The former owner of Wilko does not expect to address the discount retailer’s estimated £70.2 million pension shortfall following its collapse.
Amalgamated Holdings Wilkinson Limited (AHWL) is owned by the founding family. It stated in new documents its directors, including the retailer’s former chair Lisa Wilkinson, “do not believe there is a liability for AHWL in respect to any pension deficit arising” after taking legal advice.
The UK pensions regulator has been considering action against Wilko after it collapsed with a substantial pension shortfall last August. The retailer paid out £77 million in dividends to investors during the decade before its demise, although AHWL said it had not paid dividends itself.
AHWL was originally set up as the management vehicle for the owners of Wilko and its subsidiaries.
This means its principal activity was to “develop and manage a diversified portfolio of business investments”. The pensions watchdog has the power to pursue owners to cover pension gaps if their actions have put savings at risk.
In the documents, AHWL directors said:
“They have received no indication of an actual or potential claim arising from the process to date.”
They acknowledged the regulator’s powers were “extensive”. However, they cited several reasons why they believed they were not liable. This included that AHWL “has never been the sponsoring employer for the Wilko pension scheme” and “when periodically asked about dividends, as a shareholder, the directors…expressed a view that pension contributions be prioritized over dividends”.
The UK pensions regulator has been considering action against Wilko after it collapsed with a substantial pension shortfall last August
AHWL added its directors believed the scheme was “appropriately and properly funded.” This was especially after the retailer was given security over £20 million of Wilko property.
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Wilko plunged into administration in August last year after several months of teetering on the brink.
The value retailer, which started as a hardware store in Leicester in the 1930s, fell behind as rival chains, including B&M, Poundland, and The Range, found success amid the cost-of-living crisis. Those competitors acquired its assets, with B&M and Poundland acquiring a tranche of stores and The Range buying the Wilko brand.
The Range has since reopened Wilko-branded stores, and its owner, Chris Dawson, said in December that he planned to open up to 40 Wilko stores over the next year.
The Pension Protection Fund could bail out the Wilko pension scheme. It said the scheme “remains in assessment” and that it was “working closely with the scheme trustees to ensure the best outcome for members”.
The pension regulator said it has engaged with “Wilko, the pension trustees, the administrators, and the PPF to make sure members’ benefits are protected.”
