Beales chief confirms buyout despite tough times for department stores
As the massive headwinds that the UK Department store sector is battling continue, we're seeing plenty of change taking place.
And one big change was confirmed on Thursday at Beales. The company’s senior executive Tony Brown has finalised a management buyout with the purchase of the 97% stake held by Portnard Ltd and English Rose Estates Ltd.
That’s certainly a bold step for any manager to take in the current retail environment, department stores being one of the categories suffering most from the UK retail devastation. Even Debenhams on Thursday said it’s planning to close a raft of stores that may be profitable now, but that it thinks are unlikely to be so in a few years’ time.
The Times reported that the buyout has been funded by an unnamed international private equity group.
While the current environment is challenging, Beales has already been through its own process of restructuring well before its sector peers really started to suffer. The company, which was founded in 1881, acquired rival chain Westgate around eight years ago but struggled to make a go of the combined business and carried out a company voluntary arrangement two years ago. That saw it closing 10 loss-making stores and achieving rent reductions on others.
The company now has 21 stores and in the year to March 31 made a pre-tax loss of £1.1 million on turnover of £48.7 million. That was a worse result than the previous year, but with exceptional costs taken out, the loss actually fell sharply.
Brown, who was in charge of BHS under Philip Green’s ownership, had previously run Beales between 2008 and 2013.
He said that the company has the backing of its investors and lenders for its three-year strategy and the location of most of its stores in market towns and the surrounding areas means it’s able to tailor its products and its loyalty programs better for the specific consumer base in those areas. “We are a local department store and what you find in the store in Bournemouth [in Dorset] will be different to the one in Beccles [in Suffolk]. That is our unique selling point,” he told The Times.
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