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RNS Number : 2647Q
Dunelm Group plc
28 November 2016
28 November 2016
Dunelm Group plc
Proposed Acquisition of Worldstores, Achica and Kiddicare
Dunelm Group plc ("Dunelm" or the "Company") announces that,
through a wholly owned subsidiary, Globe Online Limited ("Globe"),
it has today reached agreement to purchase the assets of the WS
Group for a total consideration of GBP8.5m.
The WS Group consists of Worldstores Limited ("Worldstores"),
Worldstores Kiddicare Limited ("Kiddicare") and Achica Limited
("Achica").
The WS Group currently generates annualised revenue of c.GBP100m
and has c.650 employees. Worldstores, which was established in 2008
by founders Richard Tucker and Joe Murray and is the biggest part
of the WS Group, is one of the UK's largest online retailers of
products for the home and garden. There are over 500,000 products
on the site. Worldstores has built a proprietary technology
platform that manages suppliers and enables rapid cross-docking of
stock directly from suppliers to customers so that customers can
have next day, or day of choice, delivery. Much of the product
requires 2-man delivery.
Achica is a members-only online store offering furniture,
homewares and accessories, often at significant discounts to RRPs
for limited periods through flash sales. Kiddicare is a
multichannel retailer, selling nursery supplies and merchandise for
children and young families.
John Browett, CEO of Dunelm, commented: "We are excited by this
opportunity to accelerate the growth of our internet operation,
more than doubling its size, and enhancing our position as the
destination Homewares retailer in the UK, both online and offline.
Between the store network, broad product range and strong brand
that Dunelm has built and Worldstores' extensive homewares and
furniture offer and unique platform for next day delivery and flash
sales, we will strengthen our leading position as the UK's Home of
Homes."
Richard Tucker and Joe Murray, Worldstores' founders, commented:
"We're delighted to be working with Dunelm, in whom we have found a
partner who shares our vision for our company and brands, and is
backing our ambitious plans for growth."
The WS Group management, including the founders, will continue
to run the WS Group and will be appropriately incentivised.
All three propositions complement Dunelm's existing offer.
Furthermore, Worldstores provides an extensive furniture range and
a unique technology platform which will provide Dunelm with
additional benefits. Dunelm will also be able to improve
performance by sharing product ranges, harmonising terms and
extending the multichannel delivery proposition, the benefits of
which Dunelm expects to be in the region of GBP10m per annum over
the short to medium term.
The Company plans to inject up to GBP15m into WS Group to fund
historic working capital and to manage disruption for suppliers and
customers. Dunelm will also pay c.GBP3m of ancillary and
transaction related costs which are expected to be identified
separately in the Group's accounts.
The Board currently expects that in Dunelm's financial year
ending 1 July 2017, from the date of acquisition, the WS Group will
incur trading losses of around GBP5-10m. In Dunelm's financial year
ending 30 June 2018, the first full year of ownership of the WS
Group, it is expected that the WS Group will be at least
break-even.
The acquisition is subject to each of the companies in the WS
Group being placed into administration and the Company expects to
acquire the WS Group businesses later today from the intended
administrators, William Wright and Robert Croxen of KPMG LLP.
ENDS
There will be a conference call for sell-side analysts this
morning at 8am. For dial-in details please contact Gina Bell at MHP
Communications on dunelm@mhpc.com.
For further information, please contact:
Dunelm Group plc 0116 2644439
John Browett, Chief Executive
Keith Down, Chief Financial
Officer
MHP Communications 020 3128 8100
John Olsen/Simon Hockridge/Gina dunelm@mhpc.com
Bell
Notes to editors
The WS Group
Worldstores acquired the Kiddicare business in 2014 and the
Achica business in 2015. The Worldstores Group has approximately
650 employees and offices in London and Peterborough as well as one
store in Peterborough.
In the year ending 31 January 2015, the latest year for which
audited accounts have been published, gross assets were GBP42m (or
GBP21m excluding cash) and the WS Group delivered a loss before tax
of (GBP6.5m), including negative goodwill of GBP7m, with an EBITDA
loss of (GBP5.0m).
Dunelm
Dunelm is the leading homewares retailers in the UK with 160
stores nationwide and an online webstore at dunelm.com. It has over
9,000 employees. Dunelm's headquarters are in Syston,
Leicestershire.
Dunelm offers customers a wide range of quality homeware items
from bedding, sofas, curtains, cushions, quilts and pillows, to
kitchenware and dining, lighting, wall art, furniture and rugs, as
well as premium brands such as Dorma and Fogarty and in-house
production of made-to-measure curtains and blinds.
Dunelm was founded in 1979 as a market stall business, selling
ready-made curtains. The first shop was opened in Leicester in 1984
and over the following years the business developed into a
successful chain of high street shops before expanding into broader
homewares categories following the opening of the first Dunelm
superstore in 1991.
In the year ending 2 July 2016, the latest year for which
audited accounts have been published, gross assets were GBP346m and
the Dunelm Group delivered a profit before tax of GBP129m, with
EBITDA of GBP154m.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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