B&M to open 60 stores after profit surge
Group revenues increased by 29.5% to £1.6bn and UK revenues by 20%, the Liverpool-based chain announced in its full year results for the 52 weeks to March 28 today (May 28).
B&M, which has 1,200 stock keeping units including groceries, beverages and confectionery, had invested £7M into 52 new UK store openings in the past 12 months, it said.
Expansion plans in the south of England had also been going well, according to the chain, which employs 19,000 people across 425 stores.
In the past three years, B&M opened 60 new stores in the south, representing 38% of store openings for the period, while 19 were opened in the south this year alone.
‘Rapid store rollout’
Chairman Sir Terry Leahy said: “It’s pleasing to report to shareholders that, in B&M’s first year as a public company, it has delivered strong increases in sales, profits and cash generation, whilst pushing on with a rapid store rollout and investing in new infrastructure to support continued growth.”
Following the acquisition of German discounter chain Jawoll for an undisclosed amount last year, millions had also been spent on two new store openings in Germany. There were also plans to spend £3.2M on warehouse expansions and store expansions in Germany, B&M revealed.
Ceo Simon Arora said he was happy with Jawoll’s progress and, although it was still in its early days, the 49-store German arm of B&M had performed well.
“We are starting to see the benefits of it [Jawoll] accessing our sourcing model,” he said.
“We have plenty of work to do to understand and refine the Jawoll model, but we are excited by the potential of the German market.”
Crucial to its future success
Commenting on B&M’s results today, Conlumino consultant Greg Bromley claimed B&M’s “variety-retailer” business model, which balances broad merchandising with a limited product range, was crucial to its future success.
B&M in figures:
- £1.6bn revenue
- 375 store
- 52 new stores opened in the past 12 months
- 60 new UK stores planned
- 19,000 staff
- £2bn IPO last year
- 1,200 stock keeping units (SKUs)
- 40%: the amount of SKUs that are grocery
“The model allows [B&M] to offer a wide cross-section of products, although focusing on the most popular and best-selling products within each category,” Bromley said.
“In order to widen its appeal, B&M has successfully moved away from being purely a discounter to an all-round value retailer,” he added.
However, discounter growth could be threatened in the future as the economy continued to recover, Bromley warned.
“As the economy continues to recover and disposable incomes grow, B&M and its rivals will find it more challenging to ensure their propositions retain relevance.”
