Empire building – one retailer at a time

  06 June 2016

Another day, another retailer group acquisition. Even if that’s 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. It’s no secret that the premium OEM has been keen to further enhance its brand, and it’s likely that some retailers took the view that the return on any increased obligatory investment didn’t warrant the commitment. Fair enough; that’s resulted in rich pickings for those keen to join the JLR family or expand their existing portfolio.

And speaking of investment, what if you’re a small, family-owned retailer faced with a considerable investment in property or CI if you’re to stay with a particular brand? If you’ve reached your productivity limit for your territory – think rural customer base – but there’s pressure to invest, maybe it’s 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, there’s 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.

Iain Dooley

Editor, Agenda

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