Founder tries to buy back Julian Graves as Baugur considers multiple bids

Icelandic giant gets more than five bids for the chain as chief executive ponders approach

Baugur is understood to have received more than five bids for the health food chain Julian Graves, following the Icelandic investment group's decision to conduct a strategic review of the 335-store retailer.

It is thought that a mixture of trade buyers and finance houses have expressed an interest in the health food retailer, which sells product ranging from goji berry seeds to almonds. Last year, market speculation linked Holland and Barrett's American owner NBTY to a bid for Julian Graves, but there is no indication they are in the frame this time around. A Baugur spokeswoman said: "We have had good interest and a number of bids already," although she declined to answer further questions.

However, it has emerged that Nick Shutts, Julian Graves chief executive, is also considering making a bid for the retailer he founded in 1987, although a bid has not yet materialised.

This week, Mr Shutts is reported to have said: "My management team and I would be delighted to reacquire the business. The management team and I are clearly discussing with Baugur how we can help them achieve their goals. I firmly believe the management team and I have the right people to take this business to the next level." Mr Shutts owns a substantial stake in the company, believed to be about 20 per cent, but it is unclear how he would structure a deal.

A Baugur spokeswoman said: "Baugur would welcome a bid from Mr Shutts." Last month, Baugur said it had appointed Deloitte to look at strategic options for the retail chain, but a sale is just one option being considered by Baugur.

Previously, Baugur – which owns stakes in high street retailers including frozen food specialist Iceland, toy retailer Hamleys, department store House of Fraser and fashion chain Oasis – has said the strategic review of Julian Graves fits its strategy at reviewing parts of its retail portfolio. This year, Baugur restructured its business by selling its media, technology and financial services units, in order to focus on its retail investments.

Baugur also owns coffee and tea specialist Whittard of Chelsea, which operates under the same holding company, Barney Holdings, as Julian Graves.

Baugur bought an 80 per cent stake in Julian Graves for £14.7m in 2003, when it had around only 200 stores but, since then, it has expanded rapidly to have 335 shops.

Julian Graves made a pre-tax profit of just £700,000 for the year ended 31 March 2007. The health food retailer's total sales jumped by 18 per cent to £61.7m for 2007 period, compared with £52.3m a year earlier. The leap in sales was a combination of Julian Graves' store expansion programme and a rise in like-for-like sales.

After making interest payments of £5.8m, Barney Holdings posted a pre-tax loss of £8.8m in the year to March 2007. However, Whittard underperformed its stablemate by posting a pre-tax loss of £3.2m over the period.

However, Baugur's decision to consider selling the health food chain has highlighted the challenges faced by small-to-medium sized retailers on the high street. It is unclear how Julian Graves is currently trading, but some industry experts believe it could be finding trading challenging, given that its product offer fits the bill of discretionary spend.

Robert Clark, senior partner at retail market analyst company Retail Knowledge Bank, said: "Under the circumstances many of those things [products] can be bought elsewhere or are not essential if consumers are looking to withdraw their horns."

Mr Clark said their products are "almost the ultimate discretionary spend," although he points out that the average spend in Julian Graves stores was just £4.30 last year, which will help it during the downturn.

However, Mr Clark believes that Julian Graves may need to temporarily put the brakes on its juggernaut store expansion programme across the UK and conduct a review of its store portfolio.

"There is a distinct danger of over expanding and having a growing proportion of under performing outlets in the portfolio," he added.

Julian Graves and Deloitte declined to comment.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links