Wyevale Garden Centres put up for sale by Terra Firma

Wyevale Garden Centres (WGC), the UK’s biggest garden centre operator, has been put up for sale by Terra Firma as it seeks to complete a full exit for investors from its third fund, TFCPIII. Christie & Co, the specialist business property advisor, has been appointed to explore a range of sales options for the business, from a sale of the whole business to individual garden centres. The centres are expected to be attractive to a wide range of buyers, from financial institutions through to existing garden centre operators and local entrepreneurs. The sale comes at an advanced stage of a turnaround programme for WGC, which has seen significant

investment in

the core business. Customers and colleagues have responded positively to these improvements with the business now achieving sales and profit growth.

Wesfarmers sells Homebase, describing it as a “disappointing investment”

Bunnings parent Wesfarmers has announced it has agreed to divest the Homebase business to Hilco Capital for just £1, as it said the “risks associated with a turnaround don’t justify the additional investment and management required”. Under

the terms of the

agreement, the buyer – a company associated with Hilco Capital - will acquire all Homebase assets, including the Homebase brand, its store network, freehold property, property leases and inventory for a nominal amount (£1). Restructuring specialist Hilco Capital has been involved in the turnaround of a number of major retail brands in the UK, including HMV, the UK arm of Staples and Habitat. Wesfarmers managing director Rob Scott said the agreement follows a comprehensive review of the Bunnings United Kingdom

and Ireland (BUKI) business, which considered a range of options to improve shareholder returns. He said: “A divestment under the agreed terms is in the best interests of Wesfarmers’ shareholders and will support the ongoing reset and repositioning of the Homebase business.” “Homebase was acquired

by Wesfarmers in 2016. The investment has been disappointing, with the problems arising from poor execution post - acquisition being compounded by a deterioration in the macro environment and retail sector in the UK.” Wesfarmers advises that record a loss

it expects to of

£200million to £230million in the Group’s 2018 full-year


results, subject to completion and review by Ernst & Young. As a result of the deal, the 24 Bunnings pilot stores that have

been rolled out will convert to the Homebase brand promptly following completion. Wesfarmers will participate in a value share mechanism whereby it would be entitled to 20% of any equity distributions from the business. This obligation is not limited by time, allowing Wesfarmers to participate in any profitable

DIY and homeware stores the worst offenders in underage knife sales

The business has enjoyed exceptionally

strong sales in

recent weeks, with a record breaking Mayday bank holiday weekend, the highest one-week’ sales ever and May on track to be the most profitable month in the company’s history. The garden centre sector is vibrant and growing with Mintel forecasting a growth rate of around 3% per annum through to 2021. Vice-Chairman of Terra Firma and Chairman of WGC, Justin King said:

“The improvements

made by the new leadership team at Wyevale Garden Centres supported by 6,000 dedicated colleagues, means that now is the right time to seek new, long term ownership for the business.”

Despite running the risk of facing penalties, a high percentage of high street retailers still failed mystery shopper tests last year, with homeware and DIY stores said to be the worst culprits, selling knives to four in ten young customers without requesting age identification. New data

from retail age

check company Serve Legal revealed that knives were sold by high street retailers to one in four teenage mystery shoppers last year without proof of age being requested. In

over 2,350 knife sale

test visits undertaken by the company across the UK in 2017, 26% of sales went unchallenged. This comes despite the fact that prominent retailers have signed the

government’s voluntary

agreement on underage knife sales.

Pass rates are little better

than 10 years ago, says the organisation, despite rising test volumes and the voluntary agreement being in place. Serve Legal is surprised at what it describes as “complacency on the high street” and, as a result, is calling for harsher penalties for retailers breaking the law. Most disappointing was that homeware and DIY stores reportedly sold knives to 41% of young mystery shoppers without requesting age identification.

Supermarkets fared better but still failed one in five (21%) age check tests.

London had the UK’s highest pass rate at 82% – a likely outcome of Operation Sceptre, the Metropolitan Police’s anti knife crime programme - but retailer commitment to testing fell by 5%. 2016 (232 tests in 2017 vs. 245 in 2016). Scotland and Northern Ireland had the UK’s lowest knife test pass rates at 59 per cent each. The


new Offensive Weapons Bill brings

forward plans

Secretary’s to ban

home deliveries for knives bought online. Under the new legislation, customers will have to collect their purchase from a designated collection point. Details of how this will work in practice and how age checks will be enforced, however, are yet to be announced.

Wickes to cut 100 head office jobs

Wickes has announced it will axe 100 head office jobs from its base in Watford as a cost- saving strategy amongst difficult trading conditions. The retailer said: “In order to continue to drive growth for our business, we have been re-shaping our support centre to allow us to be leaner and more agile, and focus on key areas of growth in our multi- channel / digital businesses.

The new structure will result in the reduction of approximately 100 out of 7,000 roles in the business. The business is committed to fully supporting all those affected.” Owner of the DIY retailer,

Travis Perkins Plc said in its third quarter report last year: “We have delivered a good like-for-like sales performance

across the group in the third quarter against a challenging market backdrop of input cost inflation and market volatility,” chief

executive John Carter

said. “Trading conditions in our markets continue to be mixed, with consumer discretionary spending under pressure from rising inflation and on-going uncertainty in the UK economy.”

divestment of the business in the long-term. Former

Kingfisher retail

director Damian McGloughlin, who joined BUKI to head up the new management, will remain with the company and “continue to lead Homebase in delivering management’s turnaround plan”, Wesfarmers explained.

Retailers need to do more to target rising number of female DIYers Although four in 10 shoppers

think home improvement stores are aimed at men, British women are the biggest spenders, splashing out over £300 a year. New research by Barclaycard

reveals a rise in females doing it for themselves as one in six women (16%) are visiting DIY stores more often than they did two years ago – compared to only 13% of men. Females are also increasingly flexing their DIY muscles, as 26% consider themselves to be more handy at DIY than they were 24 months ago.

British women spend on average £303 a year on DIY purchases, or £30 more than the average amount spent by men (£273).

A fifth of females (19%) now claim to do more DIY than their partner, with one in 10 (11%) putting this down to relying less on others to help with their home improvements. The influence of social media also plays a part, with 15% of women doing more DIY because they’ve been inspired by interior trends on Pinterest and Instagram. Barclaycard director of strategy Anita Liu Harvey said: “It seems the next generation of women are taking an increasingly active role in DIY. The research suggests the purchasing power currently lies firmly with women.”

01 JUNE 2018 DIY WEEK 5

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