Wilko shakes up rent payments as it eyes cashflow ahead of Christmas
High street giant Wilko is shaking up its rent payments schedule in a bid to conserve cash in the run up to Christmas.
The garden and home retailer told landlords that it would now unilaterally pay its quarterly rent bill in monthly instalments to manage the firm’s cashflow: heralding a difficult time moving forward for the high street.
“Trading is tough for everybody … we’re having to make smart choices,” Wilko chief executive Jerome Saint-Marc told The Sunday Times. “We’re confident in our financial stability and have strong plans for the future. No covenants have been breached on our current facility.”
In the year to January 2021, Wilko reported pre-tax profits of £4.4m on sales of £1.36bn.
Although the firm was deemed an essential shop during the pandemic, allowing stores to stay open throughout Covid, the company has struggled against supply-chain woes and high freight costs.
It is understood that the family-owned company is working with Interpath Advisory on a refinancing deal of its £37.5m revolving credit facility, with sources telling The Sunday Times that an agreement with lenders was close.
Wilko revealed in January that it was planning to close 15 stores in the coming year. These included sites in Shipley, Bournemouth and Sutton Coldfield.
While Wilko said the move was part of a review prompted by a number of leases coming to an end, it was still criticised by unions at the time.
“These closures are devastating for Wilko workers and the communities who use them,” GMB national officer Roger Jenkins said in January.
“It’s yet another nail in the High Street’s coffin and GMB calls on councils and landlords to review commercial leases and offer lower rents.”
Eight stores have already been closed this year.
The firm was founded by James Kemsey Wilkinson in 1930 and has gown from one site in Leicester to around 400 stores across the country today.
The company notably rebranded from Wilkinson to Wilko in 2014 as it moved full speed ahead with a multichannel restructuring and introduced click-and-collect in stores