Pepco Group, the owner of the Poundland, Dealz and Pepco chains, has agreed with Wilko’s administrator PwC to take control of up to 71 of the failed retailer’s store leases.
The discount retail group stated that the sites were in desirable locations and would be converted to Poundland stores during the fourth quarter of this year if negotiations with landlords are successful, adding to its existing 800-plus estate.
Pepco added that it would prioritise hiring Wilko staff, who are facing redundancy after a rescue deal for a large part of the chain collapsed earlier this week.
PwC had already sold 51 Wilko sites to B&M for £13m but announced yesterday that all remaining stores will now be closed after it became clear that “no significant part of the Wilko operations can be rescued” in its current form.
However, the administrator confirmed yesterday that other retailers were still interested in the remaining Wilko sites and that it hoped to sell the Wilko brand and intellectual property “within the coming days”.
Poundland has prospered during the cost of living crisis and has been adding new categories such as clothing, homewares and chilled & frozen food to its stores over the last few years in an effort to offer an alternative to supermarkets.
Andy Bond, Executive Chairman of Pepco Group, commented: “The agreement to take control of a number of Wilko store leases will help to bring Poundland’s fantastic prices and offer to even more customers in the UK. It will be pleasing to offer employment to a number of Wilko’s colleagues – who will benefit from being part of a successful and fast-growing pan-European variety discount group.”
Poundland’s Managing Director Barry Williams added: “We recognise the last few weeks have been difficult for them [Wilko staff], and we will move quickly to secure new consents from landlords so we can offer them the certainty they deserve.”
In an interview with the BBC, Williams insisted that there is “plenty of life” left on the High Street, but it was down to discount retailers to “stay close” to customers and ensure that their offer matches up with what customers need.
The news of the Wilko deal came hours after the Pepco Group announced the unexpected resignation of its Chief Executive, Trevor Masters, with immediate effect. Bond, the group’s former CEO, will lead the overall management of the company until a permanent replacement is found.
The firm did not provide a reason for Masters’ departure, but it came alongside the lowering of the group’s earnings guidance following weaker-than-expected sales performance.
NAM Implications:
- The 71 prospects will yield at least 50 extra stores for Poundland.
- Pro-active suppliers will obviously adjust their Poundland strategies accordingly.
- Meanwhile, other Wilko rivals will no doubt be considering their options.
- Anticipate Wilko continuing as an online-only option to optimise what remains of the franchise…
