went into administration, or it might have been shortly after ... I asked to do an announcement to all team members to thank them, but the advice from the directors and the administrators was that I should not do that.
'Subsequently, I have responded to anybody who messaged me, and I am not difficult to get hold of.'
Ms Wilkinson said there were a number of reasons for Wilko's failure, one of which was soaring interest rates after the mini-budget in autumn last year.
'We were about to enter into secured lending arrangements with Macquarie when the 2022 mini-budget happened,' she said.
'Literally we were in the midst of that, and at that point the interest terms on that loan were hiked massively and that became infeasible. So, that was a contributor.'
Former chief executive Mark Jackson also admitted to an 'enormous mistake' that was made in 2018, involving purchasing products in US dollars that led to a loss of about £40 million.
Mr Jackson, who joined the company in December 2022, also revealed that Wilko came close to finding a rescue deal, but ultimately failed.
'I came in knowing that the business was in distress and that there was a window of opportunity to turn it around,' he said.
'A number of things went against us. I still think this business should exist and I think somebody should have invested in it.'
Lengthy queues outside the new Wilko store at the Guildhall Shopping Centre in Exeter today
Shutters at the new Plymouth branch were officially pulled up this morning by the town's Lord Mayor and Mayoress, Mark and Samantha Shayer
Staff prepare shelves of paint at the relaunched Wilko store in Exeter this morning
Opened doors at the the relaunched Wilko store in Exeter today after the chain's collapse
Shelves of paint are ready for customers at the relaunched Wilko store in Exeter this morning
It came after the committee heard evidence from the GMB union that Wilko had told it of a 'challenging trading position' as early as 2010.
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.
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
'We've got correspondence between ourselves and Wilko where they identify a challenging trading position from about 2010,' said GMB national officer Nadine Houghton. They identify that the discount retailers are an issue.'
She said that, rather than leaning into that, the company tried to change its business model.
'What you see is a move away from this idea of Wilko as a discount retailer,' Ms Houghton said.
She added: 'The internal messaging to our members... was very much this attempt to move very much to almost a John Lewis-type model.'
Elsewhere during the session, Ms Wilkinson was asked whether she was 'burgling a failing business', over £77 million worth of dividends taken out from the company in the decade prior to its collapse.
Another MP pointed out that the Wilkinson family is among the wealthiest in Britain, yet there is a £50 million deficit in the company's pension scheme.
Ms Wilkinson denied that she had used dividends to pay herself in a 'personal capacity'.
She added: 'I don't recognise that statement that we are one of the wealthiest families in the country, and I don't have assets to fill a £50 million hole in the pension scheme.
Yesterday, Mr Byrne told the Commons that regulators should explore every option to 'claw back' dividends taken out of Wilko in the years prior to its collapse
The Labour former minister raised concerns over how former employees would be affected by a deficit in the pension fund.
He asked the Government to 'ensure that regulators explore every option to claw back' dividends paid in recent years to ensure former employees are not 'short-changed'.
Mr Byrne said: 'On Tuesday we finally had answers from Lisa Wilkinson about the mistakes that led to the collapse at that much-loved firm.'
He claimed some of the company's profits 'in the last four years were paid out in dividends to family trusts while the deficit in the pension fund mounted to, now, £50 million'.
He added: 'Will the Secretary of State ensure that regulators explore every option to claw back those dividends so that Wilko pensioners are not short-changed?'
Business minister Kevin Hollinrake said: 'Clearly, the insolvency service is looking at this, is looking at the director's conduct report from PricewaterhouseCoopers, the administrators.'
He added: 'It has been clear in that report so far they have no evidence of director misconduct, but there's further work ongoing.
'The Insolvency Service is due to meet the administrators PricewaterhouseCoopers in January and we'll look at that situation as it unfolds.'
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