The UK and its retail industry still tick the boxes for investment opportunities.

The UK and its retail industry still tick the boxes for investment opportunities.

Since selling the successful DFS to Advent International, I have spent the past 26 months researching investment opportunities in the UK, Eastern and Western Europe and, more tentatively, in China. For your information, delectation and amusement I summarise my conclusions.

After thousands of miles of travel, hundreds of thousands of pounds in due diligence fees, and many tons of bullshit, I know where, in what sector and when to invest. How about that.

The where is here in the UK, the sector is undoubtedly retail – probably big-ticket – and the when is right now.

It is a bit of a contra view and so you may well not embrace all or any of my conclusions. Personally, I have no doubts. And, unlike the more traditional private equity organisation, I am investing my own funds. Money that was neither inherited, stolen nor won, but was the product of four decades of focused effort and blood, sweat and tears. So my due diligence is diligent.

I have looked closely at the property, farming, warehousing, health and fitness, leisure, fashion, food production and manufacturing sectors both here and in the Far East, and even fish and chip shops. But if your broad-brush business strategy is big bucks bottom line then retail beats all the rest hands down.

As a comforting bit of corroboration, do a bit of research on the world’s mega rich. Exclude the Russian oligarchs, those with desert roots and the thieves (white collar and gangster) and behold: retailers are right up there, sparkling brightly in the ‘big hitters’ league of global wealth. 

Mexican, Australian, European, Japanese – take your pick. These high-worth shopkeepers and their families own much more than their fair share of mega-yachts, Gulfstream jets, ‘D’ flawless diamonds and London residences.

A clue as to where to locate your great retail cash generating machine – England, our green and pleasant land, indeed the whole of the UK. A land of spenders and credit, with a robust legal system and with little risk of tsunami, tornado or earthquake. A small, easily traversed island with excellent road, rail and air links. Safe, conservative, financially stable and with seven-day-a-week trading.

And as for the time to make that investment move? Well, right now will do nicely. With downsizing, subletting and strategic closure in vogue the opportunity to build a meaningful store portfolio at the right price and quickly has never been better.

My belief in the continuing monster-scale scope and opportunity for online growth knows no bounds, but also I recognise that a few dozen real stores on the ground are complementary and vital for customer reassurance.

While G4S struggled with its guards for the Olympics, the UK still has a store of talent desperate to be motivated, trained, recognised, appreciated and given a fair deal – potential top management and staff who, with the right incentive and treated properly, will work hard and innovatively to help create your new retail empire.

If you can’t quite grasp the awesome power of this concept take a look at the stores and P&L’s of Next and John Lewis, who know a bit about turning people on. And as a stellar example of successful growth in the UK, right now and with a big-ticket item, then Wren Kitchens outshines them all. Sadly I am not an investor.

Doom and gloom: forget it.

  • Lord Kirkham is the founder of DFS