Leo Crawford, BWG Group
It’s been a busy year so far for BWG Group.
Following a refinancing deal last November, the company had been, in CEO Leo Crawford’s words, “dealing with a lot of financial uncertainty and a lack of stability”. That all changed in August however when Spar South Africa took an 80 per cent stake in BWG, investing €55 million.
The announcement secured a further reduction in BWG’s borrowings following a buyback of existing banks’ debts. This further reduction in debt came on top of that achieved as part of a successful refinancing concluded in November 2013, which also saw BWG agree new five-year banking facilities.
But what does this all mean for the retailer with a BWG symbol hanging above the door?
Leo Crawford explained: “As far as our retailers are concerned, it is business as usual. There are no management changes, no operational changes in terms of our day to day engagement with our retailers. We do have far greater resources to grow and expand our network so we are in a much better position to support our retailers’ growth plans.
“The deal puts us in an extremely strong position; it gives us stability and it significantly strengthens our overall finances, it provides us with funds of up to €100m for expansion over five years and puts us in a great position to pursue growth opportunities across our wholesale and retail business.”
He added: “I’d go so far as to say that it is a win-win deal for everybody; it’s transformational for us. I’ve spent two to three years dealing with the financial side of the business rather than focusing on the operational side of things. The focus for us now is looking at growth opportunities and we are on longer restricted by debt on our balance.”
As if to further emphasise the point, Spar has announced plans to add 50 new stores to its network by 2016, leading to the creation of up to 1,000 new full and part-time jobs over the next two years.
The announcement was made at the Spar Retailer Convention in Killarney which was attended by more than 200 retailers from around the country.
Following the Spar South Africa deal, the funds that are now in place will be used to expand Spar’s existing retail network across the country, as well as assist existing retailers with refurbishment and expansion plans. More than €5m will be invested in a new Spar store design, launched in Spar Millennium Walkway, which will be rolled out to over 100 new stores.
Speaking to IFCR, Leo said: “We are still on track with our new stores openings across all retail brands this year but the new announcement is all about our plans for 2015/16.”
And Leo believes Ireland’s changing economic landscape is ready for this kind of growth.
“The market here is a bit like the UK; it’s very challenging and very competitive but if you look at the overall economy, for the first time since the recession started in 2008 we are seeing clear signs that a recovery is beginning to take hold.
“I would be cautiously optimistic, I think the sector is just about on the cusp of a turnaround. We believe we are in a very good position to take advantage of the upturn.”
The forecourt sector is also part of this plan and Leo believes that there are many opportunities on this side of the BWG estate too.
“The forecourt sector is strong for us as we have a strategic alliance with Maxol and this is performing very well. Maxol are a great partner and they are in expansionary mode. We have a lot of independent forecourt retailers and we see a lot of growth opportunities in this area.”
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