Wilko Struggles to Survive Amid Cost of Living Crisis
Discount retailer Wilko is facing significant challenges as it struggles to survive in the midst of a cost of living crisis. Despite catering to cost-conscious consumers who are seeking value, the company has been unable to thrive like its competitors.
While direct rivals such as B&M, Home Bargains, Poundland, Lidl, and Aldi have experienced success, Wilko’s 400 stores and 12,500 jobs are now at risk. Founded 93 years ago in Leicester as Wilkinsons by James Kemsey Wilkinson, the company has been burdened by unsustainable debt, despite attempts to rebrand and change management multiple times.
In an effort to turn things around, the company implemented a new plan at the beginning of the year. This included removing Lisa Wilkinson, the great-granddaughter of the founder, as chairwoman and appointing Mark Jackson as the third chief executive in as many years. Despite recording a loss of £36.8 million in 2022, Wilko paid a dividend of £3 million to its owners, led by the Wilkinson family, and attempted to restructure its debt.
As part of its restructuring efforts, Wilko raised £48 million through a sale-and-leaseback of a distribution center and secured a two-year £40 million loan from restructuring specialists Hilco. However, in its last accounts from January of the previous year, the company warned that it would not have sufficient financing to withstand a severe downturn in trading activity and projected further sales decline.
Now, that downturn has arrived, putting the future of the chain in jeopardy. If Wilko is unable to survive, it will leave a significant void on the high street, particularly as many of its stores were acquired following the collapse of Woolworths.
Despite the challenges it faces, Wilko remains committed to finding a solution and ensuring its long-term viability in the retail market.
© 2023 4Press.biz
