Discount retailer set to grow to 1,200 outlets, Wilko will return, and The Works cuts profit guidance
Discount retailer B&M will soon have more stores for its greeting cards and stationery offer – which PG Buzz understands is supplied by IG Design Group – as the agreement to acquire 51 ex-Wilko shops is underpinning the company’s opening programme.
Chief executive Alex Russo revealed the news this week, adding: “Over the next three years we expect to open not less than 125 new B&M stores in the UK, adding up to 20% to our sales area,” taking expectations to at least 1,200, significantly above the previous guidance of 950 in 2017.
The news came this week as B&M raised its full-year profit guidance to between £620m and £630m in 2024, compared to £573m in 2023, after posting a 16.1% rise in first half core earnings, on the back of strong trading momentum.
For the six months to 23 September, the retailer saw group revenue rise 10.4% to £2.549bn on the year prior, driven by an increase in customer transactions, and pre-tax profits hit £222m, up from £201m the previous year.
Meanwhile, standalone Wilko stores are set to return to the High Street and retailer parks before the end of the year as new owner CDS Superstores, which also owns The Range, said it was preparing a national roll-out of the brand across Northern Ireland for the first time, along with England, Scotland, and Wales.
When the discount chain collapsed into administration in September, CDS acquired the brand and intellectual property in a £5m deal, and now plans to unveil five new concept locations before Christmas, including in Plymouth and Exeter, ahead of the rest of the store openings across 2024.
The parent company has already relaunched the Wilko website – including stationery, party, giftwrap, calendars and diaries but not greeting cards which also used to be largely supplied by IG Design Group – and introduced the brand’s products to The Range’s 200 stores.
CDS Superstores’ chief executive Alex Simpkin told Retail Gazette: “The public reaction to the loss of Wilko stores was undeniable. It’s clear that there’s a huge love for Wilko and we’ve seen an encouraging demand for the return of its own-brand products.
“That’s why we’ve taken the decision to reintroduce Wilko back to many of the High Streets and communities that it used to so proudly serve.”
Meanwhile, stationery, craft, toy and book discount retailer The Works has dropped its profit guidance by £4m as it warned of challenging and uncertain market conditions, citing high inflation and low consumer confidence.
In the half-year trading update to 29 October chief executive Gavin Peck said: “The first half of the year has been challenging for the retail sector as cost-of-living pressures continued to weigh on households. We have focused on delivering excellent value for our customers, adapting as best we can to the tough trading conditions, and I am proud of the way our colleagues have rallied together and responded.
“Consumer sentiment softened towards the end of the period, which resulted in early discounting across the sector and increased uncertainty as we head into the Christmas period.
“Recognising the competitiveness of the market we have responded with more promotional activity, which we expect to continue as we approach Christmas. Families will want to celebrate Christmas affordably and our value proposition makes us an ideal choice for them.”
The report, released yesterday, 9 November, showed that in the first half of FY24, the retailer delivered total sales growth of 3.4% while total like-for-like sales rose 1.6%, store l-f-l sales also increased by 3.5%, but online sales slipped 12.2%.
The company has changed its prediction for the full-year earnings in 2024 and is now anticipating pre-IFRS 16 adjusted EBITDA to be around £6m instead of £10m.