Wilko profits decline to £5.5m

It has been reported that value retailer Wilko has suffered a decline in profits in the year to January, reaching just £5.5 million compared with £27.5 million the year before.

It hadn’t so much as dipped a toe in television’s waters before, so when Wilko finally took the plunge with its first national advertising campaign, it dived in, fancy dress an’ all. A crew of pirates, four days filming on board an authentic ship in Croatia, more location work in glamorous Bexleyheath and . . . nothing. No pick-up in sales, no booty, no treasure. Instead, the hardware chain suffered a “very disappointing” year as profits plunged.

In accounts filed at Companies House, the Nottinghamshire-based home and garden retailer revealed profits of £5.5 million for the 12 months to January, after £27.5 million for the year before. Sales were down by 1.2 per cent to £1.4 billion.

The company, which re-branded from Wilkinson to Wilko a year ago, admitted that its investment in adverts featuring pirates shopping for curtains had not paid off.

“We entered the year with an air of optimism as we planned to screen our first TV campaign over Easter 2014,” Ian Ellis, finance director, said in a strategic report. “Disappointingly, this did not deliver the anticipated increase in number of customers visiting our shops during the year and overall we have continued to lose market share.”

Wilko blamed its difficulties on price cuts by supermarkets and by discount chains such as Aldi and Lidl. It said: “We have seen the effect of this in those categories where we compete with the grocers such as household cleaning.”

In an unusually frank assessment of its progress, Wilko said its costs to fulfil online orders were still “far too high” and that it had made a “difficult decision” by cutting jobs at its Worksop head office.

Nevertheless, the company, which has more than 370 outlets, intends to open 14 stores in 2015 and refurbish a further 75 outlets. A spokesman for the chain said that trading had improved since Christmas, with the festive season and January proving successful.

A further television campaign has been postponed.

Source : Andrew Clark - The Times
www.thetimes.co.uk