Empire building – one retailer at a time
06 June 2016
Another day, another retailer group acquisition. Even if thats not strictly true, the recent flurry of activity on the acquisition front has certainly kept legal types, accountants and the media busy in the past few weeks and months. And while the likes of Marshall Motor Group and Vertu Motors may have been dominating the headlines of late, the activities of the industry big-hitters form only part of the wider story.
The cherry-picking of individual sites and small retailers operating strategically important brands has been one noticeable trend, with Jaguar Land Rover a popular choice. Its no secret that the premium OEM has been keen to further enhance its brand, and its likely that some retailers took the view that the return on any increased obligatory investment didnt warrant the commitment. Fair enough; thats resulted in rich pickings for those keen to join the JLR family or expand their existing portfolio.
And speaking of investment, what if youre a small, family-owned retailer faced with a considerable investment in property or CI if youre to stay with a particular brand? If youve reached your productivity limit for your territory – think rural customer base – but theres pressure to invest, maybe its time to develop an exit plan? Younger, more energetic management could view the business with fresh eyes, and be happier to shoulder the increased financial burden.
While you could be forgiven for visualising a white knight rushing to your aid and delivering a risk-free, fairytale ending, theres more than a grain of truth in the prospect of larger, financially more capable retailer groups building their empires one showroom at a time. Expect more to come as some of the smaller guys do the maths and plan for a civilised exit.
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