The Wilko name may live on but job losses are inevitable
An update on the future of Wilko, the collapsed discount and variety retailer, is expected imminently from its administrators PwC.
The former family-owned company went into administration two weeks ago – making it the third biggest casualty in the retail sector during recent years after Sir Philip Green’s Arcadia empire and the department store chain Debenhams.
Sky News revealed a week ago that PwC had given prospective buyers until last Wednesday to submit initial offers for some or all of the business.
It is now working through those offers.
Wilko’s 12,500 employees were given some cause for optimism when, on Friday afternoon, the GMB union said that, after meeting with administrators, there were “genuine grounds for hope”.
The union’s national secretary, Andy Prendergast, said there had been “expressions of interest from organisations who are considering taking over at least some parts of the business.”
Among those who have been linked with a potential acquisition of former Wilko assets are its chief rivals, including the FTSE-100-listed B&M; Poundland, which is owned by Warsaw-listed Pepco Group; and The Range and Home Bargains, both of which are privately owned.
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What happened to Wilko?
Sky News has also revealed that, prior to its collapse, Wilko also held talks with the private equity firms Gordon Brothers, which owns Laura Ashley; OpCapita, whose assets include the Football Pools and Alteri, which owns Bensons for Beds.
They may also be interested in parts of the business.
Yet it is far from clear whether any buyer would want the entire Wilko business which, at the time of its collapse, operated some 400 stores.
Wilko had, prior to its demise, been seeking rent cuts at a number of its stores – a significant number of which were not trading profitably.
Industry speculation is that, at best, buyers will be found for between 200-300 outlets.
The Wilko store at Wood Green Shopping City, north London
Reports at the weekend suggested that would-be buyers have submitted offers for between 40-50 stores but that one potential buyer has offered to retain as many as 300 outlets.
That means some redundancies are inevitable.
There is, though, some residual value in some of the sites. The data analytics and consultancy group Global Data has reported that the UK discount and variety retail sector is set to grow by 5% per year during the next five years to more than £57bn in total.
Therefore, even though the market is intensely competitive, it will be worth competitors acquiring some Wilko sites.
That was certainly the case when, in 2008, Woolworths collapsed. Nearly a quarter of the old household favourite’s 800 or so former stores were acquired by the very names now being linked with acquisitions of some or all of Wilko – Poundland and B&M – although, two years after the failure of Woolies, some 300 stores had yet to be bought and remained unused.
Poundland acquired 57 former Woolworths stores, 47 were bought by the 99p Stores chain (which was bought by Poundland in September 2015), B&M picked up 43 while Poundstretcher acquired 22.
Woolworths collapsed in 2008
As with Woolies, some former Wilko stores may also end up in time being acquired by supermarkets. Iceland was the biggest single buyer of former Woolworths stores, picking up 59 of them, while other sites vacated by Woolworths were acquired by Tesco, Sainsbury’s and Waitrose.
Buyers, though, will be discriminating in the former Wilko outlets that they take on.
Clive Black, retail analyst at investment bank Shore Capital and widely regarded as one of the industry’s best sector-watchers, told clients last week: “One significant factor contributing to Wilko’s collapse is the location of its stores, primarily situated in high streets and shopping centres. These areas have experienced a notable decrease in footfall, reportedly around 30% lower, compared with levels before the pandemic.”
Mr Black said that made a bid for the entire Wilko estate unfeasible.
He added: “It might be more plausible for B&M to concentrate on acquiring stores located in out-of-town retail parks. These locations tend to be less affected by the structural decline in foot traffic seen in town centres and secondary malls.”
It also seems possible that the Wilko brand itself will attract interest. The trade publication Marketing Week last week highlighted evidence from YouGov’s BrandIndex platform which suggests that, even after going in to administration, Wilko’s overall ‘brand health’ – a measure of how it is perceived by consumers – is stronger than the retail sector as a whole and significantly ahead of Home Bargains, B&M and Poundland.
Marketing Week reported: “In the past year, Wilko has also consistently outperformed these rival retailers on both quality and value perceptions…Wilko is perceived as being much better quality than B&M, Home Bargains and Poundland.”
That means the brand may live on. The Sun reported at the weekend that one of the potential bidders speaking with PwC has expressed an interest in retaining the Wilko name. It is likely that this would be for the purposes of retaining an online presence. Brands such as Topshop – previously owned by Arcadia – and Debenhams both live on as online-only brands.
But Wilko may yet retain a physical presence, too. A template here could be Paperchase, whose brand name and intellectual property was acquired in January after it collapsed into administration by Tesco.
So there are plenty of possibilities for some of Wilko’s assets – which is why speculation has begun to circulate that it may not until some time next week before PwC can provide an update.
What is certain, though, is that Wilko will not continue in the form in which it did prior to its collapse.
Europe’s largest airline has seen annual earnings drop by 16% after cutting air fares – but revealed a price hike as it seeks to return to growth.
Ryanair reported profits after tax fell to €1.61bn (£1.35bn) for the year to 31 March, down from €1.92bn (£1.61bn) in 2024, still the second highest on record.
On average, plane tickets were 7% cheaper during this period than the 12 months before, it said.
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There had been a 21% rise in fares in the year up to March 2024, which bosses had signalled was due to end.
Higher-for-longer interest rates and inflation in the first half of the year meant ticket prices had to come down, the budget carrier said.
But fares are already back on the rise, Ryanair’s chief executive Michael O’Leary said.
The airline “cautiously” expects to recover “most, but not all” of the fare decline, which he said will boost profits.
Demand for summer flights is “strong”, Mr O’Leary said, with peak fares “modestly” ahead of last year.
In recent months, that rebound has already been under way. Fares since April are on track to be “a mid-high teen per cent ahead” by the end of next month, compared with the same period last year.
That trend is expected to continue to July, August and September, Mr O’Leary said.
“While we cautiously expect to recover most, but not all of last year’s 7% fare decline, which should lead to reasonable net profit growth in 2025-26, it is far too early to provide any meaningful guidance,” he said.
“The final 2025-26 outcome remains heavily exposed to adverse external developments, including the risk of tariff wars, macro-economic shocks, conflict escalation in Ukraine and the Middle East and European air traffic control mismanagement/short staffing.”
Read more from Sky News:
UK and EU agree ‘Brexit reset’ trade deal
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Passenger numbers grew to a record 200 million on the back of cheaper fares, hitting a target that had been reduced due to delays in delivering new Boeing planes.
The US manufacturer has struggled with increased regulatory oversight after a door panel blew off an Alaska Airlines plane mid-flight in January last year. Strike action by staff had added to the delays.
The forecast for passenger numbers has been reduced again. Ryanair now aims to transport 206 million passengers in this financial year.
It hopes to reach 300 million passengers by 2034 and on Monday said it still expects to receive 300 new Boeing planes by 2033.
The UK and the EU have agreed a new post-Brexit “reset” trade deal after months of negotiations.
A UK government source said: “All in all, a good deal for all.”
The talks were the first since Boris Johnson agreed the initial Brexit deal in January 2020, when the UK left the EU.
Politics latest: Details of UK-EU deal emerge
Talks went “down to the wire”, with a breakthrough at about 10.30pm on Sunday ahead of a Monday 10am deadline, as UK fishing rights were, yet again, a major sticking point negotiators had to work through.
Sky News understands the EU wanted permanent access to UK waters for fishing, but they have agreed to access for 12 years.
There will be no change to the current access for UK fishing communities, with no reduction in British quotas or increase in the amount the EU is allowed to catch.
Fishing rights were a major part of the Brexit “leave” campaign, although fishing only accounts for 0.4% of GDP.
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UK-EU reset deal done
Details are expected later today on defence and security, which could feature an agreement allowing British firms access to a £125 billion EU defence.
The two sides were also looking at deals allowing British travellers to use e-gates at European airports and cutting red tape on food exports and animal/plant health for trade.
Sky News understands talks are continuing on a youth mobility scheme to allow people aged 18-30 in the UK and the EU to move freely between countries for a limited period of time.
Sir Keir Starmer promised in his 2024 election manifesto he would sign a new trade and security deal with the EU, and has embarked on a charm offensive across Europe since winning power.
Chancellor Rachel Reeves told a meeting of business leaders it had “not been easy” to reach a deal but said it would “make it easier” for UK businesses.
EU relations minister Nick Thomas Symonds said it was a “historic day”.
“Good for jobs, good for bills, good for borders,” he posted on X.
“And more…Britain back on the world stage, with a government in the service of working people.”
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Conservative leader Kemi Badenoch called the deal “very concerning” and said 12 years EU access for fishing is three times longer than the government wanted.
“We’re becoming a rule-taker from Brussels once again,” she said.
“And with no details on any cap or time limits on youth mobility, fears of free movement returning will only increase.”
Fishing was a major sticking point in the talks. Pic: PA
Reform UK leader and Brexiteer Nigel Farage described the deal as a “surrender”.
Business Secretary Jonathan Reynolds told Sky News details were still being worked out just three hours before the deadline.
With just over an hour to go before the 10am deadline, the EU ambassadors’ committee approved the deal, ahead of a summit with EU leaders in London this morning.
A news conference to announce the details of the deal is set for later.
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Negotiations to reset the UK’s post-Brexit relationship with the EU are going “to the wire”, a Cabinet Office minister has said.
“There is no final deal as yet. We are in the very final hours,” the UK’s lead negotiator Nick Thomas-Symonds told Sky’s Sunday Morning with Trevor Phillips.
On the possibility of a youth mobility scheme with the EU, he insisted “nothing is agreed until everything is”.
“We would be open to a smart, controlled youth mobility scheme,” he said. “But I should set out, we will not return to freedom of movement.”
Politics latest: PM outlines ‘benefits’ for UK from closer EU ties
The government is set to host EU leaders in London on Monday.
Put to the minister that the government could not guarantee there will be a deal by tomorrow afternoon, Mr Thomas-Symonds said: “Nobody can guarantee anything when you have two parties in a negotiation.”
But the minister said he remained “confident” a deal could be reached “that makes our borders more secure, is good for jobs and growth, and brings people’s household bills down”.
“That is what is in our national interest and that’s what we will continue to do over these final hours,” he said.
“We have certainly been taking what I have called a ruthlessly pragmatic approach.”
On agricultural products, food and drink, Mr Thomas-Symonds said supermarkets were crying out for a deal because the status quo “isn’t working”, with “lorries stuck for 16 hours and food rotting” and producers and farmers unable to export goods because of the amount of “red tape”.
Asked how much people could expect to save on shopping as a result of the deal the government was hoping to negotiate, the minister was unable to give a figure.
Read more:
What could a UK-EU reset look like?
Starmer’s stance on immigration criticised
On the issue of fishing, asked if a deal would mean allowing French boats into British waters, the minister said the Brexit deal which reduced EU fishing in UK waters by a quarter over five years comes to an end next year.
He said the objectives now included “an overall deal in the interest of our fishers, easier access to markets to sell our fish and looking after our oceans”.
Turning to borders, the minister was asked if people would be able to move through queues at airports faster.
Again, he could not give a definitive answer, but said it was “certainly something we have been pushing with the EU… we want British people who are going on holiday to be able to go and enjoy their holiday, and not be stuck in queues”.
PM opens door to EU youth mobility scheme
A deal granting the UK access to a major EU defence fund could be on the table, according to reports – and Prime Minister Sir Keir Starmer has appeared to signal a youth mobility deal could be possible, telling The Times that while freedom of movement is a “red line”, youth mobility does not come under this.
The European Commission has proposed opening negotiations with the UK on an agreement to facilitate youth mobility between the EU and the UK. The scheme would allow both UK and EU citizens aged between 18 and 30 years old to stay for up to four years in a country of their choosing.
Earlier this month, Home Secretary Yvette Cooper told Phillips a youth mobility scheme was not the approach the government wanted to take to bring net migration down.
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Lack of UK training ‘big driver of net migration’
When this was put to him, Mr Thomas-Symonds insisted any deal on a youth mobility scheme with Europe will have to be “smart” and “controlled” and will be “consistent” with the government’s immigration policy.
Asked what the government had got in return for a youth mobility scheme – now there had been a change in approach – the minister said: “It is about an overall balanced package that works for Britain. The government is 100% behind the objective of getting net migration down.”
Phillips said more than a million young people came to the country between 2004 and 2015. “If there isn’t a cap – that’s what we are talking about,” he said.
The minister insisted such a scheme would be “controlled” – but refused to say whether there would be a cap.
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‘It’s going to be a bad deal’
Shadow cabinet office minister Alex Burghart told Phillips an uncapped youth mobility scheme with the EU would lead to “much higher immigration”, adding: “It sounds very much as though it’s going to be a bad deal.”
Asked if the Conservatives would scrap any EU deal, he said: “It depends what the deal is, Trevor. And we still, even at this late stage, we don’t know.
“The government can’t tell us whether everyone will be able to come. They can’t tell us how old the young person is. They can’t tell us what benefits they would get.
“So I think when people hear about a youth mobility scheme, they think about an 18-year-old coming over working at a bar. But actually we may well be looking at a scheme which allows 30-year-olds to come over and have access to the NHS on day one, to claim benefits on day one, to bring their extended families.”
He added: “So there are obviously very considerable disadvantages to the UK if this deal is done in the wrong way.”
Jose Manuel Barroso, former EU Commission president, told Phillips it “makes sense” for a stronger relationship to exist between the European Union and the UK, adding: “We are stronger together.”
He said he understood fishing and youth mobility are the key sticking points for a UK-EU deal.
“Frankly, what is at stake… is much more important than those specific issues,” he said.
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