Discount retailer losses almost at £40m; MD exits

Budget homewares and household goods retailer Wilko has reported a decline in sales while profits plummeted into the red.

According to its latest filed accounts for the year ended 29 January 2022, total sales fell by 3.6% to £1.31bn from £1.36bn in 2021, a reduction by £43.2m.

Gross profit decreased from £562.3m to £535.8m, while pre-tax losses resulted at £36.7, significantly down from a profit of £4.3m recorded the previous year.

Stated within its report, the company said like-for-like sales were down 3.1% with stores hit by the impact of Covid as footfall declined and did not return to pre-pandemic levels. As for online, wilko.com showed “moderate growth” with sales registering £81.3m.

During the period, the retailer closed one store taking its portfolio to 413 and conducted an in-depth review of its store estate, identifying 70 locations where there was opportunity to improve store profitability. This is either by reducing costs via an improved property deal or by developing its offer to improve sales. Following this review, and earlier this year, Wilko announced the proposed closure of 15 stores, of which two remained open.

The group invested £16m into increased stockholding as a result of the global supply chain challenges.

In more recent news, Wilko sold its Worksop-based warehouse to DHL for £48m in a sale and leaseback deal, while its managing director, Alison Hands, will leave the business, which is currently in talks with lenders to secure emergency funding of £30m, to pursue a role at Co-Op. It is understood that Wilko is in talks with Bantry Bay after it was unable to agree an extension of its revolving credit facility due to interest rate rises.

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