B&M Bargains has reported a 43% surge in pre-tax profit to £90.6m last year after US private investor CD&R bought a “significant” stake in the value retailer in December. Co-managing director Simon Arora speaks to Retail Week.
Retail Week: You have managed to generate a 43% increase in profit last year, how did you achieve this?
Simon Arora: It is primarily a result of store expansion and a successful push into the south. The new stores that have opened outside of our traditional heartland have traded well because customers have not seen a B&M before.
At year end you had 324 stores, how many shops do you ultimately want in the UK?
We tend not to nail ourselves to a figure but we know that about half the UK doesn’t have access to a local B&M in terms of the UK appetite. We do see ourselves opening 40 stores a year for the foreseeable future.
Has your customer base changed?
We have put a lot of effort into ensuring the products are attractively priced. It’s not just price-conscious customers that are shopping with us but middle class customers that like our homewares and non-grocery offers. We’re selling more products in the £10-£20 bracket than we do with a £1 price tag.
Our stores appeal to a very broad spectrum of shoppers. We are finding that it’s a consistent theme that it’s very much a family store. When we open up new stores it’s more of a family offer for the south
How has trading been since year-end in December?
Trading has been steady but like all retailers we would like a break in the cold weather. Trading is in line with expectations but under the new owners we don’t give out like-for-like figures.
What are your growth plans for the UK and overseas?
In the UK we will have more of the same. We’re not looking to change the proposition. We are still looking for a partner for overseas growth.
Do you have any plans to launch online?
We don’t currently have any online activity but it’s something we watch closely and we will do it when the time is right.
You have generated sales of £937.2m, when will you break through the £1bn barrier?
We will go through the £1bn barrier this year. We have always believed in the B&M proposition and it is here to stay. We’ve always believed in UK retailing.
You appointed Sir Terry Leahy as your chairman, how is the relationship working?
The relationship is working and there are no more people changes.