B&M Bargains plans to emulate US value retailer Dollar General as it eyes ambitious growth, starting with a target of 880 stores in the UK.
B&M Bargains announced its intention to float this morning and is expected to be valued at £2.5bn when it lists next month.
The value retailer’s chief executive Simon Arora said he plans to open 40 UK stores each year, as he plans to grow its German business JA Woll, which it acquired last month, at the current rate of one to two stores each year. B&M currently has a 373-strong store estate
Arora said the float shows that “value is here to stay”.
But Arora’s ambitious plans extend across Europe. He said: “Over a very long time we want to replicate the success of Dollar General in the US.”
Dollar General operates 11,000 branches in America which is more than any other retailer in the US, including Walmart. In its last accounts it generated revenue of $17bn and profit of $1bn.
Arora said: “Dollar General is a discount variety retailer with stores that are located in convenient locations, so it is similar to our retail offer, which is modelled on variety retail.
“We want to be the Dollar General of Europe. We want to be in local neighbourhood centres and like them we are price-led.”
Former Dollar General executive vice president Kathleen Guion has been appointed as a B&M non-executive director, bolstering its ambitions. She worked there from 2003 to 2011. She is currently director of The Pantry.
B&M has also appointed two non-executive directors with experience working at European retailers - Carrefour director Thomas Hubner and Harry Brouwer, the current executive vice-president of Unilever Germany, Austria and Switzerland. N Brown director Ron McMillan has also been appointed to the board.
Arora said that B&M is focused on growth in the UK and Germany for the next three to five years and is not currently looking to acquire any other businesses.
He added that B&M had organic growth of £250m per year and over the past two years profits had grown 29% each year.
B&M revealed that in the year to March 29 sales surged 28% to £1.272bn and like-for-likes jumped 6.5%. Adjusted EBITDA surged 24% to £130m. It opened 42 net stores in the period.
B&M said that since the year-end it has continued to trade “strongly” and generated record sales over the Easter period.
B&M Bargains pushes button on IPO as it reveals ambitious growth plans
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B&M Bargains 'to become Dollar General of Europe' as it aims for 900 UK stores