B&M European Value Retail SA

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B&M is a discount retail operation, distributing grocery products and general fast-moving consumer goods in the UK, Germany and France. Although headquartered in Speke, Liverpool, the business is registered in Luxembourg - where it does not trade - enabling owners the Arora brothers to funnel £millions through tax havens, including the Cayman Islands.[1]
Net sales break down as follows (Dec.2019):
  • 90.2%: Flag-UK.svg UK:
    • B&M, B&M Bargains, B&M Express, B&M Homestore (657); BMStores.co.uk
    • Heron Foods (295); range of chilled and frozen foods and grocery products. HeronFoods.com
  • 3.7%: Flag-France.svg France: Babou (100); Babou.fr

B&M sells a mix of grocery and non-grocery goods, with groceries acting as a traffic driver. It stocks well-known FMCG brands, charging rock-bottom prices.

Grocery products are sourced from a combination of end-of-line and “grey market” products from other parts of the European Union (eg. Polish Coca Cola), as well as from FMCG firms and 3rd-party distributors. Costs are kept low by offering to pay up-front in cash, and for larger volumes. The big FMCG players like P&G and Coca-Cola are very willing to provide B&M with unique sizes and competitive pricing, enabling it to source the cheapest branded products whilst the suppliers gain another avenue for growth.
Non-grocery products are sourced by hoovering up manufacturers' clearance sales; and by B&M's UK and Hong Kong purchasing and design teams, where "design" means copying versions of higher-end competitors; the products are then sourced directly from factories in China. Furthermore, B&M are unconcerned about sourcing requirements, eg. labour pay, supply chains, and environmental practices, further driving down prices.

Company

Shareholders

Total float: 81.9%
† The Arora family investment vehicle, owned 50/50 by Simon and Robert Arora. See Simon AroraWikipedia-W.svg and Bobby AroraWikipedia-W.svg.
Source: MarketScreener.svg, Apr.2020

Structure

  • B&M European Value Retail SA, reg. Luxembourg in May.2014, OpenCorporates-sm.svg
    • B&M European Value Retail Holdco 1 Ltd, OpenCorporates-sm.svg, reg. Luxembourg Flag-Luxembourg.svg
      • B&M European Value Retail Holdco 2 Ltd, OpenCorporates-sm.svg
        • B&M European Value Retail Holdco 3 Ltd, OpenCorporates-sm.svg
          • B&M European Value Retail Holdco 4 Ltd, OpenCorporates-sm.svg
            • EV Retail Ltd, was Firesource Ltd, OpenCorporates-sm.svg
              • B&M Retail Ltd, OpenCorporates-sm.svg
              • Heron Food Group Ltd, OpenCorporates-sm.svg
                • Heron Foods Ltd, OpenCorporates-sm.svg
              • Opus Homewares Ltd, OpenCorporates-sm.svg
              • Retail Industry Apprenticeships Ltd, OpenCorporates-sm.svg

  • B&M European Value Retail 2 Sarl, OpenCorporates-sm.svg, reg. Luxembourg Flag-Luxembourg.svg

Timelines

B&M

In 1995, the Arora brothers combined forces to set up Orient Sourcing Services Ltd,OpenCorporates-sm.svg a wholesale business sourcing cheap domestic goods from Asia which supplied retail chains including BHS, Primark and Argos.[2] The business was sold to Marks & Spencer supplier Lambert Howarth Group plc in Dec.2000,[3][4] where Simon Arora subsequently worked.[5] They then turned their attention to retailing those same cheap Asian goods, acquiring the loss-making B&M from the Phildrew Ventures Partnership, a venture capital firm ultimately owned by Swiss multinational UBS Group AG.[6]

Mar.2020
Jawoll.svgDeals-Arrow-Right.svg
Jawoll: B&M sold its majority 80% shareholding in the 89-store German discount retailer JA Woll Handels GmbH to a consortium led by AC Curtis Salta GmbH, a company financed by private equity firm Adiuva Capital GmbH. The consortium also included Wiebke Stern, Sebastian Dorin, Alexander Dorin, STIWEC GmbH and Jalogy Beteiligungs GmbH.[7][8] Completion of the transaction was conditional upon German competition authority clearance being granted. Jawoll.de
Oct.2018
Babou.svgDeals-Arrow-Left.svg
Babou, a French discount retail chain with 95 stores mostly in out-of-town locations, was acquired.[9]
Jan.2018 Clayton, Dubilier & Rice LLC had been gradually selling its shareholding since 2013,[10] and finally exited completely. In total, the firm made ~£1.5bn out of the chain.[11]
Aug.2017
Heron-Foods.svgDeals-Arrow-Left.svg
Heron Food Group Ltd, a discount convenience retailer operating mainly in the North of England with 251 stores, was acquired by B&M subsidiary, EV Retail Ltd.[12]
Jun.2014
London-Stock-Exchange.svg
B&M European Value Retail SA was listed on the London Stock Exchange via an Initial Public Offering.[13][14]
May.2014 B&M European Value Retail SA was registered in Luxembourg, becoming the ultimate parent company of the group. OpenCorporates-sm.svg
Mar.2014
Jawoll.svgDeals-Arrow-Left.svg
Jawoll: a majority stake of 80% was acquired in the German discount retailer, JA Woll Handels GmbH, with management holding the remainder. Jawoll operated 50+ stores under the Jawoll and Hafu facias in the north-west of Germany.[15]
Dec.2012
Clayton-Dubilier-Rice.svg
Clayton, Dubilier & Rice LLC, a USA private equity firm which conceals itself in the Cayman Islands, bought a 60% stake in the company.[16] Firesource Ltd was acquired by SB Europe Sarl, which was ultimately purchased by CDR Bounty Sarl, both incorporated in Luxembourg.AR-Dec.2012 Payments and dividends are funnelled to the Arora brothers through tax havens Luxembourg and the Cayman Islands.[1]
Sept.2012 Private Equity Funding: the Arora brothers appointed Rothschild to sell a significant stake in the company,[17] seeking funding to back their European expansion plans.
Aug.2010 Opus Homewares Ltd,OpenCorporates-sm.svg owned by family members, was acquired by Firesource Ltd.[18] The trade and assets were hived up into B&M Retail Ltd.AR-Dec.2010
2007‑2012 Expansion: the company took over stores as they became available, such as Focus DIY (11),[19] Au-Naturale (30),[20] Kwik Save (8),[21] and Woolworths[22] stores.
Nov.2006 Glyn Webb (Wallpapers) Ltd, a chain of Do It Yourself stores with 27 outlets in the north and Midlands, was acquired from private equity firm Endless LLP. The trading assets were hived up into B&M Retail Ltd, and all stores subsequently converted to the B&M Homestore format.AR-Dec.2008,[23] WebsiteArchive-org-sm.svg
Dec.2004 Simon and Robert Arora bought the loss-making company, which had 21 discount stores, from Phildrew Investments. Their brother Robin joined them a few years later.[4] Simon Arora previously worked for Barclays and private equity firm 3i Group plc. The three brothers are the sons of an Indian migrant who arrived in the UK in the 1960s, and became a market trader.
Jul.1997 B&M Retail Ltd: the company changed its name.CH-1357507
Oct.1996 Firesource Ltd (later "EV Retail Ltd"OpenCorporates-sm.svg), acquired the company.AR-Feb.1997 Firesource's majority-by-far shareholder was the "Phildrew Ventures Partnership", a venture capital firm ultimately owned by UBS Group AG,AR-Dec.1995
Mar.1978 B&M Bargains (W&R) Ltd was incorporated, with its 1st store opening in Cleveleys, Lancashire.CH-1357507 The name was later shortened to B&M, short for "Bargain Madness".[24]
WikipediaWikipedia-W.svg states "The business was founded by Malcolm Billington as Billington & Mayman", but provides no sources; and no early filings are available at Companies House for verification. "M & P Billington Ltd" was incorporated in Feb.1978,OpenCorporates-sm.svg but was dissolved in Nov.1997 shortly after private equity firm Phildrew Ventures Partnership LLP acquired B&M.

Heron Foods Ltd

Heron-Foods.svg
Heron Foods is a retailer of groceries, chilled and frozen foods through its chain of stores. Heron Foods trades on a much lower cost and selling price model than the larger companies which control the bulk of the UK retail market, selling a limited range of branded and non-branded products at very low prices.
Since being acquired by B&M in Aug.2017, Heron Foods has opened a number of new stores under the new B&M Express banner,[25] with more Heron Foods stores also being converted.[26]

Aug.2017
B-and-M-European-Value-Retail-Corporate.svgDeals-All-Change.svg
B&M European Value Retail SA acquired Heron Foods' parent company Heron Food Group Ltd.[27][28]
Nov.2013 Sale & Leaseback: a number of freehold properties were subject to sale and leaseback to the directors. This treatment followed on from previous sales of Heron properties to the directors and their SIPPs.[29]:Dec.2013
Sept.2012
Cooltrader.svgDeals-Arrow-Left.svg
#Cooltrader Ltd: 53 stores were acquired from Iceland Foods Ltd, expanding Heron Foods into North Wales and strengthening its presence in the Midlands.[29]:Dec.2012
Feb.2003 MBO: the company was subject to a management buyout, with Heron Food Group LtdOpenCorporates-sm.svg becoming the new holdco.[29]:Dec.2002 The takeover took place when owners Malcolm and Sheial Heuck wished to retire, and sold their stake to their sons,[30] who managed the company.
Jun.1999 First Freeze: certain of the assets of a chain of 17 frozen food stores from the receivers of "Dawn 'til Dusk plc". First Freeze was a part of Milbank Foods Ltd, a subsidiary of Dawn 'til Dusk plc, and operated in the Newcastle area.[29]:Dec.1999
Apr.1998 Snow City: the trade and assets of the 11-store chain with outlets in the Manchester and Liverpool areas was acquired from Harry Yearsley LtdOpenCorporates-sm.svg.[29]:Dec.1998 YearsleyGroup.co.uk, YearsleyFood.co.uk
Mar.1995 Quayside: acquired 3 stores in the North East of England.[31]
Nov.1981 Heron Frozen Foods Ltd: the company changed its name when Anthony Grindell sold the business to his sister's family, the Heucks.
1979 Grindells Butchers Ltd opened its first store on Holderness Road in Hull, England.
Additional Sources: Corporate information. Heron Foods Ltd. Accessed Feb.12.2020.

Cooltrader Ltd

Cooltrader.svg
Cooltrader was founded in Mar.2001 by Malcolm Walker after he was forced to leave Iceland in Jan.2001. Starting from scratch, he grew the fledgling company into a 54-outlet chain by the time it was acquired by Heron Foods in Sept.2012.

Sept.2012
Heron-Foods.svgDeals-All-Change.svg
#Heron Foods Ltd agreed to buy Cooltrader from Iceland. The deal included 54 of the 58 shops, and the depot and head office of Cooltrader.[32][33] The acquired Cooltrader outlets were converted to the Heron Foods brand.
Feb.2005
Deals-All-Change.svg
Iceland Foods Ltd, then owned by Icelandic investment firm Baugur Group, bought the 24-outlet business, when Malcolm Walker was reinstated as manager of the Iceland chain.[34]
Oct.2004 Poundfreeze, formally "Kingdom Inland Trading Ltd", a small chain of frozen-food retailers, was purchased. The trade and assets were hived up into Cooltrader Ltd.[35]
Mar.2001 Cooltrader Ltd, a frozen food retail operation, was established in Wrexham, North Wales by Malcolm Walker after he left Iceland Group plc.[36][37]

References

  1. ^ a b B&M budget store bosses pay themselves MILLIONS through tax havens, Daily Mail investigation reveals. Sarah Meddings, This is Money, Feb.27.2017. Original archived on Feb.28.2017.
  2. ^ Britain's Top 100 Entrepreneurs 2015: #1 Simon and Bobby Arora. Management Today, ??.2015.
  3. ^ Annual Report and Accounts 2001. Lambert Howarth Group plc, Dec.31.2001. Original archived on Aug.05.2003.
  4. ^ a b B&M Bargains sets sights on European expansion. Sarah Butler, The Guardian, Dec.21.2012.
  5. ^ Profile: Simon Arora. Bloomberg. Accessed Feb.10.2020.
  6. ^ Phildrew Ventures renamed UBS Capital. Jim Armitage, This is Money, Aug.22.2000.
  7. ^ B&M sales and EBITDA jump after Jawoll acquisition and store expansion. Matthew Ord, Insider Media, Mar.11.2020.
  8. ^ Jawoll is a big no-no as B&M profits hit by German chain. Ashley Armstrong, The Times, Nov.13.2019.
  9. ^ B&M acquires French discounter. IGD Retail Analysis, Oct.22.2018.
  10. ^ B&M share sale raises £408m. Richard rost, Insider Media Ltd, Jul.24.2015.
  11. ^ Backers of cut-price chain B&M make £1bn profit on their investment. Zoe Wood, The Guardian, Jan.12.2018.
  12. ^ Family-run Heron Foods taken over by B&M in £152m deal. BBC News, Aug.02.2017.
  13. ^ B&M Value Retail's stock market float sees return of Sir Terry Leahy. Sarah Butler, The Guardian, Jun.12.2014.
  14. ^ B&M Bargains boosts London's listing market. Ashley Armstrong, The Telegraph, Jun.12.2014.
  15. ^ B&M sales and EBITDA jump after Jawoll acquisition and store expansion. Matthew Chapman, Retail Week, Nov.18.2014.
  16. ^ Arora brothers cash in £227m of shares from B&M retail chain. Sarah Butler, The Guardian, Jun.02.2017.
  17. ^ Buyers line up for £850m B&M discount retailer. Helia Ebrahimi, Nathalie Thomas, The Telegraph, Nov.02.2012.
  18. ^ B&M buys 36 Opus stores. Insider Media Ltd, Aug.17.2010.
  19. ^ Locations of Focus stores acquired by Wickes and B&M Bargains revealed. Nicola Harrison, Retail Week, May.26.2011.
  20. ^ B&M Bargains at a glance. Tiffany Holland, Retail Week, Nov.05.2012.
  21. ^ B&M Bargains buys ex-Kwik Save stores. Talking Retail, Oct.15.2007.
  22. ^ Woolies Watch: What happened to your local Woolworths? Martin Stabe, Retail Week, Aug.28.2009.
  23. ^ Glyn Webb changes hands again. Manchester Evening News, Feb.15.2007.
  24. ^ Ever wondered what B&M stands for? This is the story behind the bargain shop’s name. Hayley Richardson, The Sun, Oct.18.2017.
  25. ^ Ramsey - B&M Express. Store Locator, Heron Foods Ltd. Accessed Jan.15.2020.
  26. ^ B&M converts Heron Foods branches to 'B&M Express' fascia. Steve Farrell, The Grocer, Sept.03.2018.
  27. ^ B&M acquires discount c-store Heron Foods for £152m. Ieuan Hughes, Convenience Retailer, Aug.04.2017.
  28. ^ B&M Bargains moves into convenience retailing with £152m swoop on Heron Foods. Ashley Armstrong, The Telegraph, Aug.02.2017.
  29. ^ a b c d e Heron Foods Ltd. Annual Reports, Companies House. Accessed Apr.02.2020.
  30. ^ New Frozen Food Shop to Open. N Dixson, News & Star, Mar.11.2005. Original archived
  31. ^ Moments in Time. Heron Foods Ltd. Original archived on Jul.20.2015.
  32. ^ Iceland delivers a year of good progress. Iceland Foods Ltd, Jun.07.2013. Original archived on Apr.17.2020.
  33. ^ Heron swoops for Iceland's Cooltrader stores. Insider Media Ltd, Sept.05.2012.
  34. ^ Let's stick with frozen food, says new Iceland boss. The Telegraph, Dec.21.2004.
  35. ^ Cooltrader buys food retailer. Tom Bawden, The Times, Oct.08.2004.
  36. ^ Malcolm Walker's biography. Iceland Foods Ltd. Original archived on Dec.18.2011.
  37. ^ Ex-Iceland boss opens rival store. This is Money, Jul.26.2001.