I’m ex-Wilko boss – here’s why popular discount store is going under with thousands of jobs at risk
A FORMER boss of struggling discount retail chain Wilko has revealed why the firm looks doomed with thousands of jobs at risk.
The collapsed company‘s ex-managing director has accused his successors of abandoning the approach that had helped it thrive.
Businessman Gordon Brown, in charge from 1992 to 2007, criticised recent leaders for moving away from Wilko‘s “successful model of low price, low cost”.
His criticisms came as reports suggested a major retailer was in “pole position” to buy Wilko, potentially saving half its 400 shops and 4,000 out of a total 12,500 jobs.
Wilko announced earlier this month the company was going into administration.
Discount retail rivals have reportedly been in talks about buying some of stores.
Pressure from low-cost competitors such as B&M, Poundland and Home Bargains has been highlighted among the factors behind Wilko’s demise.
Mr Brown has now suggested the company got complacent when it came to pricing.
He told the Mail On Sunday: “Wilko was a convenience store where you went to buy bits and pieces for your house for a low price.”
Mr Brown said of Wilko’s current management: “They paid consultants who helped them bring about a new format for stores.
“But they were less aggressive on pricing and their approach on the shop floor.”
Since 2014 Wilko has been run by Lisa Wilkinson, grand-daughter of the firm’s founder James Kempsey Wilkinson.
She bought a majority stake from her cousin Karin Swann, another of the founder’s grand-daughters.
The firm has been criticised for reportedly paying £77million to owners and former shareholders before its collapse.
The largest pay-out over the past decade was reportedly £63million in 2015 and share dividends of £3million were said to have been awarded last year despite Wilko’s annual losses of £39million.
Ms Wilkinson today defended their approach and insisted not paying the dividends would only have kept the firm trading “a couple of months longer”.
She told the Sunday Times: “The board checked that we’d got profits or reserved profits, there was sufficient cash, we went through the right governance, the auditors checked it off.
“What we have taken out really wouldn’t have made a difference.”
She also said “a whole load of things” had contributed to Wilko’s downfall.
She also thanked staff, saying the collapse of the 93-year-old company was “really bloody unfair on them”.
Wilko is no longer processing online deliveries, with shoppers restricted to click and collect orders instead.
The move into administration was announced after the retailer was unable to secure a rescue deal.
The Sun has revealed Poundstretcher wouldn’t be among those thinking of stepping in.
A full list has been provided of Wilko’s 400 stores threatened with closure.
It follows numerous other high street brands going into administration over the past year.
Wilko’s is the biggest British retail collapse since McColl’s went into administration in May last year.
But the cornershop chain was saved from closure after Morrisons stepped in and protected 16,000 jobs.
Paperchase went into administration in January this year, with all 106 stores of its stores since closing for good.
But Paperchase’s brand name and intellectual property were bought by Tesco.
Wellies retailer Joules and Scottish clothing brand M&Co went bust last year.
The M&Co brand name was purchased by Yours Clothing but its shops did not survive.
Meanwhile, B&M has been opening “bigger and better” stores this August bank holiday weekend after a series of earlier closures.
Other discount retailers plotting expansions include Poundland who 15 new stores across Britain while Poundstretcher has suggested adding another 50 shops by the end of this year.
There have also been reports TX Maxx is looking for new locations.