In the British press, the summer months are traditionally
referred to as the “silly season”, with the media
using parliament’s break as an excuse to turn out bizarre stories
and all manner of questionable statistics. Not so silly, however,
is the activity taking place in the multichannel retail sector if
the recent rush of acquisitions is to go by.
First was the news, in July, that BrightMinds, an educational
toys and games cataloguer, bought children’s furniture catalogue
The Sleepover Company for an undisclosed sum. BrightMinds’
managing director Alison Quill says that the acquired brand will
be run as a separate business, keeping its catalogue and website.
There were no redundancies involved with the sale.
Spirit of Nature, a cataloguer/etailer of eco nappies and other
environmentally friendly household goods, was acquired in June
and reopened its website July. It was bought by Milborne Group,
which specialises in the acquisition and management of
financially distressed online retail businesses. Milborne Group
is operated by Adam Smith, the founder of Adili (now Ascension)
and business partner James Akin-Smith, founder of BeCheeky.
At its height, Spirit of Nature had a turnover of £1.5
million and Adam Smith says he aims to nurture the business back
to health. His first priorities are to get the business
restocked, introduce new products and make improvements to the
efficiency of the fulfilment and customer services departments.
He is also planning to reintroduce a gifts catalogue in time for
Christmas.
One of the reasons Spirit of Nature was in difficulty, says
Smith, is because the product range didn’t grow with its
customers’ needs-“plenty of nappies but nothing for the
mums or older children”. Smith says he will move the
business’s positioning and focus more on “effectively
servicing ethical mums”-everything from nappies, to
skincare, to clothing.
Everything must go
Buying businesses in financial difficulty was a trend of the
summer. On 29th July, workwear and uniforms
cataloguer/distributor Alexandra appointed PricewaterhouseCoopers
as administrator after abandoning talks to raise funds through
the sale of equity. Just a month previously, Catalogue e-business
had reported on Alexandra’s restructuring efforts. By 6th August,
Alexandra’s assets and Dimensions Clothing, another workwear
supplier, were acquired by US-based menswear retailer Men’s
Wearhouse for approximately £61 million. The combined
businesses, said a statement from Men’s Wearhouse, will be
organised into a holding company of which Men’s Wearhouse will
control 86 percent and the existing shareholders of Dimensions
will hold the remaining 14 percent.
On 12th August, Findel announced it had sold lossmaking Confetti,
a multichannel retailer of wedding products, and gifts and
gadgets etailer I Want One of Those to Metro Holdings, a
subsidiary of The Hut Group. The Hut Group, which operates Zavvi
and Washbag.com as well as white-label sites for Debenhams and
Woolworths, paid £600,000 for the two brands. Just a day
after the acquisition was made public, The Hut placed Confetti
into administration, closing its five retail stores and making 48
of Confetti’s 96 employees redundant. I Want One of Those, on the
other hand, blogged about “moving to a shiny new
warehouse” and “continuing to launch gazillions of
awesome new products”.
At press time, the latest deal to be finalised was Flying Brands’
acquisition of Garden Centre Online, an etailer of gardening
hardware products, for £130,000. For the 12 months to August
2009, Garden Centre Online made a pretax loss of £110,000 on
turnover of £1.25 million. It is anticipated that in the
year to to 31st August 2010, sales will be similar to the
previous year with a small pretax loss.
Flying Brands also recently bought London florist Drake Algar for
£500,000. In addition, it has confirmed that an agreement
has been reached to dispose of its “noncore”
collectibles business Benham in order to free up resources to
invest in its main gardening and gifts divisions. Flying Brands
says it has entered into heads of agreement in respect of the
sale, and expects it to complete in September.
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