August 28th 2023.
This month, Wilko, the discount retailer, fell into administration, putting 12,000 jobs at risk. The collapse has raised questions about the multi-million pound dividends that were paid out to owners in the run-up to the chain's demise.
Lisa Wilkinson, the former chair of Wilko and granddaughter of the company's founder, James Kempsey Wilkinson, has defended the payouts. She worked her way up the company for 20 years and was the chair until earlier this year.
In an interview with The Sunday Times, Ms Wilkinson said that there was no single 'seismic' thing that caused the collapse, but rather a series of smaller issues that added up to the current situation. She also said that the board had run the appropriate checks before taking out the dividends, and that the amount taken out would not have made a difference in the long-term.
The dividends, which reportedly totaled £77 million over the past decade, have been the subject of much criticism. This includes a £63 million payout in 2015, when part of the founding family sold their shares to the other. Last year, even with an annual loss of £39 million, £3 million was taken out in dividends.
Nadine Houghton of the GMB Union, which represents Wilko's staff, said: "The business could have thrived under strong market conditions for bargain retailers - but with owners prioritising their own dividends, it has been left to go under."
PwC, the firm brought in to administrate Wilko, have been struggling to find a buyer for the chain's 400 branches. However, M2 Capital, an Anglo-Canadian firm specialising in rescuing businesses, has made a last-minute offer of £90 million. Unless another potential buyer steps in, the business will be broken up and sold piecemeal to competitors.
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