5th Sep 2023 13:35
(Alliance News) - B&M European Value Retail SA on Tuesday said it has entered an agreement with the joint administrators of the failed Wilko chain to buy 51 properties for up to GBP13.0 million.
With the variety goods value retailer making no secret of wanting to open more shops across the UK in the past, Hargreaves Lansdown's Susannah Streeter said the collapse of Wilko was B&M's gain.
"The soon-to-be vacant premises were easy picking for B&M and it is likely that the retailer has been ultra-choosy when it comes to cherry-picking locations. Part of B&M's successful model is its significant footprint in easy-to-access retail parks, so stores where it's easy to load up a car are likely to be in high numbers in the deal," Streeter said.
In August, Sky News reported that Wilko's administrator was in talks to divide up parts of the household goods and homewares seller's 400-store estate.
At the time, Sky News said that B&M was mulling taking on between 40 and 50 stores and Poundland-owner Pepco possibly acquiring around 100.
Orwa Mohamad, an analyst at Third Bridge, said the deal should help B&M reach its ambition to hit 950 stores. Further, B&M's general focus on out-of-town locations means it can incorporate many of Wilko's high street stores and locations with "limited cannibalisation impact."
"From an assortment perspective, there's a high degree of crossover between Wilko & B&M in households, garden, toys, accessories. Quite often, Wilko & B&M sell the same product, meaning consumers have a strong incentive to continue frequenting those stores regardless of the banner," the Third Bridge analyst said.
Shares in B&M were down 2.1% at 555.00 pence on Tuesday afternoon in London.
By Heather Rydings, Alliance News senior economics reporter
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