BLOOMS - A share beginning to grow!

2006 News Review

2006 may have seen the start of irrevocable change in the garden industry. Long-term market growth prompted by TV lifestyle programmes has stalled yet leading DIY retailers and supermarkets believe gardening will provide a better growth opportunity than their core markets. Specific problems for 2006 included a late spring, the government's clumsy use of the hosepipe ban in the face of water shortages and a poor season for garden furniture. Only the fittest will continue to thrive. The trend is towards consolidation, rationalisation and the search for greater efficiency as Gardenforum's headlines from the last year show.

Garden Centres
Look back at the stories on Gardenforum for 2006 (see relevent section on the left) and you will see that Wyevale has dominated the headlines for 2006. At the start of the year, the country's leading garden centre chain was fighting off the unwanted attentions of Laxey Partners. By the end of the year Wyevale is a private company backed by the financial might of Sir Tom Hunter and led by Jim Hodkinson, the man who made B&Q what it is today. Since taking the helm in June the portfolio 109 of garden centres has been split between a main group of larger, destination centres and a smaller group of 24 horticultural stores. Wyevale has told suppliers it will double turnover in 3 years. The tactics it uses to achieve this is likely to change the industry for ever.

The UK's second chain Dobbies realised in 2006 that they have no time for complacency with Hunter taking a threatening 5.7% of its shares. It opened its 20th garden centre at Milton Keynes in the autumn having acquired Grovelands GC in July. Two further centres at Dunfermline and Sheffield will open this year.

Country Homes & Gardens, led by former Country Gardens chief, Nicholas Marshall, bought Jacques Cann of Weybridge in July. Then, at the end of the year it doubled its size by exchanging Wyevale's 6 unwanted garden centres for 29% of its shares, some cash and a seat on its board for a Hunter nominee.

Other milestones in 2006 include: -

Klondyke added 4 garden centres with the acquisition of Garden Centres of Cheshire.
The sale of Bridgemere, the country's largest garden centre, to Wyevale.
The emergence of The Garden Store, with the purchase of its 5th garden centre, Charwood Garden Centre near Stokenchurch.
NWF Group's garden centre division bought its 5th centre, the lease of Woodford Park. Barton Grange had previously sold the freehold to La Salle, the property investment company that backs Blooms and that bought some of the Garden and Leisure Group's properties. NWF also purchased Ashton Moss Garden Centre to be reopened in the spring.
Barton Grange announced plans for a garden centre, hotel and marina development near Garstang
Badshot Lea Garden Centre was sold to Squire's Garden Centres in the group's biggest acquisition yet.
Blooms of Bressingham bought Worcester Garden Centre for £3.05m and Stevenage GC for around £2m.
Bents Garden Centre of Glazebury is building an innovative 'open skies' structure that will provide an additional 5000 sq m of undercover retail space for outdoor plants at the award winning garden centre.
Nurseries
Notcutts has rationalised production with the closure of nurseries at Bagshot and Roundpond.
The Midland Regional Growers (MRG) have launched a transport sharing scheme that the HTA believes will be a template for nurseries, in other regions, needing to reduce costs and improve service.
The HTA has secured funding to research the supply chain for ornamental horticulture. The findings will be presented to UK Growers who are losing out to more efficient importers.
Wholesalers
The pressure on traditional wholesalers showed with Decco closing depots at Widnes and Belvedere in Kent and Spread Garden Supplies closing its Norwich depot in August. Groundforce, Ireland's leading distributor of garden products, acquired the agencies and goodwill of Goulding Garden Care.

Suppliers
Consolidation of suppliers of garden products continues at an increasing pace: -
Gardman has bought Parnell Lang Enterprises which trades under the Ernest Charles banner, giving it access to high street pet stores.
Scotts has expanded its production capacity in the UK by acquiring the Lincolnshire manufacturing plant belonging to ASB Greenworld.
Haemmerlin bought rival wheelbarrow barrow manufacturer, Chillington Manufacturing.
Floramedia UK, a subsidiary of Floramedia Group BV from Holland, acquired Burall Floraprint.
Mr Fothergill's bought the mail order brands of Eastfields from the company's administrator.
Evesham Vale Propagators, a specialist conifer producer, purchased the assets of The Don Hatch Nursery.
Callaghanstone purchased the moulds and masters of the Original Stonebear Company.
Monro Horticulture made a strategic move into the retail market with the purchase of Growing Success Organics and Wessex Horticultural Products.
H&E Knowles bought M H Berlyn from the administrator of Eliza Tinsley.
The DIY & Garden Show announced in January that it had been bought by Brintex.
Grower Magazine was sold to Haymarket Publishing publisher of Horticulture Week.
Michael Timmis and Jonathan Halford completed a management buyout of Forest Garden backed by AW Jenkinson, giving it long term security that it lacked when backed by 3i.
Buying Groups continue to gain prominence: -

In March, the HART rescue plan won overwhelming approval from creditors and the buying group for smaller garden centres was saved.
There were three garden centres and a new chairman for Choice Marketing. The combined turnover for the 23 members is now £44m.
The announcement of a new buying group, The Online Gardener due to start trading in the spring.
Company Failures
Companies entering administration during the year included Roy Firmin; Allan Power Equipment; Iball (Wholesale); Andrews Garden Company; Westwoods, the Hertfordshire based importer of garden accessories, tools and Christmas goods; Eastfields, whose mail order brands include, the National Plant Club, Woolmans Chrysanthemums and the Fruit & Vegetable Company; Eliza Tinsley.

People
David Barnes, who Bought Dobbies in 1969, retired.
David Shaw, the former sales director of Gibbs-Palmer, died suddenly in October aged 62.
Neil Gow, former director of garden centres with the Byrkley Park Group, succeeded Peter Marsh as Director of GIMA on October 30.
Inga Grimsey succeeded Andrew Colquhoun as next Director General of The RHS in November.
John Wyatt, former chief executive of Scotts UK left at the end of September to become vice president at the Black & Decker.
In March, Bob Hewitt, the former chief executive of Wyevale joined Klondyke Garden Centres.
Geoffrey Smith, once described as the Geoffrey Boycott of gardening, has won the prestigious Garden Writers' Guild Lifetime Achievement Award for 2006
John Ashley accepted the Outstanding Achievement award at the last Garden Centre & Retail Awards hosted by Nexus Media.
Jeffrey Bernhard, the founder chairman of BALI in 1971 won the BALI Recognition Award

All the articles referred to are still available on Gardenforum. Select the section you want on the left of this page.

2007
Regardless of what the weather has in store for the garden sector in 2007, the rate of change can be expected to accelerate as companies react to the lack of total market growth and increasing competitive pressures.

Most interesting to watch will be the marketing and pricing strategies used by Wyevale as it seeks massive turnover growth and market dominance. Reaction from the trade and other retailers may force margins down, but the additional promotions may also rekindle some excitement and so some market growth.

The strong independent garden centre will remain strong but running a garden centre is becoming less an art and more a science. So there will be owners deciding to sell, while there are still plenty of bidders and prices remain strong.

The trend for larger suppliers to develop their own sophisticated distribution and use wholesalers less will continue. With Wyevale's threatened move to central distribution, wholesalers, most notably Solus, are sourcing and branding more from overseas manufacturers and are taking less from UK sources. 2007 is therefore going to be increasingly difficult for the small manufacturer to gain access to key garden retailers.

Small nurseries face the toughest of challenges. To be effective they need to be good growers, have efficient distribution and be sophisticated marketers. An owner/driver would be almost superhuman and in the wrong job if he or she possessed all these skills. Their lifeline should be the co-operative schemes sponsored by the HTA that pool the distribution and marketing needs of specialists nurseries and leave the grower to do what they do best - grow.

Finally, Sir Tom Hunter owns Wyevale. He also has three other garden imvestments: 29% of Country Homes and Gardens that specialises in smaller garden centres, 29% in Flying Brands, the mail order and internet retailer and he has his Dobbies stake. What will he do with these?