The brand of bankrupt British household goods company Wilko, whose recent collapse sparked the loss of about 12,500 jobs, will live on after budget rival The Range bought the name in a deal to save some of its stores. The value retailer has “agreed to acquire the Wilko brand, website, and intellectual property,” administrators PwC said Thursday. Administrators say that the sale is valued at around PS5 million, and 36 employees from the Wilko digital team will be transferred over to The Range. The Range will resume online operations in October.
The Range is a popular UK chain that sells low-priced home goods, furniture, and DIY products. It is part of a raft of chains that have increased in recent years as shoppers seek bargains amid the pandemic and cost-of-living squeezes, driving up inflation. Many of those chains, such as Poundland, Home Bargains, and B&M European Value Retail, have gained a strong presence in Britain’s high streets, while others operate mainly in retail parks or out-of-town locations where it is cheaper to rent space.
Wilko, founded in 1930, had become a staple on the country’s high streets but struggled as the recession took its toll and shoppers sought value. The retailer lost market share to its rivals and saw cashflow problems intensify during the pandemic, according to PwC. Its financial difficulties also reflected the broader challenges to traditional retailers as consumers continue to rein in spending and spend less.
Administrators have been trying to sell the entire business since December, but any buyer will unlikely take on all its stores and about 12,500 employees. The deal with The Range will keep some of the chain alive, but many of its stores will likely close in the next few weeks.
Retail analyst Catherine Shuttleworth says The Range has made a smart move by buying the Wilko brand, which could attract customers and keep some of the chain’s current locations open. But she adds that The Range will need to invest significant money and have considerable patience to turn Wilko into a successful business again.
The deal will also benefit rival budget chain Poundland, which agreed to buy 71 Wilko sites and reopen them as its stores earlier this week. That deal is expected to save about 1,600 of the nearly 1,400 job losses slated for the high street chains. The acquisitions by Poundland and The Range, which have yet to disclose the price of their purchases, will further cement the shift in shopping habits as consumers continue to cut back on spending and turn to discount outlets for their everyday goods. The move comes as more than a third of British households now shop online. That is up from just a fifth two years ago when only about a quarter of homes had internet access.
