This week's retail news 'you may have missed'.....
At mdj2, we’re passionate about retail and always looking to share our news, views, and insights. With so much information out there, we wanted to share just a small selection of retail news headlines from last week that we found interesting…?
?Tapi confirms acquisition of Carpetright’s brand and 54 stores, but more than 1,000 jobs lost.
Carpetright’s biggest rival Tapi has snapped up the chain’s brand and more than a fifth of its stores out of administration.
The?flooring retailer?has acquired Carpetright’s intellectual property, two warehouses and 54 of its stores, which Tapi said will save 308 jobs and “expand [the business] into a number of areas we don’t currently serve”.
However, the deal will result in 1,018 job losses across Carpetright’s head office in Purfleet and its remaining 218 stores across the UK.
Administrators at PwC said it will?retain employees at the company’s head office for a short time to support in winding down operations.
Tapi, which was founded in 2014 by Martin Harris, the son of Carpetright founder Lord Harris of Peckham – who is also a shareholder, said it will temporarily close the 54 stores for a couple of days whilst it updates the ordering, telephone lines and email system, which will all be out of action until they re-open.
The retailer said that saving the entire business was “unviable” as Carpetright had been materially loss making for a number of years and had racked up “significant debt”. It added it had been mindful of how the Competition and Markets Authority (CMA) would view a larger deal.
Tapi managing director Jeevan Karir said: “Our goal, initially, was to try to save all of Carpetright. However, as we looked into the details of the situation, we quickly established that saving the entire business was unviable.
“The business has been materially loss making for a number of years and it has significant debt held by the owner.
“We then turned ourselves to trying to save a number of stores whilst being mindful of how the Competition authorities would look at any deal. So, we arrived at 54 stores and two supporting warehouses. All of which are exceptional and that we’d be proud to have as part of the Tapi family.”
PwC joint administrator Zelf Hussain added: “Carpetright has fallen victim to challenges facing many retailers, especially those selling big ticket items. A mixture of factors, including a big reduction in consumer spending due to cost-of-living pressures, lower home sales and a debilitating cyber-attack made it impossible for the business to continue in its current form.
“The sale of some stores and the brand to Tapi has allowed over 300 jobs to be saved and gives the Carpetright brand the chance to continue and flourish under its new ownership.
“However, it is deeply saddening that for the remainder of the workforce there will be redundancies. We are committed to helping those affected and will make sure redundancy claims are processed as quickly as possible. In collaboration with Tapi, we will assist in efforts to help individuals find new jobs elsewhere.
“We know this is an uncertain time for many of those affected and want to thank all the staff for the support they have given the company in these difficult circumstances.”
Carpetright?hired PwC to find a buyer?for it earlier this month as it struggled with?increased competition and a slowdown in demand.
The flooring specialist filed a notice of intention to appoint the firm as administrators the same week as it sought a “period of protection” whilst it works to finalise additional investment to secure the long-term future of the company.
Tapi is understood to have been the only company to submit an offer that involved rescuing both jobs and stores – other options included liquidating the business entirely.
?Homebase owner to launch sale amid interest from The Range.
Hilco Capital, which rescued the DIY retailer in 2018, is to kick off a formal process as talks take place about a deal with one of Britain’s leading retail tycoons, Sky News learns.
The owner of Homebase is in talks about selling the DIY retailer to one of Britain’s biggest general merchandise chains, as it prepares to launch a wider auction of the business it rescued six years ago.
Sky News has learnt that Hilco Capital, which took control of an ailing Homebase in 2018, has had an approach from The Range, which has quietly become one of the country's biggest retail successes, about a deal.
City sources said the discussions were not certain to lead to an agreement, but analysts suggested that if they did, The Range was likely to want the bulk of Homebase's roughly-140 stores.
A formal sale process encompassing other potential bidders is expected to get underway in the coming days, according to one insider.
Hilco acquired Homebase following a disastrous spell under the ownership of Wesfarmers, an Australian group, during which it lost hundreds of millions of pounds.
Other retailers touted in the past as potential bidders for Homebase include B&M European Value Retail, the London-listed discount retailer.
The DIY chain has had a nomadic existence, being owned at various points by J Sainsbury and then coming under common ownership with Argos as part of Home Retail Group.
Wesfarmers' foray into the UK proved an unmitigated failure, leading to Hilco - which has owned retail brands such as HMV and Cath Kidston - taking control.
In 2018, Homebase went through a company voluntary arrangement which closed a substantial number of stores, renegotiated rent deals and about 1500 job losses.
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The turnaround investor succeeded in stabilising it, but saw its fortunes impacted by the pandemic and subsequent cost-of-living crisis.
An initial surge in sales when COVID-19 hit as consumers focused on home improvement gave way to choppier market conditions.
However, Homebase lost more than ￡40m in 2022, according to accounts filed at Companies House, although last year's performance is understood to have been significantly better.
As well as its operations in the UK, Homebase has a presence in Ireland, with the two divisions potentially being sold separately.
Based in Devon, The Range is part of CDS Superstores, which is controlled by the businessman Chris Dawson.
Last year, it paid ￡7m to buy the brand and intellectual property assets of Wilko, which had collapsed into administration.
Since then, Mr Dawson has opened a string of new Wilko outlets.
The Range trades from more than 200 outlets across Britain selling homewares, furniture and DIY products.
Mr Dawson opened its first store in Plymouth in 1989.
Nicknamed 'the Del Boy billionaire' because of the distinctive numberplate on his Rolls-Royce Wraith, he has become one of Britain's most successful retail entrepreneurs.
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Hilco and Homebase have been contacted for comment and The Range could not be reached for comment.
?WH Smith to take on Greggs and Pret by selling hot food.
WH Smith is set to put hot food on sale as it competes with?Greggs?and Pret a Manger. The chain wants to add hot food options for shoppers after introducing an own-label range of sandwiches in May.?
The menu is likely to include breakfast items such as bacon rolls and porridge, as well as baked items like sausage rolls and pasties. The company said it has seen “record weeks” for food sales since the launch of the Smith’s Family Kitchen range of 34 products, mainly sandwiches, in May.
Managing director, Andrew Harrison, told?The Grocer: “We don’t have as much of a cohesive breakfast offer as we’d like, and we know that that is a really important day part.” He said the retailer is in the “early days” of the process of working on the hot food options.?
Mr Harrison said: “Over the next couple of years, we’ll be starting to dial up some of those options. The next year for sure is about optimising what we’ve got.”
Its high street stores have come under?fire?in customer service surveys conducted by Which? However, in recent years, the firm says it has worked to transform itself into a “one-stop shop for travel”.
It has more than 600 stores in travel locations like railway stations and airports, as well as?hospitals. Mr Harrison said travel now accounts for 70 percent of the group’s total sales, with food and drink featuring in at least half of baskets.?
In the past the chain has offered a range of meal deals made up of third-party brands. A move to offer its own menu is the next logical step, Mr Harrison said.
The retailer is also working with partners to expand its range. This includes selling new lines of sport nutrition products under the Myprotein brand.
The move by WH Smith to extend its food offer comes after both Pret a Manger and Greggs increased the number of outlets located in airports and railway stations over the past couple of years. Mr Harrison said: “Don’t get me wrong.
"We’re not talking about becoming a sort of fast-food outlet - it’s just trying to broaden the range of options we can offer our customers. Just over 10 years ago we didn’t sell food, we now do 11 million meal deals a year.
"We sell 80,000 different combinations of product in our meal deals every week. That’s the scale we’ve got to.
“As we look forward, we just want to continue to make sure we understand what our customers’ requirements are and fulfil those needs.” The retailer was among a number of food and drink retailers affected by the E.coli outbreak in June, after supplier This recalled a batch of its chicken & bacon wraps.
?Holland & Barrett opens first London ‘H&Bean’ café concession.
Holland & Barrett is trialling its second H&Bean café concession at its London Victoria Street store.
The new addition follows a successful trail of the takeaway service at the health and wellness?specialist’s?Birmingham flagship, which launched in November.
From today, customers are able to order a range of new unique signature organic tea and coffees with added vitamins and health and wellness ingredients, focusing on supporting gut health, mental focus, energy and immunity.
These include drinks such as ‘Calm Latte’, which combines matcha, coconut milk, ashwagandha and vitamin B3 to support energy levels, and reduced tiredness and fatigue.
Holland & Barrett head of food and beverage development, Rachel Chatterton said: “Our team of experts have been hard at work to bring to market a unique range of drinks with benefits that’s backed by science and nutrition.
“With the healthier coffee market growing, we’re excited to bring this new offering to the market as an on the go drinks option for customers.
“This also offers a great entry point for our customers to trial products and experience their benefits, with all ingredients used in the new range available to be purchased for use at home.”
Earlier this month,?Holland & Barrett revealed it had partnered with Next?and opened new “store within a store” concessions at three of the high street retailer’s stores.
The move will allow customers to shop from up to 1,000 of Holland & Barrett’s top products across health, sports nutrition and beauty, as well as access personalised advice from instore staff.
?Pret a Manger to end free coffee subscription model.
Coffee?chain?Pret a Manger?has announced it will end its current subscription model, which entitles customers to five free coffees per day.
From September,?Pret?Club subscribers will pay ￡10 monthly, a third of the original price, but will get 50% off up to five barista-made drinks, compared with free coffees under the current subscription.
Pret will also discontinue its current 20% discount on food for subscribers, which created a dual pricing system in store.?The chain said the latter was a solution Pret?“never really got comfortable with”.
Current subscription benefits, giving customers free coffee for ￡30 a month, will end in September.
Pret UK&I managing director Clare Clough said the new measures were introduced in a push to “focus on better value for everyone”.
“It’s almost four years since we introduced our coffee subscription at the height of the pandemic, and I’m proud of the role Club Pret has played for us and our customers since,” Clough said.
“We know this is a change. But with Club Pret subscription, our drinks will continue to be the best offer on the?high street, and at a much more accessible price than the ￡360 a year people have to pay for the current scheme.”
During the switch,?existing Club Pret subscribers will be able to pay ￡5 per month for the new subscription until 31 March 2025.
The chain has also announced its filter coffee and all butter croissant items will drop in price to respectively 99p and ￡1.99 to reflect the “commitment to providing better value for all our Pret customers”.
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