Questions have been raised about a controversial ‘fire sale’ property deal that appears to show Wilko missed out on up to £40million as the stricken retail chain desperately tried to stay afloat.
The budget retailer called in administrators this month – putting 12,000 jobs at risk – after failing to secure a financial lifeline.
Potential bidders for some or all of Wilko’s 400 stores are thought to include discount rivals B&M, Poundland and The Range.
Wilko called in administrators this month – putting 12,000 jobs at risk
The founding Wilkinson family has been criticised for taking dividends out of the company when it was making a loss and for not repairing a pension fund hole as it headed for the rocks.
The Mail on Sunday can now reveal that Wilko’s flagship depot was sold in a controversial sale and leaseback deal.
The huge 1.1million sq ft site at Manton Wood in Worksop, Nottinghamshire, was sold to logistics giant DHL last November for £48million. At the time Wilko said the deal would help its ‘long term stability’ and boost investment.
But just two months later DHL, which is one fifth-owned by the German government, sold the property for £88million to Canadian private equity firm Brookfield Asset Management, whose chairman is former Bank of England Governor Mark Carney.
Lord Mann, who as Labour MP for Bassetlaw, which includes Worksop, chaired the Treasury Select Committee, said: ‘That’s too big a change in value over such a short period.’
Gordon Brown, Wilkinson’s managing director from 1992 to 2007, said the sale of Manton Wood for £48million was ‘surprising’ as it cost £35million to build in 1994 and was expanded in the early 2000s. ‘I would have thought it would be worth more,’ he added.
The potential £40million that Wilko missed out on is identical to the sum it borrowed earlier this year from private equity firm Hilco.
A well-placed source said the Wilko deal was a ‘fire sale’, adding: ‘They needed cash desperately.’
The revelations come after The Mail on Sunday established that £77million had been taken out of the business in dividends in the last decade, including in years when the 93-year-old chain – owned by the descendants of founder James Kempsey Wilkinson – made a loss.
The biggest payout was a £63million bonanza when one side of the family sold to the other, leaving Lisa Wilkinson, a granddaughter of the founder, as chairman.
She quit in January after Wilko said it might run out of cash.
‘Wilko’s collapse is a tragic tale of woeful management errors,’ said Nadine Houghton, of the GMB union, which represents 1,800 workers at the hub. ‘Selling a valuable distribution centre for at least £40million less than it was worth is yet another top brass blunder.’
Lord Mann accused the family of ‘greed [while] waiting for the whole thing to collapse’.
He said: ‘It looks as though they were cashing out.’
DHL is understood to have leased the depot from Brookfield for 15 years for a rent of £84million in a deal underwritten by DHL’s German parent company, Deutsche Post.
AHWL, the management company for the remaining family owners after the split, said it started a ‘thorough’ sale process early last year.
The subsequent £40million uplift in value ‘was not in the property but the rent’, it said. Dividends received were invested in property and UK businesses, AHWL added.
