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Wilko on brink of collapse, retail analyst commentary

With UK homeware retailer Wilko on the brink of collapse, Charles Allen, retail analyst at Bloomberg Intelligence, shares his thoughts:

“Wilko has operated in an extremely competitive sector where the fortunes of participants have diverged. B&M, for example, has thrived with a similar but perhaps slightly more relevant assortment that appeals to today’s consumers. B&M has also moved many of its locations to retail parks which are more convenient for many consumers, especially when they are buying bulky goods. Many Wilko locations are still in traditional town centres or shopping centres nearby, such locations have become progressively less attractive as other retailers have either closed or relocated to retail parks.”

“It is worth remembering that Woolworths in the UK, which also had a similar merchandise mix to Wilko, went bankrupt in 2008, with 807 shops being closed. Overly high rents were one of the reasons for the firm’s fall.”