The retail chain Wilko, founded by James Kempsey Wilkinson, faces collapse amid criticism of its management under Lisa Wilkinson, his granddaughter.
The chain’s downfall is attributed to a departure from its successful low-price strategy.
Former CEO Gordon Brown, who led Wilko for 15 years, expressed concern that the company moved away from its proven model of offering affordability.
According to Brown, Wilko was initially recognized as a go-to convenience store for cost-effective household items.
However, the chain’s approach changed after consultants were brought in to revamp its stores.
The result was a shift away from aggressive pricing and a change in the store’s atmosphere.
Lisa Wilkinson, who took over the business in 2014, bought a majority stake from her cousin Karin Swann.
This transition coincided with a series of dividends paid out to owners and former shareholders, totaling £77 million over a decade.
The dividends have sparked controversy, particularly in light of the company’s dire financial situation, with 12,000 employees facing unemployment and a £50 million deficit in the pension fund.
Union leaders, including GMB’s national secretary Andy Prendergast, criticized the management’s decisions, highlighting the impact on employees and questioning the accountability of the company’s leaders.
Lisa Wilkinson defended the substantial payouts, pointing to the company’s assets valued at £100 million and a healthy bank balance of £58 million at the time.
She stressed that proper governance and auditing processes were followed before approving these payments.
While acknowledging that not taking dividends might have prolonged the company’s survival, she argued that the outcome would have likely been similar in the end.
Nadine Houghton, representing the GMB union, called on Wilkinson to contribute from her personal wealth to support workers’ pension funds.
However, Wilkinson’s husband, Chris Phillips, declined to comment on the matter when approached at their residence.
Amid the turmoil, the fate of Wilko’s employees hangs in the balance.
The company’s administrator, PwC, has struggled to secure a deal for all 400 Wilko stores.
Various potential bidders, including billionaire brothers Simon, Bobby, and Robin Arora of B&M, are being considered.
HMV tycoon Doug Putman emerged as a likely savior with a multi-million-pound rescue offer, aiming to retain around 200 stores and thousands of staff members.
Wilko’s downfall reflects a significant shift from its origins as a single hardware store in Leicester in 1930.
The company’s expansion and brand evolution continued until its recent struggles.
The story of Wilko’s collapse serves as a cautionary tale about the delicate balance between maintaining business strategy and addressing financial pressures.
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