Wilko had 93 years of trading history and 400 stores. Here's what the collapse actually teaches small businesses.

The background

Wilko was a family-owned business throughout its history, controlled by the Wilkinson family. Unlike publicly listed retailers, it had no external shareholders demanding transparency or accountability. This is not inherently a problem — many excellent businesses are family-owned — but it meant there was less external pressure to confront difficult truths. The business had been profitable for most of its history, but from around 2019 onwards it faced rising costs, the shift to online retail, increased competition from discount retailers (particularly Poundland and B&M), and the disruption of the pandemic.

What the public accounts showed

Wilko's financial position was deteriorating significantly in the years before the collapse. The company's accounts — filed at Companies House and publicly available — showed declining margins, rising debt and a cash position that was becoming increasingly tight. These were not hidden figures. The Business and Trade Select Committee launched an inquiry into the collapse in 2023. The committee's published report and evidence sessions examined the company's financial history, the dividend payments made to the family, and the decisions made in the final years of trading. The committee heard evidence that significant dividends had been paid to the Wilkinson family in the years before administration — the precise figures were contested in evidence, and readers should refer to the committee's published report for the verified record.

What happened

In early 2023, Wilko approached lenders for additional financing and began exploring a Company Voluntary Arrangement (CVA) — a formal process that allows a business to restructure its debts while continuing to trade. The CVA was rejected by creditors. By July 2023, PwC had been appointed as administrator. PwC was unable to find a buyer for the business as a going concern. The brand and some intellectual property were eventually sold to The Range, but the stores, the jobs and the supplier relationships were gone.

The patterns that stand out

Margin compression over several years. Wilko's gross margins had been declining for some time before the collapse. In a retail business, margin compression is a slow emergency — it doesn't feel urgent until it suddenly is. The appropriate response is to cut costs, raise prices, or change the product mix. The public record suggests the response was insufficient and too slow.

Debt used to cover operational shortfalls. Borrowing to invest in growth is a legitimate business strategy. Borrowing to cover operational shortfalls is a sign that the underlying business model isn't working. By the time Wilko was seeking emergency financing in 2023, it was in the second category.

A competitive landscape that changed faster than the response. B&M and Poundland had been taking market share from Wilko for years. Both operated with lower cost bases and more flexible store formats. Wilko's response — broadly, to continue doing what it had always done — wasn't enough.

What we'd do differently

Act on margin compression early. A 1% decline in gross margin sounds small. Across £1.2 billion of revenue, it's £12 million. Across five years, it's the difference between a viable business and an unviable one. Don't confuse 'we've always done it this way' with 'this is the right way to do it.' Treat your accounts as a management tool, not a compliance exercise — the information that would have prompted earlier action was in the public accounts.