EDITOR'S COMMENT: Flying the flag

Kitchens & Bathrooms News
Editor, Philippa Turrell

I’m feeling decidedly patriotic. It could be because we’re nearing the eve of The Queen’s 60-year reign on the throne (regal not domestic) or perhaps the fast-approaching Olympics. It could even be that I’ve just found Union Flag paper plates, cups and napkins at the back of the kitchen cupboard, clearly leftover from the last British occasion. But whatever the reason, I think it’s about time we all celebrated what Britain has to offer.

While we love the bathrooms and kitchens offered by our friends in Europe, we also shouldn’t forget what is supplied from companies based on these shores. Nevermind Mary Portas making knickers in a Manchester factory – the kitchen and bathroom industries have proudly put Britain on the map for some time. And it’s also particularly timely that a British company –  retail chain Bathstore – has recently dominated the industry headlines. It was founded in Croydon, (the home of supermodel Kate Moss and TV sitcom Terry & June), and what could be more British than that? Now, after two years of rumour and conjecture about a possible Bathstore sale, it can finally be confirmed.

The speculation of its sale by Wolseley may not have had the “will they, won’t they” suspense of the Nescafe Gold Blend couple in the 80s. Following the company’s announcement that it planned to sell or improve 19 companies (although never named), most industry experts believed retail bathroom chain Bathstore would be one. And following the disposal of non-core operations Build Center, Electric Center and Encon it was a matter of “wait and see”. Now all bets are off, as Bathstore has finally been sold by Wolseley to the turnaround investor Endless.

Its new owner has already invested £11million of capital to develop its store estate and drive its e-commerce offer. It certainly seems to be a positive move to spur the future growth of the company. It’s great news for the high streets in Britain and if that isn’t enough to start celebrating and getting the flags flying, I don’t know what is!

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Wolseley sells Bathstore

Following two years of speculation, Building materials giant Wolseley has now sold its retail business Bathstore to a newly-incorporated company backed by Endless LLP, for £15million.

The amount is payable over the next five years, and as part of the transaction Endless LLP has invested £11million of new capital in the business to fund its development.

In the nine months to April 30, 2012, Bathstore had revenue of £66million and had associated assets of £7million at January 31, 2012.

Chief executive of Wolseley, Ian Meakins commented: “The disposal is in line with our strategy of focusing on our core operations. I would like to thank the staff of Bathstore for their commitment to the business and wish them every success for the future.”

In 2010 Wolseley announced its intention to improve or sell 19 core businesses, and although non were mentioned many experts believed Bathstore to be one.

Since that time, many names have been connected to a possible acquisition of the company.

These have included private equity firm Electra, through to trade buyers including the former management team from Marks & Spencer, the former owner of Dolphin Bathrooms Sun Capital Partners, and even its founder Patrick Riley who owns Bathroom Brands.

Bathstore started in Croydon as Simply Bathrooms and sold to Wolseley in 2003 for an undisclosed sum. It built the chain from 33 stores to more than 160.

Bathstore recorded a turnover of £104million and pre-tax profits of £4.5million in the year to July 31, 2009.

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EDITOR’S COMMENT: Beware of the double dipper

Philippa Turrell, Editor
Kitchens & Bathroom News

Buckle your seatbelts; it looks like it’s going to be a bumpy ride. No sooner have we seen the back of the ‘R’ word, global economic experts are suggesting we get set for round two. Something about PIGS – I believe – but not to blame the pork industry.

It could spell more trouble ahead for the kitchen and bathroom industry, which has already seen its fair share of business woes, with the recent financial difficulties at the low end of the market -  Focus DIY and Homeform – and premium-end market too at Simon Bray.

There are also recent shake-ups and uncertainties in the distribution chain, Mark Two suffered with the loss of the Focus DIY business, then got hit again by the demise of Dolphin. There have also been changes at Waterline, MD Mike Lawrence having resigned due to ill health, and unspecified alterations to the BCG business. Although, again, it is suspected it may be a change to personnel.

It could also be that parent company of BCG, Wolseley, has listed the company as one of 19 to sell or improve. Although it is unknown which Wolseley companies are still on the hit-list, industry pundits suggest BCG has been included alongside Bathstore. Could this distributor be set to join the likes of Electric Center and Brandon Hire which have already been hived off? And if so, who would be the likely buyer? There has already been talk of a management buyout but could an acquisition by a competitor be far more likely?

Oddly, though, while there are changes at supplied level, kitchen and bathroom retailers and designers appear to be flourishing. Those who are active in the world of social media have been reporting a flurry of orders, many of which are reported as unusual for this time of year. So, is the pull-through of sales just taking too long, as consumers take more time over making decisions to part with their cash? Or is this a retail anomaly, as consumers get in quick, before the next wave of financial fears, with little to back up orders after that?

While I certainly don’t advocate a ‘Chicken Little’ panic that ‘the sky is falling in’, I would suggest we all keep one eye on the future, while not taking one eye off the past. Don’t forget the valuable lessons you’ve already learned and should there be a second stalling, you’ll be better prepared for that icy dip.