Wilko landlords could face no rent for three years under CVA
The Times said the discount chain is seeking rent cuts on up to 250 of its 400 shops, with some landlords set to receive no rent for three years
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Some landlords of Wilko stores could reportedly receive no rent for three years, as the chain looks to make drastic cost cuts ahead of a restructuring vote.
According to the Sunday Times, it comes as Wilko is looking to slash its rent bill as part of its CVA which is set to launch next month.
The Times said the discount chain is seeking rent cuts on up to 250 of its 400 shops, with some landlords set to receive no rent until, under the terms of the CVA, the rent reverts to the contractual amount after three years.
It added that stores on high streets and in shopping centres would be “hit harder” than those in retail parks.
Commenting on the group’s turnaround plan, Mark Jackson, Wilko CEO, said: “We announced the start of our turnaround programme to drive wilko forward in January, complete with a new streamlined senior team and a strategic plan to first stabilise the business and then implement a growth strategy.
“We’re in the early stages of accelerating the turnaround plan and as is usual, the directors continue to explore all options for wilko’s long-term future. Over the last four months, solid progress has been made across cost reduction and digital transformation, where in both areas, the business is ahead of its plan.”
He added: “We have no plans to close stores and are confident with the right actions, we’ll continue to be a key feature on the British high street and continue to expand our omnichannel offer, providing customers a place to shop all their household and garden needs.”
Last week, it was reported that Wilko appointed property advisers ahead of crunch talks with landlords as the group looks to cut rents across its estate. According to Sky News, the group drafted in property agent CBRE ahead of formal negotiations with shop owners.
A source told Sky that Wilko was “unlikely” to permanently close a substantial number of its stores as part of the CVA, with the restructuring set to focus on rent reductions instead.
Reports of the CVA first emerged last month, with Bloomberg reporting that the struggling discount chain reached out to PwC to explore its restructuring options.
This has followed efforts by the retailer to cut costs across its stores in recent months, including cutting over 400 roles at the start of the year.
