B&M is one of the fastest growing retailers in the UK and also one of the most profitable of the discounters. Led by brothers Simon and Bobby Arora since they acquired the business in 2004, they remained in charge following the group’s flotation in 2014. There has been change at the top of the business towards the end of 2022, however, with CFO Alex Russo having taken over as CEO following Simon Arora’s retirement.
B&M expanded internationally through its acquisitions of German-based Jawoll in 2014 – disposed of in 2020 – and French retailer Babou in 2018, which has been turned around following a rebrand as B&M France. Domestic expansion also came in the form of an acquisition as B&M added Heron Foods to its cohort in 2017.
Following a boost from the acquisition of 51 former Wilko stores in late 2023, B&M has upped its target to 1,200 UK stores. It got to just over 700 by the end of March 2023 and expects to open at least 125 stores over the next three years, while “geographic expansion” of Heron Foods is also ongoing.
Home delivery is restricted to large garden items, including sheds, greenhouses, decking and fencing, from a dedicated B&M Garden Buildings site as of April 2023 after a wider online trial was pulled from its core site after less than a year.
B&M Group sales rose 6.6% to £4,983m in the year to 25 March 2023 (FY2022), reflecting modest 4.0% growth across the core B&M UK operation and robust growth across the smaller Heron and B&M France businesses. Margins remain robust for the sector, but weakened somewhat as the retailer invested in keeping prices down and ongoing expansion. Pre-tax profit margin came in at a reduced 8.7% in FY2022, down from 11.2% the previous year, on the back of a 17.0% drop in statutory profit to £436m.
Innovation rating: 2