Geoff Archenhold’s Post

Pepco Group taking 'swift action to get Poundland performance back on track' as it takes a non-cash impairment charge of €775m https://lnkd.in/eQ88ERav #impairmentcharge #discounter #generalmerchandise #valueretail #retail #retailnews

Pepco Group taking 'swift action to get Poundland performance back on track' as it takes a non-cash impairment charge of €775m https://lnkd.in/eQ88ERav #impairmentcharge #discounter #generalmerchandise #valueretail #retail #retailnews

Morrisons suffers £22m loss amid debt pressures and sluggish sales growth https://lnkd.in/dP6v83w7 Retail’s biggest challenge is its inability to truly connect with customers. It operates in a world dominated by discount-driven consumers with minimal loyalty, as interactions are entirely transactional. Competing solely on price is a losing game unless you can create something that resonates emotionally. I hope the hospitality industry doesn’t follow this path of transactional experiences. Emotions are conveyed through food, drink, and service, making authentic connections essential for long-term success. Summary of article -Morrisons reported a fresh £22m loss for the latest quarter, despite narrowing from a £39m loss in the same period last year. - The loss was primarily due to a £110m debt finance bill, reflecting the impact of inflated debt costs and sluggish sales growth. - The losses account for Morrisons' supermarkets, convenience stores, and wholesale manufacturing, excluding revenue from the £2.6bn sale of its petrol forecourts in April. - Total debt fell to £4bn at the end of July, down from a peak of £6.2bn, partly due to a £331m ground lease sale on 76 supermarkets. - Rami Baitiéh, Morrisons’ CEO since November, is implementing a turnaround plan focused on sales growth and debt reduction, including price-matching against Aldi and Lidl. - Morrisons holds 8.5% of the grocery market, behind Aldi’s 9.9%, after being overtaken by the discounter in 2022. - Baitiéh is engaging more directly with customers and reviewing the rollout of self-checkouts, admitting it went “a bit too far.” - Sales growth for the latest 13-week period was 2.9% like-for-like, down from 4.1% in the previous period. - To improve availability and sales, Morrisons has deployed AI cameras to monitor empty shelves, enhancing in-day replenishment times and customer satisfaction.

Bumpy road forces Ackerman family to let go of control of troubled Pick n Pay after 60 years: Pick n Pay has embarked on a restructuring plan to save its market position and claw out of huge debts, with chairperson Gareth Ackerman set to relinquish control of the South African grocer that yesterday reported a reversal of fortunes into a R1.5 billion loss. As bigger rival operator Shoprite and other competitors such as Woolworths appear to be riding out South Africa’s turbulent economy, Pick n Pay is apparently feeling the pinch of a severe financial strain worsened by its breach of debt covenants. At a time Pick n Pay is seeking to close as many as 100 stores, Shoprite is growing its market share in South Africa, disclosing recently that it added nearly 200 new stores in the half-year period to end December, bringing its total to 3 543. Market analyst Simon Brown yesterday reckoned that Pick n Pay “is in trouble and needs cash” as soon as possible. In March, the board of Pick n Pay authorised the grocer to take up loan facilities amounting to R1bn with banks such as FirstRand. As at the end of February 2024, net debt in Pick n Pay had grown from R3.7bn in 2023 to nearly double at R6.1bn. The company said this had worsened its losses as a “significant escalation in interest charges, driven by the additional funding raised and an increase in underlying interest rates over the period” weighed down on profitability prospects. Pick n Pay is putting up some of its struggling stores under franchise, although analysts said there will be fewer investors interested in snapping up stores that the company failed to run profitably on its own. But with different strategies, other experts believe the stores being disbanded can be turned around. “With some store closures on the horizon, opportunity is opening up for other chain stores with more profitable business models to take that space,” said Robin Brimer, an independent management consultant. The Boxer budget chain stores, however, presented a bright spot for Pick n Pay. In fact, the company is also pursuing a strategy to place a few other Pick n Pay stores under the Boxer chain. This comes as consumers, hard-hit by inflation and elevated interest rates, are trending down to budget retailers. Pick n Pay admitted as much yesterday, saying the “under pressure consumers (are) increasingly shopping promotions” to derive some value in light of economic difficulties. The food and clothing retailer announced this year that it will be undertaking an initial public offering (IPO) for Boxer, in addition to a R4bn rights offer. Ackerman said this was the “best approach to reinvest in our company, recapitalise the business, and reduce debt” obligations. “This will enable Pick n Pay’s management to start investing back into the business for growth,” he said yesterday. The group said Ackerman Investment Holdings had…

Supermarket Income REIT PLC's (LSE:SUPR, OTC:SUPIF) first foray into Europe via the  €75.3 million purchase of 17 Carrefour stores drew some interesting analysis from the investment community. "Today's acquisition is in line with the previously announced policy of making income-accretive acquisitions whilst maintaining a robust balance sheet," said American bank Stifel, repeating its 'buy' advice. Peel Hunt said the net initial yield compared "favourably" to the REIT's existing portfolio at 6.3%, "but we note that the last UK purchase was at a higher yield of 7.5%".  It went on to point out that the property company trades on a 16% discount to net asset value and offers a dividend yield of 8.3%. Investors were told the weighted average lease term is 12 years, featuring a tenant-only break option in the tenth year. Each lease includes provisions for annual uncapped inflation-linked rent reviews,... More at #Proactive #ProactiveInvestors http://ow.ly/VEW6105rblV

BTS Loan Promotion New nationwide build to suit program highlighted below. For the highest leverage they prefer 15-year leases but will look at 10 years for lower leverage ~80%-85% LTC. Max 95% LTC constrained to 80% LTV Underwrite to 1.00 DSCR 24-month term Interest only 7.50%-8.50% (Lower the leverage, lower the rate) No prepay penalty Tenants they are focusing on: Starbucks, McDonalds, O’Reilly auto parts, chase bank, shell, 7-Eleven, AT&T, T-Mobile, Dollar General, Dollar Tree, Pilot Flying J, Wendys, Chili’s, Maggiano’s, Buffalo Wild Wings, Arby’s, Dunkin Donuts, Sonic, Albertsons, Safeway, Harbor Freight, Chipotle, Wawa, Aspen Dental, Cracker barrel, Dutch Bros, Hardees, Whataburger, Aldi, Trader Joes, Quick Trip, Chic-Fil-a, Scooters, Taco Bell. #retail #nnn #bts #loanbroker #commercialrealestate

Last month, Morrisons confirmed that it had reduced its debt by almost 40%, as the grocer pushes ahead with a host of cost-cutting measures. However, many workers and shoppers have been left unhappy with the state of stores in recent times. Its efforts to cut debts come in tandem with the grocery chain attempting to win back customers. Retail Gazette investigates whether Morrisons can successfully regain ground in the grocery sector while simultaneously cutting costs. https://lnkd.in/efi2f96p #retailnews #grocery

𝐒𝐓𝐎𝐑𝐘 𝐓𝐈𝐌𝐄 𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐲: Supermarket 𝐀𝐦𝐨𝐮𝐧𝐭: $410,000 𝐓𝐲𝐩𝐞: Unsecured Line of Credit 𝐂𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞: A local supermarket was ready to expand its operations and needed a line of credit to support the growth. The challenge? They hadn’t reported any profits on their tax returns, and with no collateral to pledge, they felt unsure if qualifying was even possible. 𝐒𝐨𝐥𝐮𝐭𝐢𝐨𝐧: We got them approved for the full $410,000 in an Unsecured Line of Credit, all from just 1 bank. No profits were required, no collateral was needed, and now they have the flexibility to expand their business with confidence. As always, our process was Easy Simple Fast. 𝐂𝐀𝐋𝐋 𝐓𝐎𝐃𝐀𝐘 𝐓𝐎 𝐁𝐄 𝐓𝐇𝐄 𝐍𝐄𝐗𝐓 𝐒𝐔𝐂𝐂𝐄𝐒𝐒 𝐒𝐓𝐎𝐑𝐘 #Supermarket #LineOfCredit #BusinessLoans #Capitalize

ASDA (again). Fiddling while Rome burns? I have to admit that I find the machinations around Asda fascinating to watch. When the end game plays out there will be a great ‘case-study’ for Business Schools to get their teeth into. Hopefully for the staff it will will be how to snatch victory from the jaws of self-inflicted trauma. The MSM has been peppered with articles from experienced commentators well, commentating, on what can feel like almost weekly upheaval. Within the last couple of weeks we’ve seen the announcement of the return of Asda veteran Allan Leighton as Chairman as his predecessor Lord Stuart Rose exits stage left. His exit is being spun as pre-planned. Yeah right. It looks to most observers that he can’t wait to get out before the possible end game sours his reputation and legacy. They say “never go back” but Mr Leighton has and I guess he sees it as a ‘shot to nothing’ - he’s a hero if he turns it round, if he can’t “it was too late anyway”. His reputation and legacy are secure anyway. He has put restoring Asda’s price competitiveness and in-store availability front and centre of his plan. As anyone would have done. However…………the businesses market share shrank from 14.8% to 12.5% under the Issa brothers and it still has around £6 Billion in debt in the accounts. And it has to repay Walmart almost a £Billion by 2028. Interest payments last year were £441 million. The commentariat’s view is that sorting out the finances is far more important than who’s in charge. One article stated “TDR’s debt-charged takeover - in tandem with petrol station tycoons Mohsin and Zuber Issa - 3 years ago has cast the chain into a form of financial purgatory with no obvious signs of escape”. Half of Asda’s debt load is at rates around 8% which means that those £millions are being diverted to banks instead of price-cuts and much needed store refurbs. Of course no-one in TDR Capital - 67.5% owners - is going to (publicly anyway) admit that a) the ‘traditional’ Private Equity model may not have been the best investment for a price-driven business at a time of increasing interest rates or b) their chosen Issa brothers were (clearly) the wrong people to run it. For the sake of the staff, none of whom are to blame for this grisly spectacle, I sincerely hope that, however much against the odds, the turnaround does succeed. Twice in my career really good businesses were brought down by huge errors by ownership and the management put into place. I see so many parallels with Asda - hence my interest. One of my current ‘interests’ has announced a major change project recently, one that will undoubtedly cause distress in a number of communities around the coast, but is grounded in new realities. I’ll share my thoughts on that one soon. 🤞Asda team members. #supermarkets #retail #changemanagement

AF Blakemore & Son Ltd’s sales declined by 4.6% to £1.2bn for the year ending 28 April 2024, with EBITDA increasing by 52% from £19.3m to £29.4m which the company put down to high-margin categories performing well and cost controls. In a company statement it put the sales loss down to the removal of a supply deal to the EG Group, which moved to Asda, as well as ‘the decline of the immediate convenience market in the UK.’ https://lnkd.in/ef26Bv4k