Liz Truss's mini-budget contributed to the collapse of Wilko, high street chain's former boss tells MPs
28 November 2023, 12:25
Liz Truss's mini-budget contributed to the collapse of Wilko, the high street chain's former boss has told MPs.
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Lisa Wilkinson, who was the chairwoman of Wilko before its collapse, also apologised to the thousands of people who lost their jobs when the retailer went bust.
Ms Wilkinson said there were a number of reasons for Wilko's failure, one of which was soaring interest rates after the mini-budget in autumn last year.
"We were about to enter into secured lending arrangements with Macquarie when the 2022 mini-budget happened," she said.
"Literally we were in the midst of that, and at that point the interest terms on that loan were hiked massively and that became infeasible. So, that was a contributor."
The mini-budget included £45bn of unfunded tax cuts, and was followed by a fall in the value of the pound and rising mortgage rates.
She soon sacked the then Chancellor Kwasi Kwarteng and then resigned to become the shortest serving prime minister of all time.
Read More: ‘Of course I am sorry’, former Wilko boss tells MPs
Read More: The exact dates and locations Wilko will be opening its first three concept stores
Wilko closed its doors to members of the public early in October, though its brand was bought by The Range.
It means The Range can use Wilko's name online or even in its own stores.
It came after the committee heard evidence from the GMB union that Wilko had told it of a "challenging trading position" as early as 2010.
"We've got correspondence between ourselves and Wilko where they identify a challenging trading position from about 2010," said GMB national officer Nadine Houghton.
"They identify that the discount retailers are an issue."
She said that, rather than leaning into that, the company tried to change its business model.
"What you see is a move away from this idea of Wilko as a discount retailer," Ms Houghton said.
She added: "The internal messaging to our members...was very much this attempt to move very much to almost a John Lewis-type model."
