The Fall of Wilko

When it comes to retailers and financial stress, the narrative seems to be stuck. Over the past decade or more, there have been what many would have considered to be institutions fall by the wayside in terms of big names, family favourites and familiar sights on the nation’s high streets.

Ask any member of the public and they will likely be able to reel off a list of shops that have gone by the wayside and some that many would consider to be a surprise.

In the past decade or more, we’ve seen the demise of Woolworths, Maplin, Debenhams, BHS, Toys R Us and more brands that many would consider essential brands to the high street.

In the past year, we’ve had even more brands encounter problems such as M&Co, Paperchase, Joules, Made.com, McColl’s, AMT, Missguided and Studio Retail.

The latest retail giant to encounter problems and really face serious issues is home specialists Wilko. Although a mainstay on many high streets and retail parks across the country, they are at risk of collapse. This is one of the largest outfits to be at risk in the last few years, with more than 12,000 jobs at risk.

At the time of writing, administrators were about to be called, but this is simply a case of another retailer not changing its model in rapidly changing times. Not only have they been bitten by rising costs and customers tightening their spending, but they have failed to adapt beyond a post-pandemic retail model. With a lot of consumers opting to buy goods online, the stack them high, sell them cheap model seems destined for trouble if retailers fail to adapt.

Wilko now has 400 stores and its 93-year legacy could well be facing the end.

In recent months, it had been seeking to finalise a company voluntary arrangement (CVA) – a mechanism that would trigger steep rent cuts at hundreds of stores but avoid any closures.

As we have predicted in nearly every case of financial stress, this is not the first seemingly enduring brand that has encountered problems and it certainly will not be the last. Adapting or moving with the times seems to be a way for these companies to survive.

For example, Thorntons closed their brick and mortar stores, but Tesco now owns the brand and you can still purchase the chocolates in their stores. Similarly, Argos have realised their warehouse model works within large supermarkets, so space is now utilised in the likes of Sainsbury’s (who own Argos) for this well known brand.