June 14, 2024


Clothes that smile


Wilko falls to a £36.6m loss in ‘incredibly difficult period’

// Wilko swung to a £36.8m loss at the beginning of the year
// It is in talks with lenders about securing £30m in emergency funding

Wilko has reported a loss for the beginning of the year after lockdowns, supply chain disruption and a dip in consumer demand impacted trading.

The discount retailer, which is currently in emergency talks with lenders to secure a £30 million lifeline, reported a loss of £36.8 million in the year to January 29, 2022.

EBITDA nearly halved from £48.3 million to £24.2 million, while like-for-like sales declined 3.1% year on year to £1.32 billion.

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Wilko has been in talks with lenders about securing £30 million in emergency funding to ease cost pressures heading into Christmas.

It invested £36.1 million into its supply chain and multichannel capabilities last year. It said categories such as gardening and pet care were strong performers, with sales up 11.8% and 11.9% year on year respectively.

“Last financial year was tough for retail and that has continued into this year,” Wilko chief executive, Jerome Saint-Marc said.

“We’ve remained focused on cost control and driving sales, as well as making some material changes to the way we operate in the face of difficult trading over the past two years.

“The recent sale and leaseback of our distribution centre to DHL unlocked £48m, which has enabled us to repay our revolving credit facility in full. Our relationship with our lending partners is solid.

“We’re taking this opportunity, now that the deal is done, to review how we manage our ongoing financing to best trade through the current retail environment while continuing to invest in our future.

“We’ve made Wilko products available on three additional marketplaces – Amazon, eBay and OnBuy – driving significant sales growth year on year. And, excitingly, we have even more omnichannel enhancements to come.”

Wilko has accelerated its omnichannel offer during the period to drive growth by launching click-and-collect in 72 stores with 69 more stores coming online before Christmas.

The trading update comes after Wilko managing director Alison Hands revealed on Monday that she was leaving the discount retailer.

Hands has been at Wilko since 2018, starting as commercial execution director before moving on to trading director then managing director in 2021.

She will stay on at Wilko until January to “ensure a smooth transition”, according to Saint-Marc. She will take over at Lincolnshire Co-op in April.