Primark may epitomise the rapid development of UK value retailing, but entering the new millennium, Matalan and George at Asda sales exceeded Primark’s, while Peacocks was not far behind, passing £200m a year and a close fourth in what was a burgeoning segment.
However, Retail Week Knowledge Bank’s recently updated profile of Peacocks shows that while it remains in fourth place with latest annual sales of £526m, this is now just half Matalan’s total and less than a quarter that of Primark and George. Moreover, heavy interest charges have led to pre-tax losses, while benchmarking ratios like sales densities are low and employment costs high.
In addition to Peacocks, the group includes Bonmarché, the womenswear chain, adding sales just short of £200m for the latest four years. Bonmarché’s performances have been problematic since its acquisition in 2002, arguably holding back the core business’s development when the value market was at its most dynamic. Chief executive Richard Kirk eventually led a private equity-backed MBO in 2006, with John Lovering returning to the board and remaining until recently. A sale or refinancing was attempted in 2007, but put on hold as the economy tightened, before being resurrected in 2010, but pulled once more. The appointment of headhunters to recruit a new chairman has renewed speculation that a status change, such as an IPO, could still be on the cards.
The group’s Achilles’ heel remains Bonmarché. The two formats’ operational functions remain devolved to local teams, although logistics, IT, property and HR are now orchestrated centrally. Balancing this has been the blooming Peacocks franchise network, developed since 2003 in 18 countries and passing the 100 store mark in early-2011, covering the Middle East and central and eastern Europe. Even Primark cannot match that - yet.
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