Nov 19, 2014
B&M in talks with 6 UK retailers to buy stores
Nov 19, 2014
LONDON, United Kingdom - B&M European Value Retail, the fast growing British discount store chain that listed in June, is in talks with at least six major UK retailers to purchase stores from them, it said on Tuesday.
The firm, chaired by former Tesco boss Terry Leahy, also posted a 34 percent rise in first-half earnings and said it was on track to open at least a net 50 stores in its 2014-15 financial year.
"There are at least six retailers that are in active negotiations with us on right-sizing their estates," CEO Simon Arora told Reuters, declining to name them.
With recession-era shopping habits entrenched, discount retailers, both in general merchandise and food, are taking sales from Britain's traditional "big four" supermarkets, including Tesco, which became the undisputed leader of the sector under Leahy.
Liverpool, north west England-based B&M, which trades under the B&M Bargain and B&M Homestore brands, opened a net 20 stores in its first half and is confident it can increase its store base from 400 to 850 in eight years.
"The B&M model works just as well on the south coast as it does in the north west and we're mindful that frankly half the country hasn't heard of us," said Arora.
Shares in B&M, which listed at 270 pence, were up 0.7 percent to 271.4 pence at 0902 GMT, valuing the business at 2.73 billion pounds ($4.27 billion).
U.S. buyout group Clayton, Dubilier & Rice and the Arora family, which raised over 1 billion pounds from floating the business, still hold stakes of 29 percent and 26 percent respectively.
B&M made core earnings of 73 million pounds in the six months to Sept. 27. Revenue increased 29.7 percent to 739.8 million, with sales at UK stores open over a year up 4.8 percent. It is paying a maiden interim dividend of 0.9 pence.
In the first half B&M entered continental Europe with the purchase of an 80 percent stake in Germany's Jawoll, which trades from 49 stores.
Arora said B&M's long-term goal was to emerge as "the Dollar General of Europe", a reference to the giant U.S. discount retailer.
1 US dollar = 0.6393 British pound
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