Fingers have been pointed in various directions over the collapse of budget retailer Wilko, as the chain’s former chief executive and chair faced questions from ministers on Tuesday.
Speaking during a business and trade committee hearing on Tuesday, chair Lisa Wilkinson said a rapid increase in interest in the wake of last year’s mini-budget had been a factor.
“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.”
MPs had written to Wilkinson, alongside partners from auditor EY and Wilko chief executive Mark Jackson last week calling for their attendance at Tuesday’s hearing.
Questions had been raised around a £50 million shortfall in Wilko’s pension fund, alongside some £9 million in dividends paid to its owners since 2019.
According to Wilkinson, this pension defecit now appeared larger due to different parametres for assessing the scheme since Wilko's collapse.
When quizzed himself on Tuesday, Jackson said he had pursued a rescue deal for several months prior to the collapse earlier this year but that poor economic conditions had meant that the investment community was not “overly keen” on lending.
Also pointing out he had only joined the business in December last year, Jackson highlighted high rental costs, alongside the fact that Wilko had not furloughed staff during the pandemic.
EY partner Victoria Venning argued that the auditor had expressed "material uncertainty" over Wilko's financial stability, but said it would have been "inappropriate" to offer any cost-cutting advice as an independent firm.
HMV boss Doug Pitman, who had been involved in the bidding process for Wilko, argued earlier on Tuesday that greed had been at play during the chain’s collapse, meanwhile.
Discussing his bid to rescue some 400 Wilko stores, alongside many of the 12,000 jobs associated, he said people had been “super inflexible” during negotiations.
He had wanted access to Wilko’s IT systems, he told the BBC, but had been unable to.
“The amount of money that the companies want to charge made the Wilko deal literally impossible,” he explained.
“One of the landlords where the servers were stored, I think the facility was a million square feet and the servers were in this tiny little room and they wanted rent on the whole million square feet for us to be able to keep the servers.
“So I would say everyone just got a little bit greedy and unfortunately weren't thinking about the 10,000-plus jobs that would have been saved.”