B&M unveils turnaround plan after issuing profit warning

In a half-year trading update, B&M profits sank to £198m for the 26 weeks to September 27, impacted by “weak” like-for-like trading performance in B&M UK and lower trading gross margins.

Like-for-like sales across the UK business inched up 0.1% for the period, driven by an uptick in general merchandise sales, which offset a dip in food revenues.

B&M said that full-year EBITDA would fall between £510m and £560m, down from £620m the year before.

Total group revenues for the business jumped 4% to over £2.7bn, driven by strong trading in France and by the addition of 15 new stores across the group in the UK, France and Heron Foods.

New chief executive Tjeerd Jegen said that delivering sustainable growth for B&M’s UK business was now an “absolute priority” as he unveiled the retailer’s ‘Back to B&M Basics’ turnaround plan.

The plan includes adjusting prices on FMCG Key Value Items to “sharpen our customer value proposition”, rebooting its ‘managers specials’ promotions, refocusing its ranges to reduce lines and accelerate clearance of discontinued ranges and restoring on-shelf availability.

Jegen, who launched a review of B&M weeks after taking on the chief executive role in June, said the conclusion was that: “while B&M’s value proposition remains strong, our operational execution has been weak”.

“Our response is a decisive plan,” he continued. “’Back to B&M Basics’, focused on returning the UK business to sustainable like-for-like growth. This is our absolute priority. We have already sharpened our price position, and we are moving at pace to refocus our ranges, improve on-shelf availability, and bring back excitement to our stores.

“We have more work to do, but we are confident these changes will restore consistent like-for-like sales growth over time.”