Wilko paid out £77m to owners before collapse

Wilko paid out a total of £77 million to the owners and former shareholders of the stricken retail chain in the decade before its collapse. The Mail on Sunday can reveal.

The chain, which fell into administration last week putting 12,000 jobs at risk, was controlled by descendants of the founder, James Kemsey Wilkinson. 

The biggest payout was a £63 million jackpot in 2015 when – after 85 years of running the business together – one side of the Wilkinson family sold their shares to the other.

Karin Swann, a granddaughter of founder James Kemsey Wilkinson, quit the board leaving her cousin Lisa Wilkinson as chairman. Swann’s husband Peter was until recently the owner of Scunthorpe United, now in the sixth tier of the football league after a series of relegations.

Analysis of Wilko’s accounts shows that multi-million pound dividends continued even as the company headed for the rocks.

Windfall: Analysis of Wilko’s accounts shows that multi-million pound dividends continued even as the company headed for the rocks

These included a £3 million dividend last year, which was paid despite Wilko racking up losses of £39 million. A total of £3.2 million was doled out in 2018 when Wilko slid to a £65 million loss.

Wilko’s failure has left the retirement fund with a multi-million pound shortfall and pensioners may end up with a reduced annual income for life. The scheme is likely to be bailed out by the Pension Protection Fund (PPF), the industry lifeboat. However, workers who have not yet retired could see their pensions reduced.

The dividend payouts were last night branded ‘a disgrace’.

Nadine Houghton, national officer at the GMB union, 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.’

The 93-year-old discount retailer called in administrators PwC last week after failing to secure a cash lifeline. Its 400 stores will continue to trade for now as talks with potential buyers continue.

Wilko’s final-salary pension scheme – which closed a decade ago – has almost 1,900 members, many of them retired. Despite Wilko raising its contributions to the scheme in recent years, it has a £16 million shortfall and may be heading for the PPF, which looks after the pension funds of more than 5,000 failed companies. 

The PPF promises to pay in full pensions that are already being drawn, but only around 90 per cent of payments due to members who had not retired when their employer went bust. The process of assessing whether a scheme can be taken on by the PPF can take up to two years.

‘No worker deserves this uncertainty about their job or their pension,’ Houghton added. ‘The pension scheme must be supported. There has to be a fair deal for workers.’

Wilko is known for selling an affordable range of DIY, garden and cosmetics products, but has been losing market share to other discount retailers such as B&M. It is one of the largest High Street collapses in recent years and follows the demise of household names including Debenhams, BHS, Topshop and Mothercare.

A spokesperson for AHWL, the management company for the remaining family owners after the split, said that family members personally had not received any dividends since 2017 when AHWL was formed. AHWL owned 99.7 per cent of Wilko up to its administration.

‘The dividends received have been invested in property and businesses in the UK, including over 20 high risk investments into young businesses as the family seek to help entrepreneurs have the success from business that they had over 90 years,’ he added

PwC declined to comment.