Former Wilko boss says she’s ‘devastated’ under MP scrutiny
MPs sitting on the Business and Trade Committee have heard that the former boss of collapsed budget retailer Wilko is “devastated” after her company dramatically failed earlier this year, with the loss of thousands of jobs
The committee questioned former chair of Wilko Lisa Wilkinson about the potential role of her actions in the downfall of the company, suggesting a connection to personal greed.
In response, Wilkinson highlighted various challenges the company had encountered, such as high rents, the decline of the high street, and the rising cost of living, deflecting any responsibility for the company’s demise.
She then went on to express remorse, as she admitted to letting down both staff and customers, saying, “I am devastated.”
However, it took prompting for her to formally apologise.
Wilko entered administration in August, resulting in the closure of 400 stores and the loss of over 12,000 jobs.
Union national officer Nadine Houghton asserted to the committee that the retailer’s downfall was attributed to weak leadership, a lack of accountability, and the company’s failure to meet market demands.
Houghton emphasised that being a family-run business, Wilko should have prioritised the well-being of its employees, treating them as part of a “family.”
Employees were reportedly blindsided by the collapse, as the company consistently conveyed a message of strength and a commitment to enforcing a strategic plan, the committee heard.
Wilko had been advised to pursue a Company Voluntary Arrangement (CVA) to reduce rents, which were reportedly 4% above market rates.
Responding to this, Wilkinson defended the company’s decision not to furlough employees during the COVID-19 pandemic, insisting that operations remained as normal as possible. However, Mark Jackson, who assumed the role of CEO in Christmas 2022, argued that Wilko’s significant error was not furloughing staff and reducing rents during the pandemic.
Further scrutiny revealed that over £77m in dividends had been distributed from the company in the past decade, with Wilkinson utilising some of these dividends for angel investments.
The committee also pointed out that the company’s downfall left taxpayers providing £40m in financial support for those who lost their jobs.
The pension fund now faces a £50m deficit, and estimates from PwC indicated that unsecured creditors, including suppliers, employees, and the pension fund, might receive as little as 4% of what they are owed by Wilko Ltd.
Atul Shah, a professor of accounting and finance at City University, highlighted PwC’s annual audit reports from 2019, indicating a mixed evaluation of the company’s financial health.
The reports suggested that the director’s cash flow predictions played a role in alleviating concerns about Wilko’s status as a going concern.