B&M buoyant as UK and Germany are strong, but clothing has been slow

By

Sandra Halliday

Published
May 25, 2017

UK-based B&M European Value Retail had a generally good time in the 12 months to March 25 as sales soared on the back of both new stores and a strong performance in existing locations.

There were a few weak spots, such as poor clothing and footwear sales at its German Jawoll operation as the weather turned particularly cold. But apart from that, the company’s low-priced general merchandise offer scored highly with increasingly budget-focused shoppers.

The company’s “flex” approach, that allows it to ramp up (or minimise) categories such as furniture, homewares, electricals, toys, and much more depending on consumer priorities, also helps it offer just what shoppers want at any given time.

The company opened 53 new stores in the UK during the fiscal year, including nine relocations to its large, modern Homestore format, while it also opened 19 new stores in Germany. And it looks like the momentum will continue as it opens up to another 50 in the UK and 15 in Germany in this financial year.

It currently has 537 stores in Britain and has upgraded its target from 850 to 950 with a greater presence in the South east where it previously was under-represented. It operate 75 German stores.

So just how well did it do last year? Group revenues rose 19.4% to £2.43bn and UK comparable sales rose 3.1%. Q4 comps were up 2.9% and the firm said it has seen “an excellent start to 2018”. Pre-tax profit rose 25.6% to £190.1m.

Chairman Terry Leahy, who ran supermarkets giant Tesco during its most successful period, said: “There was a robust return of trading momentum during the second half which has continued into the early weeks of the new financial year, affirming that B&M's offer resonates well with customers during a period of economic uncertainty and profound structural change in retailing."

CEO Simon Arora added: “The structural shift toward value in retailing, in which B&M has emerged as a UK leader, still has a long way to run, irrespective of the economic climate. There remains a significant growth opportunity in both the UK and those European markets which are still under-penetrated by general merchandise discount formats. Our market shares within individual product categories remain very small which provides scope for the business to maintain an attractive level of growth in the UK and as we extend our geographic reach in the years ahead.”