Wickes to unload Builders Mate
Friday 04 August 1995
Builders Mate has proved a problem for Wickes since it was acquired in 1989. Though the 100-store division initially made profits, it was hit hard by the recession and has been loss-making for several years.
The outlets have a net asset value of around pounds 35m though a buyer for the whole chain is unlikely. A piecemeal sale of branches to mangers is expected. Unwanted branches will be closed. The Hunters Timber distribution division, which made a pounds 5.5m loss last year, may also be sold though other possibilities are being explored. The deals will require a significant book write-off in the year-end accounts.
Henry Sweetbaum, Wickes's chairman, who earned pounds 1.1m last year and masterminded the deal to buy the troubled divisions, said: "With hindsight, I wouldn't have done it."
Wickes's main DIY business continues to perform well and increased UK sales by 35 per cent. Eight UK branches were opened this year taking the total to 100. Wickes plans to open nine more stores this year and 18 in 1996.
Wickes's strong UK performance contrasts sharply with more gloomy statements from other DIY retailers.Wickes now says it should soon rank behind B&Q and Sainsbury's Homebase, which took over Texas Homecare earlier this year. The loss-making Do It All business would be in fourth place.
In the six months to June group pre-tax profits increased by 3 per cent to pounds 9m on sales up 19 per cent to pounds 424m. Profitsslumped in Europe, where the Benelux stores were affected by flooding. The shares finished 5p higher at 120p.
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