B&M getting global supply chain in shape as sales soar

UK general merchandise retailer B&M’s performance in its home market is going from strength to strength, and it continues to focus on supply chain revamps in its burgeoning international business.

A trading statement covering the period between 31 March and 29 June 2019, reveals group revenue was up 21.4% year-on-year to £967.7 million. While B&M UK sales were up by 13.8%, Jawoll in Germany edged up 1.9% to £63.1 million and in France Babou revenue was £72.6 million.

There was no sales comparison given for Babou, which was only acquired by B&M in October 2018, but the group said there was a declining performance in clothing there. Indeed, B&M spoke of expected supply chain issues in Germany and France holding back progress in those territories.

Simon Arora, CEO of B&M, commented: “The group has made a solid start and we are on track with our plans for the year as a whole, with a strong performance in the B&M UK business and continued implementation of our planned change programmes in Germany and France, with a continued focus on resolving the warehousing and logistics challenges in Jawoll.”

In France there has also been on-going clearance activity ahead of the introduction of B&M supply chain sourced products to the newly acquired Babou business.

The company said around 40% of the new product ranges sourced from the B&M supply chain in China have now been launched by Babou, but the remaining lines due to arrive over the second quarter, which is intended to reduce Babou’s reliance on clothing.

Some 12 new B&M UK fascia stores opened in the quarter and one relocated, and it joins the limited list of retailers in physical retail growth mode, which includes The Works and Joules, with 45 net new stores expected to open in the financial year.

B&M said it has experienced solid like-for-like sales growth and six new stores have opened in the quarter by its value convenience store chain, Heron Foods, which continues to trade well. Total revenue there was £93.1 million.

“The transitional changes to the product offers in Jawoll and Babou are now taking shape, as we apply the B&M model to those businesses,” explained Arora.

“We look forward to the remainder of the year with confidence."

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