B&M Bargains pushes button on IPO as it reveals ambitious growth plans

The value general merchandise retailer aims to raise £75m on the premium listing to pay down debt.

B&M’s private equity owner CD&R is expected to sell a proportion of its share. B&M chief executive Simon Arora and trading director Bobby Arora will retain the majority of their stake and continue to lead the business.

The 373-store retailer said the “potential for further growth is significant” as an estimated 66% of the UK population does not currently have easy access to a B&M store.

B&M recently acquired an 80% stake in German discount chain JA Woll and aims to grow the business in Europe. The statement said: “In exploiting the opportunities in European discount retail, B&M aims to replicate the success of Dollar General in the US and the business models of both companies share many similarities. Dollar General has a 20 year track record of growth in the US and today has more than 11,000 stores with revenues of over $17bn.”

Former Tesco boss and B&M chairman Sir Terry Leahy said: “B&M is a first-class business operating in a genuinely exciting segment of the retail market, driven by a founder-led, ambitious and entrepreneurial management team. The business has delivered impressive growth as a private company, but there is much more to come. I believe B&M has a bright future and that its listing on the London Stock Exchange will position the Company for its next stage of development.”

B&M revealed that in the year to March 29 sales surged 28% to £1.272bn and like-for-likes jumped 6.5%. Adjusted EBITDA surged 24% to £130m. And it opened 42 net stores in the period.

B&M said that since the year-end it has continued to trade “strongly” and generated record sales over the Easter period.

B&M has also appointed four non-executive directors across retail and FMCG. It has hired Carrefour director Thomas Hubner, director of The Pantry and former executive vice president of Dollar General Kathleen Guion, N Brown director Ron McMillan and Harry Brouwer, the current executive vice-president of Unilever Germany, Austria and Switzerland.

Simon Arora said: “Over recent years the UK has witnessed a sustained structural shift towards value retailing among consumers. Shopping habits have changed permanently as a result, with B&M completing about 2.7 million transactions a week. As the success of Aldi and Primark demonstrates, everyone loves a bargain.

“The team are very excited by the opportunity to grow the business even further, both in the UK and in Germany, following our recent acquisition of a majority stake in JA Woll, a transaction that presents significant opportunities particularly in sourcing, and meaningful roll-out potential.”