Peacocks displays growth with TFS buy

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The Independent Online

Peacock Group, the budget clothes retailer, yesterday bought The Fragrance Shop, the discount perfume chain, giving its founder a £14m windfall.

Peacock Group, the budget clothes retailer, yesterday bought The Fragrance Shop, the discount perfume chain, giving its founder a £14m windfall.

Bill Currie, who started TFS in 1995 in Liverpool, owns 94 per cent of the business but will stay on as part of the enlarged Peacock group after the acquisition. Peacock issued £5.65m of shares to help finance the £15m buy, the rest of which has been paid in cash. The chain, which had sales of £9m last year, has 29 outlets, but Peacock has ambitious expansion plans to open 150 shops over the coming years.

Keith Bryant, the finance director, said TFS would bring another high growth market to the group. "We know the Perfume Shop has worked well for the Merchant Retail group and this was an opportunity to buy a similar company with the management in place," Mr Bryant said. "TFS sells to the same customers as Peacock's and they trade in the same shopping centres. There are lots of opportunities for us to make synergies between properties."

The news of the acquisition came as Peacock reported a leap in annual profits of 56 per cent to £36m, ahead of City expectations. Like-for-like sales over the period were up 3.5 per cent, and like-for-like sales in its core outlets were up 5.8 per cent over the year. Operating profits here were up 60 per cent to £24m.

Shareholders were pleased with Peacock's growth in what are difficult conditions for high street fashion retailers, and the acquisition of TFS. Shares in Peacock's yesterday rose nearly 6 per cent to close at 220p. "The acquisition of TFS takes Peacocks into a strong growth segment in the high street. The group looks well positioned in a tough market," analysts at Williams de Broe said yesterday.

"We have been increasing our focus on fashion, improving the quality of goods in our stores, and improving our stock control," Mr Bryant said. The company, which also owns the Bonmarché brand targeted at older women, said it had opened 81 new stores and plans 50 new Bonmarché outlets this year. Like-for-like sales in Bonmarché were down over the year, which the company blamed on high comparative figures for the previous year when substantial stock clearances took place. Operating profits in Bonmarché, however, were up nearly 40 per cent at £16m.

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