Wilko, the value-orientated chain that has been impacted by the cost-of-living crisis, soaring inflation, and supply chain disruption, has confirmed plans to unlock £48m for business investment as part of a 15-year agreement with logistics specialist DHL.
The refinance, made possible by the sale & leaseback of its Nottinghamshire distribution centre, is said to be the first of a series of partnership benefits that will allow the retailer to improve the proposition and the customer experience across its 402 stores and online.
While day-to-day operations will remain unchanged, Wilko stated that the partnership with DHL will mean both businesses will benefit from scale in property and warehousing. Wilko also noted that it will be able to concentrate its efforts on “supplying hard-working families with great value products”.
Jerome Saint-Marc, Wilko’s CEO, said: “It’s standard business practice to constantly review how we manage our finances. This property deal with DHL represents long-term stability for us and our team members and is the right response to the current market conditions and our priorities.
“We’re making smart choices to trade a business and allow us to continue to invest in our long-term transformational strategy.”
Last month, it was reported that Wilko had drafted in experts from advisory firm Teneo to examine potential cost-cutting and restructuring options to shore up its balance sheet.
NAM Implications:
- A good way out of Wilko’s current financial problems.
- However, they will now effectively pay rent as opposed to owning their distribution depot.
- Presumably, this rental rate is either locked or has an agreed progression…
- They will also be tied to DHL.
- All of this could make it more complicated for Wilko owners…
- …in the event of a sale of the business at some point.
- Meanwhile, this represents more stability for suppliers in uncertain times.
