British discount retailer B&M recently said that it will acquire 51 stores of collapsed Wilko, a month after the homeware and household goods discount retailer fell into administration.
The acquisition of the assets will be for a maximum consideration of £13 million, B&M added.
Wilko fell into administration in August after a buyer could not be found, putting its 400 stores and 12,500 jobs in danger.
Last month, Sky News reported that Canadian businessman Doug Putman was finalising a deal to buy a majority of Wilko from its administrators.
Wilko, which sells everything from hardware goods to cleaning products, toys and gardening equipment, has an annual turnover of £1.2 billion.
It started in 1930 as a single hardware store in Leicester, central England, but fell victim to Britain's tougher economic environment and cost-of-living crisis, grappling with high inflation and 14 consecutive interest rate rises since December 2021.
Series Of Remarks
After interviewing a number of executives, Orwa Mohamad, Analyst at Third Bridge made a series of remarks regarding B&M buying Wilko stores. These are informed by the insights we're hearing from industry experts:
“B&M’s ambition to get to 950 has been given a significant boost by the potential cherry picking of Wilko’s best stores, i.e. the ones that are most profitable.”
The primary research business servicing private equity firms, credit investors, hedge funds, and strategy consultants, added, “B&M’s general focus on out-of-town locations means it can incorporate many of Wilko’s high street stores and locations with limited cannibalisation impact.”
“From an assortment perspective, there’s a high degree of crossover between Wilko & B&M in households, garden, toys, accessories. Quite often, Wilko & B&M sell the same product, meaning consumers have a strong incentive to continue frequenting those stores regardless of the banner.”
Read More: B&M Sees Higher Profit As Britons Hunt For Bargains
News by Reuters, additional reporting and edited by Donna Ahern, Checkout. For more Retail stories, click here. Click subscribe to sign up for the Checkout print edition.
