Post on 28-Feb-2020
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Pre-seen analysis
P plc
Note: The enclosed document in no way indicates what is likely to be
examined within the un-seen information on exam day.
Contents
Page 2 - E3 Tips and Guidance
Page 5 - F3 Tips and Guidance
Page 8 - P3 Tips and Guidance
Page 10 – Industry Information Exam Timetable
May 2014 Exam sitting
Tuesday 20 May
Wednesday 21 May
Thursday 22 May
Morning session
9:10am to 12:30pm
E3 Enterprise Strategy
P3 Performance Strategy
F3 Financial Strategy
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E3 Tips and guidance
Guidance and tips for Section A
The two pages of un-seen information on exam day can produce many ‘parallel
universes’ in the context of a scenario setting, so it is important to keep an open
mind. The two pages of un-seen information on exam day will often divide itself into
different sections of scenario information, which will appear in the same order that
the Section A requirements (a), (b), (c) etc. appear. This makes it easier to focus on
the different the parts of scenario information when applying yourself to each
requirement.
Clearly the basic essentials of good time keeping, answer planning and more
importantly APPLYING your discussion RELEVANTLY to the un-seen information
and addressing each requirement FULLY will be essential if you are looking to pass
E3. Study your E3 syllabus well and know your pre-seen information on exam day
because you may have to refer to it.
P plc operates B2C e.g. retail outlets and B2B e.g. direct sales units. It started as a
manufacturing company and has since become listed and diversified into distribution
and retail. It is a UK listed company, has acquired companies in Europe and the
USA and has divested all of its manufacturing business units.
The pre-seen information gives corporate values on page 2 and these values are
qualitative and include ethical and social responsibility aims. On page 4 of the pre-
seen there are strategic objectives aimed at improving shareholder value which are
economic rather than social. The CSR aims of P plc are also included on page 5 of
the pre-seen. A possible scenario on exam day could include the assessment of the
suitability of a strategic option with any of these aims or objectives.
If the values, aims or objectives of P plc are to be judged against a strategic option,
remember to consider fully all of them that is required, many candidates are not
picking up full marks due to aims or objectives viewed as ‘neutral’ and so say nothing
and so are awarded no credit.
The pre-seen information also mentions a centralised treasury function, another
scenario on exam day could be to evaluate shared service centres or the divisional
structure of this group, there seems to be synergy in merging at least some of the
operations of the plumbing and buildings divisions to reduce cost and duplication e.g.
logistics, transportation, distribution networks, distribution warehouses and possibly
direct sales or retail units.
Page 4 of the pre-seen also mentions the inefficiency of logistics within the supply
chain e.g. some products P plc sources from Africa and Asia, cross the world to P
plc warehouses and then back again to Africa and Asia. The T4 Case Study exam
(May 2010, page 21-22 of its pre-seen) has a good scenario with an NPV to practice
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for a strategic option to open a new distribution centre, this can be downloaded from
the CIMA website or please do ask for a copy. P plc divisions do distribute to other
parts of the world e.g. Africa and Asia, so it could be a good scenario to get some
practice. E3 May 2011 (question SA 11 in the Acorn exam practice kit) also includes
relocation of a UK Division as a strategic option to evaluate. A P6 May 2007 exam
question (C16 in the Acorn exam practice kit) is also a good question to examine a
strategic option for a pharmaceutical manufacturing company considering a proposal
to outsource its transportation function.
Other tips for section A
Normally up to 10% maximum for calculations within Section A
Shareholder value analysis.
Evaluation of the suitability of P’s existing organisational structure.
Evaluation of an acquisition for market development and identification of issues to consider, in some cases for P, newly acquired businesses have underperformed.
Evaluation of opening a new distribution centre in another part of the world as a strategic option based on quantitative and qualitative criteria.
Evaluation of ‘virtual warehousing’ as a strategic option.
Customer or product profitability analysis for either the plumbing or building division e.g. products, customer types or retail outlet/direct sales units as sales channels.
Strategic supply chain management.
Benchmarking internal performance e.g. in different countries, advice on improving operating efficiency based on quantitative and qualitative criteria.
Strategic options generation e.g. using Ansoff’s product/market matrix.
Business unit performance and appraisal, including transfer pricing, reward systems and incentives.
CSF/performance indicators based on the industry for plumbing or building
supplies.
The CIMA code of ethics, business ethics and CSR related scenarios, perhaps ways of improving responsible business practice
Relationship marketing e.g. direct sales units or retail outlets. Tips for section B
Each section B question normally examines at least one model or theory.
Very rarely are calculations tested within section B.
Change management and theories.
IT/IS strategy.
Cultural analysis and advice.
Stakeholder management or Mendelow’s matrix.
Ansoff’s strategic options.
Porters Generic Strategies.
BCG Box.
CSF/performance indicators
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Balanced Scorecard.
Evaluation of performance systems recommendation of controls, changes or improvements.
Evaluation of strategic options and recommendations.
Visioning tools such as scenario planning or long range planning tools such as gap analysis.
E3 syllabus areas which still have not been tested
Real Options as a tool for strategic analysis. Note: Complex numerical
questions will not be set.
Game theoretic approaches to strategic planning and decision-making. Note:
Complex numerical questions will not be set.
The implementation of lean systems across an organisation.
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F3 Tips and guidance
Chairman’s statement on P plc’s strategic objectives P plc’s Chairman has declared three strategic objectives for the company which all combine with the aim of improving shareholder value. These three strategic objectives of P plc are:
To be the market leader in the regions of the world in which it operates; To deleverage the company by disposing of business units or individual retail
outlets which do not contribute sufficiently to the aim of P plc becoming market leader or arefailing to meet minimum performance targets;
To continuously strive to improve its products and customer services. Corporate Responsibility Aims P plc aims to provide excellent customer service across its two divisions. This excellence in customer service is underpinned by its:
provision of high levels of staff training and development, with strong concentration on safety management;
adherence to the highest ethical standards both internally and with respect to supplier relationships;
concern to cause the least environmental damage possible within its operations in terms of emissions, waste management and recycling activities by employing environmental performance management methods;
promotion of product integrity through selling only safe and reliable products which are of the required standard of quality and partnering with key suppliers.
Strategic developments P plc aims to increase its market share by making repeat sales through its external direct sales units and retail outlets to existing customers and attracting new customers away from competitors. It places customer service as its key critical success factor. The Board is constantly seeking improvements in the company’s logistics particularly in sourcing products and their delivery to its external direct sales units and retail outlets wherever they are in the world. It is actively considering acquiring logistic resources in parts of the world where it does not own warehousing and distribution facilities at present and also pursuing the concept of virtual warehousing by which its external direct sales units and retail outlets will still place their orders with P plc but will obtain their supplies directly from the manufacturer. Other areas of strategic development concern reviewing the life expectancy of its products so as to give greater value for money to final customers and benchmarking its performance in different countries in order to improve operating efficiency.
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Other key aspects
90% of the shareholders are institutional investors, so any course of action by P plc will impact these shareholders. Maintaining good relationships with these investors is imperative.
Comparisons of the two divisions:
Total Plumbing & Heating Building materials £m £m % £m % Revenue 13877 7040 51% 6837 49% Operating profit 447 234 52% 213 48%
NCA Intangible assets 1748 781 45% 967 55% PPE 1326 597 45% 729 55% Trade & other 135 65 48% 70 52% CA Inventory 1784 930 52% 854 48% Trade & other 2127 1075 51% 1052 49%
The financial statements show bank loans of £1,000 million and short term borrowings of £202 million. The refinancing of these will require consideration.
F3 guidance There is a strong hint of divestment with the strategic objectives as any business units or retail outlets will be disposed if they don’t meet their targets. There are also suggestions of acquiring logistic resources in Asia and Africa, so cost benefit analysis of this will need to be undertaken (investment appraisal)
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F3 May 201 & September 2014 exam paper predictions for P plc
Numerical aspects
Business valuation. The main methods of valuation would be required (net assets, dividend valuation model, earnings based, discounted cash flows). Foreign exchange rates will be an aspect, so forecast future exchange rates and discounting cash flows using the various exchange rates forecast could be examined. Any new retail outlets acquired will require negotiation with the other parties so various forms of bidding, share for share exchange and integration issues may be examined.
Investment appraisal. The relevant cash flows will need to be discounted using the appropriate discount rate (perhaps calculation of WACC or using CAPM – un-gearing and gearing betas). There will be different risks associated with Asian and African economies so a risk adjusted discount rate and forecasting forward exchange rates may be examined.
Financing. Additional financing in the form of equity or debt will require consideration including all the issues relating to stock markets as P plc is a listed company. As 90% of the shareholders are institutional investors P plc will have to convince these shareholders for more equity finance or do a new market issue to new shareholders. P plc is currently 29% geared (GBP£1000m / GPB£3471m) All the advantages and disadvantages of various forms of financing need to be considered. Comparisons between the different methods may also be examined
Lease versus buy. Leasing assets may be viable and cheaper option then purchasing outright.
Forecasting. Forecast data may be given for a particular investment and the impact of this on the overall financial statements may be examined
Efficient management of working capital can release cash flows which enable the company to release cash for any financing short falls in the future. The efficient management of working capital is crucial for P plc as it has significant working capital.
Treasury function, the advantages and disadvantages of setting up as a centralised or decentralised department.
Discussion aspects
The various types of financing available and their advantages / disadvantages.
Project control and implementation. Role of treasury department and other organisations in terms of raising long
term finance. The impact on the public and other stakeholders with the particular course of
action taken. Incorporating real options in investment appraisal. The use of appropriate discount rates (WACC, CAPM) in public sector
organisations. Identifying the major risks (PEST analysis).
Whatever the numerical aspects of the question are, you must discuss whether the strategic objectives and corporate responsibility aims of P plc will be met.
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P3 Tips and guidance
Reputation risk
P plc has a strong and long established reputation in distributing plumbing, heating
and building materials and it is important that they maintain this. There is a risk that
this may be harmed due to the acquisitions they have made which may have an
inferior reputation for quality and service compared to P plc, thereby bringing the
business valuation of P plc. This is demonstrated by the high levels of goodwill that
have had to be written off on businesses acquired.
P plc should carry out a careful due diligence on the target acquisition to ensure that
it is a company that has a good reputation for quality and service in the area.
Non-executive directors’ risk
It is not known what the skills and experience are of the 6 non-executive directors on
the Board of Directors, and so they may not be able to contribute in challenging the
decisions made by the executives. In addition we also do not know if there is any
kind relation between them and the executives such as husband, wife, son or
daughter relations. This would mean that the non-executives are not truly
independent if this is the case.
We would need to investigate the current non-executives to see if they have
adequate skills and experience and are independent. P plc needs to select
appropriate non-executives which have the skills, experience and are also
independent of the business and executives. This could be done by setting up a
Search Committee who will be tasked to find such appropriate individuals.
Scalar chain risk
There is a risk that there are too many layers of management in the USA, as the
Senior Executive Team (SET) appear to duplicate the same role as the Divisional
Executive Management Team (DEMT). This may mean that there are higher salaries
paid which are not necessary, slower communications through levels of
management, and remoteness of senior management from the operations.
There is also the opposite risk with operations in the UK, as they do not have an SET
which may be necessary to ensure smooth management of operations.
There should be a detailed analysis of the operations in the USA and UK to
determine whether an SET is needed. This analysis should focus on the main areas
that need to be managed in the UK and USA and how best they can be run to meet
the main objectives and targets in the business.
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Financial institution risk
90% of the share capital is owned by financial institutions and so there is a risk that
the Board is mindful of this and may make decisions that they may principally benefit
them rather than the business, for example acquiring businesses to quickly create
high returns which is want financial institutions may be seeking, but this may be a
reckless approach as these acquisitions may not complement the main strategy of
the business.
It is important that the Board is clear in its strategy and how it intends to achieve it
through sustained growth and value creation, and that it is communicated to
shareholders. Non-executives must scrutinise and challenge decisions made by the
Board to ensure that they are in the best interest of the business.
Company takeover risk
The share price has been vastly volatile in the last year, ranging between £9 and £6
a share. There is a risk that there may be little market confident in P plc by the
market and this may make it susceptible to takeover bids, despite the increase in
dividends by 20%.
It is important that the company has the confidence of the market by ensuring that
they have a sound strategy in place, demonstrating investments in projects which
have yielded good returns and also unveiling new projects which have a good
chance of achieving targeted forecast returns.
Corporate Responsibility Aims and environmental risk
Some products that are sourced from suppliers located in Asia and Africa, cross the
world, are stored in warehouses and then cross the world again to be delivered to
their destination in Asia and Africa. This bears a huge impact on the environment in
terms of increased C02 emissions by P plc contributing to global warming. This also
means that there are extra costs in transport borne by P plc unnecessarily.
There is a risk that P plc will not meet their Corporate Responsibility Aims as one of
them is causing the least environmental damage possible within its operations in
terms of emissions.
P plc needs to review their logistics operations of transport of goods and ensure that
products are not shipped across the globe unnecessarily. They should ensure that
there are reward incentives in place given to warehouse managers and suppliers to
ensure that this is managed actively.
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Industry Information
Jewson
With over 600 branches across the country, Jewson is the UK's leading supplier of
sustainable timber and building materials. The first Jewson branch opened in 1836 -
for over 176 years we have been supplying building materials and supporting the
trade.
Jewson offers the widest range of quality materials and products from everyday core
essentials to the latest sustainable innovations - Jewson's friendly and
knowledgeable staff continue to provide the highest levels of customer service. In
addition to timber and building materials, Jewson also has specialist landscaping,
joinery, insulation, tool hire, brick, kitchen and bathroom centres up and down the
country.
Jewson is a Saint-Gobain brand so it’s part of one of the largest construction
businesses in the world - designing, manufacturing and distributing construction
materials, and delivering innovative products and services with tomorrow in mind.
Developed by Jewson and its sister brands, Greenworks have grown to become the
UK's recognised authority and market expert in sustainable building products and
solutions.
Greenworks provides you with in-depth advice and support on the range of
sustainable building solutions available in the marketplace, including renewable
energy products. As well as being an authoritative voice on the green agenda, we
also offer unbiased training and consultancy.
Greenworks is integral to Jewson in the delivery of renewable and sustainable
solutions to our customers.
Greenworks is at the heart of Jewson's commitment to a more sustainable
future.
Greenworks is central to Jewson supporting cutting edge brands and supply
partners.
Greenworks is at the core of Jewson's expertise in training and development
of sustainable solutions.
Greenworks Training Academy
The Greenworks Training Academy provides multi-disciplinary courses to enable
Jewson customers to develop their knowledge and skills around the sustainability
agenda. This centrally located academy offers a suite of industry relevant training,
allowing customers to learn about new products, enhance existing skills and acquire
new ones. Courses will be scheduled in line with customer demand and changes to
legislation, product and market drivers.
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Greenworks Learning Gateway
The Greenworks Learning Gateway gives Jewson account customers the
opportunity to access e-learning modules on a range of sustainable products and
solutions, renewable technologies, market drivers and legislation updates. It also
gives information on current promotional activity and relevant e-learning that might
support them. This offer is now available from the Greenworks Learning Gateway,
and is an additional service to help educate and train, within this ever changing
marketplace.
http://www.jewson.co.uk/about-us/
Jewson is one of the largest chains of British general builders' merchants, selling to
small and medium building contractors and the general public with over 600
branches across the country. Jewson, as part of the Meyer group, was acquired by
the French conglomerate Saint-Gobain in April 2000.
Fraud
On 14 May 2008, it was reported that Jewson had dismissed two members of staff
and contacted police after an internal investigation revealed evidence of an alleged
£1m fraud at the firm.
Sales director Tony Newman and another unnamed employee had left the firm,
following claims of irregularities in the company's books.
In a statement Jewson said: "We can confirm that following an investigation by our
internal audit department Tony Newman was dismissed from his role as sales
director, on 18 April. In addition, one other person, who had been employed by
Jewson for less than two weeks, has been dismissed as a result of our internal
investigation. This matter, which relates to the fraudulent supply and procurement of
marketing services, has now been passed to the police who are conducting a
detailed investigation with our full cooperation and support."
On the 2nd April 2012, before Birmingham Crown Court, the case against Tony
Newman was dropped, when the prosecution offered no evidence against him and
he was acquitted of all charges.
http://en.wikipedia.org/wiki/Jewson
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Travis Perkins
Travis Perkins have been supplying building materials to the trade for over 200 years
and we are now one of the largest suppliers to the UK’s building and construction
industry with a national network of more than 600 branches.
We provide more than 100,000 products to trade professionals including building
materials, plumbing and heating, landscaping materials, timber and sheet materials,
painting and decorating, dry lining and insulation, doors and joinery, and hand and
power tools, many of which are always available from stock. Currently you will be
able to see detail for more than 6000 of these products on our website.
Pricing:
Clear, competitive, consistent trade prices to suit your business.
Open an account with us and your local branch manager will set up prices to suit you
that apply at all Travis Perkins branches and consistently give you the best deals on
the products you buy most.
Service:
The best service from your local branch even on the smallest jobs.
Our reliable staff understand your business and can offer expert advice and support
when you need it, making life easier for you.
Product:
Wide range of trade quality products. We stock all major recognised brands. Our
4Trade brand offers great trade quality at competitive prices to help you get the job
done.
Convenience:
Wherever you’re working, your local Travis Perkins branch is never far away. To
check your nearest branches opening hours you can do so by visiting our branch
locator.
Availability:
The products you need where and when you need them. We stock a wide range of
products in the quantities you want. From a leaking pipe to a full house build, we
have everything you need, no matter what size the job. If it’s not in stock we’ll get it
for you.
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Delivery:
All credit account and trade cash card holders get free delivery. Direct to site or a
local delivery from our yard, place an order with us and we’ll send your delivery on-
time and in full. If there are any issues we’ll let you know.
Tool Hire:
From general tools, diggers and dumpers to skips and toilets, our specialist staff will
get the equipment you need when you need it.
Charity Support
Travis Perkins is keenly involved in supporting the local communities in which it
operates, and the Travis Perkins Group donated more than £1.8 million to worthwhile
causes in 2011. The Travis Perkins Group greatly appreciates the efforts and kind
donations made by its employees, customers and suppliers, and hopes to equal or
better its donation to charities this year.
Four charities benefit from the fundraising activities of Travis Perkins.
Travis Perkins is part of Travis Perkins Plc which can trace its roots back over 200
years. The Group includes some of the leading brands within the Building and Home
Improvement markets such as, BSS Industrial, PTS, Keyline, City Plumbing
Supplies, CCF, Wickes, Benchmarx, Tile Giant and Toolstation. The Travis Perkins
Group has over 1,800 branches across the UK.
http://www.travisperkins.co.uk/about-us
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Wickes
Wickes is a do-it-yourself retailer based in the United Kingdom and owned by Travis
Perkins, with more than 200 stores throughout the country. It focuses on supplies
and materials for homeowners and the building trade. Also targeting the kitchen and
bathroom market, in which it has extensive ranges from budget take away kitchens
and bathrooms, to more bespoke professionally designed kitchens and bathrooms.
History
Wickes was founded by Henry Dunn Wickes in Michigan. USA in 1854 and in 1972
Wickes Corporation along with British builders merchant, Sankeys opened its first
store in the UK. By 1987 Wickes was trading from 41 locations and was floated on
the London Stock Exchange.
In the summer of 1996 serious accounting irregularities were uncovered. Bill
Grimsey was appointed CEO in November to oversee its recovery from the scandal
that saw its share price suspended and the banks foreclosing. Grimsey launched a
rights issue, started an employee share scheme, and turned around the company to
the point where it was bought by Focus-Do-It-All, backed by Duke Street Capital, in
September 2000.
Wickes grew from 131 stores in October 2000 to 172 in March 2004, including the
re-branding of 36 Focus stores. Focus Group sold Wickes to Travis Perkins in 2005.
Wickes store in Hull
In late 2007 Wickes acquired seven stores from Focus DIY after Focus was taken
over in June 2007 by Cerberus Capital for £1. In May 2011 it was announced that
Wickes had purchased 13 stores from the appointed administrators of the Focus DIY
chain Ernst & Young saving 345 jobs.
As of May 2013, the company's stores number 222 throughout the UK.
South Africa
Wickes embarked on a joint venture in South Africa in 1994 with Federated Blaikie,
which saw six Wickes branded stores open in Johannesburg and Pretoria. Following
the financial troubles the parent company encountered, the venture ended in 1997.
The Wickes name was shortly after removed from all stores in South Africa.
Mainland Europe
The Wickes brand had ventured into some Northern European nations (Belgium,
France and the Netherlands) but after the financial irregularities uncovered in 1996,
Wickes management believed that the only way to survive the troubles was to
concentrate solely on their UK operations. In 1997 all mainland European operations
were sold to the French DIY Chain Bricorama.
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Ireland
Wickes started an expansion into the Irish market, opening its first Irish store as a
franchise in Limerick city. This franchise relationship came to an end in early 2013,
and the Limerick store was closed.
Wickes Showrooms
During the time when Wickes was part of the FocusWickes group, Wickes
Showrooms were installed in several Focus DIY stores. Focus were historically weak
in the sale of kitchens and conservatories. Wickes Showrooms allowed these Focus
stores, normally in locations where there was not a Wickes store close-by, to offer
the full Wickes showroom range. Following the demerger of Focus and Wickes,
these showroom units were uninstalled from Focus stores.
In 2010 Wickes launched 5 Kitchen & Bathroom stores, which unlike the rest of the
estate, stock no products in favour of large displays of both Kitchens & Bathrooms.
However all Wickes products can be ordered through these stores for Home
Delivery.
Focus Wickes Warehouse
Following the merger of Focus and Wickes, the company launched a cross branded
store, "Focus Wickes Warehouse" in September 2001. Basically, the two stores
melded into one, with a standard Wickes Store with the addition of the Focus "Softer
end" range. One store was opened in Glasgow and at 100,000 sq ft (9,300 m2), was
around four times the size of a standard Wickes Store. This format was to be rolled
out nationwide, but never expanded beyond its first store. Starting in 2003, Wickes
Extra Stores emerged, which range in size from 50,000 sq ft (4,600 m2) to 100,000
sq ft (9,300 m2), and whilst larger than a standard Wickes Store, sell only an
expanded range of Wickes' core products with no soft furnishings, an evolution of the
previous format. The Focus Wickes Warehouse was converted to a Wickes Extra
store in 2005.
Rivals
When B&Q launched their "The Depot" format (later relaunched as B&Q Depot and
again as B&Q Warehouse) it was widely seen as an attack on Wickes foothold in the
crossover DIY / builders' merchant market.
The most direct attack on their market share came in the early 1990s when the Great
Mills DIY Chain launched Bay6 (Basics), with a small number of stores, mostly close
to existing Wickes outlets. These stores were identical in size, look and layout to the
Wickes stores. In 1995 Wickes bought the 6 Bay6 stores from Great Mills' parent
company, RMC. (Four were already trading, two were under construction.) In return,
Wickes sold 23 of their Builders Mate branded outlets to RMC.
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Product range changes
In 2009 Wickes completely pulled out of the fitted bedroom market, and dedicated
extra store space to an expanded kitchen and bathroom range instead. In 2012 they
started extending their range offering beyond own-brand products, by stocking a
selection of trade brands including Makita, Bosch, Rawl, Speedfit, Stanley and
Velux.
http://en.wikipedia.org/wiki/Wickes
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B&Q
B&Q plc, originally known as Block & Quayle, is a British multinational DIY and home
improvement retailing company headquartered in Eastleigh, England, United
Kingdom. Founded by Richard Block and David Quayle in 1969, it is now a wholly
owned subsidiary of Kingfisher plc.
B&Q currently has stores in mainland China, the Republic of Ireland and Taiwan, as
well as the United Kingdom. It is the largest DIY retail chain in China and the United
Kingdom. It is the second-largest in Europe and the fourth-largest in the world
(behind The Home Depot, Lowe's and OBI).
B&Q was founded in March 1969 in Southampton, England, UK by Richard Block
and David Quayle. The first store opened in the Southampton suburb of Portswood
and was originally called Block & Quayle, soon shortened to B&Q.[9] The chain
quickly expanded, and by 1979 there were 26 stores across the UK, by which time
the first of the co-founders had left the business: Block left in 1976 and Quayle in
1982.
B&Q grew rapidly through a combination of mergers, acquisitions and expansions. In
1980, B&Q bought the Hampshire based company Dodge City, and was itself
acquired by F. W. Woolworth Company. F. W. Woolworth's UK subsidiary
(Woolworths Ltd.) and B&Q were bought two years later by Paternoster, now known
as Kingfisher plc and still B&Q's parent company. In the late 1980s B&Q purchased
Timberland DIY based in the North East.
B&Q developed two new trading formats; HomeCentres, retailing furniture,
bathrooms, soft furniture, flooring and lighting and AutoCentres being similar to a
Halfords, the first launch taking place at Cribbs Causeway in Bristol in the late
1980s. The concept being to have a HomeCentre, AutoCentre and DIY superstore
with one communal car park. The forays into these new markets were relatively short
lived and the various sites were sold on a couple of years later. The AutoCentres
becoming in the main 'Charlie Browns', the HomeCentres being sold off individually
In the mid-1990s B&Q opened a new format of store known as The Depot (later
changed to B&Q Depot), a forerunner of a new class of store known as the B&Q
Warehouse. The company also began to expand outside the United Kingdom. In
1995 it co-operated with parent company Kingfisher plc to open its first overseas
subsidiary in Taiwan, and in 1996 the first overseas large home improvement center
in Taoyuan City, Taiwan. In 1998 it acquired NOMI, Poland's leading chain of DIY
stores, and later that year merged with France's Castorama. The following year B&Q
opened a store in Shanghai, and acquired the British hardware company Screwfix.
B&Q opened its first store in Hong Kong on 1 June 2007,[18] but was scheduled to
close it on 13 September 2009. In December 2007, Kingfisher sold its 50 per cent
stake in B&Q Taiwan to its joint venture partner. The $106.5 million (£52 million)
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proceeds were used to reduce debt. In March 2009, B&Q closed 22 of its then 63
stores in China, blaming the housing slump.
In May 2011, B&Q agreed to acquire 31 stores in the United Kingdom from the
administrators of the Focus DIY chain for £23 million.
On 31 January 2013 B&Q Ireland Ltd. filed for examinership in the Irish courts and
PWC Ireland was appointed examiner. B&Q Ireland stores will continue to trade as
normal for the next 100 days until a suitable buyer is found or alternative financing
arrangements can be made. Gift vouchers will continue to be honoured in stores and
its 700 staff will continue to be paid. It is proposed to close two of the nine Irish
stores – in Waterford and Athlone. B&Q Ireland had made a loss in each of the
preceding six years.
By 2000 B&Q had 50 of its larger Warehouse stores; this had doubled by 2003. As of
May 2007, B&Q in the UK had 331 stores and 39,000 employees. In Ireland B&Q
operate 9 individual stores. Its 2004/2005 turnover was £4.1 billion and profit £400.5
million, compared to published figures putting turnover at £3.9 billion and profit at
£162.9 million for year ending February 2007.
In 2011, B&Q opened a new regional distribution centre at G.Park in Swindon. At
74,000 m², it is the largest building ever to be built in Swindon.
B&Q formerly advertised under the slogan "You can do it when you B&Q it", but this
has been adjusted to 'The Real Deal' and 'Let's do it'. In 2011, they launched two
new slogans, "What could you do this weekend?" and "Let's Do It Together".
B&Q sponsored Ellen MacArthur's round the world sailing success in trimaran B&Q.
http://en.wikipedia.org/wiki/B%26Q
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Homebase
Homebase is a British home improvement store and garden centre, with 342 stores
across the United Kingdom and Republic of Ireland. It is well known by its green and
orange colour scheme. Together with its sister company Argos (with 750 stores), it
forms part of Home Retail Group. Homebase recorded sales figures of £1.57 billion
for the last financial year (2009–10). Homebase made a profit of £41.2 million for the
year 2009–10.
Homebase was founded by Sainsbury's supermarket chain and Belgian retailer GB-
Inno-BM in 1979 as Sainsbury's Homebase, to bring supermarket-style layout to the
British DIY market. Its first store was in Croydon, opening on the Purley Way on 3
March 1981.
Homebase tripled in size in 1995 when J Sainsbury plc bought rival store group
Texas Homecare from the Ladbroke Group plc. These stores were rebranded and
converted to the Homebase format, beginning with the Longwell Green store in
Bristol in February 1996, with the process being completed by 1999. In October 1999
Sainsbury's bought Hampden Group plc, the franchisee of 10 Homebase stores
across Ireland.
Sainsbury's sold the Homebase chain in December 2000 in a two-fold deal worth
£969 million. The sale of the chain of 283 stores to venture capitalist Schroder
Ventures generated £750 million and the sale of 28 development sites to rival B&Q's
parent company, Kingfisher plc generated £219 million. At the time, the chain had
13% of the UK market with 283 stores and 17,000 employees, behind B&Q and
Focus Do It All.
Homebase was later sold to GUS plc (formerly Great Universal Stores plc) in
November 2002 for £900 million, where it became part of Argos Retail Group. On 10
October 2006, GUS completed a demerger of its remaining two businesses,
Experian and ARG. ARG was renamed Home Retail Group, within which Homebase
now operates.
In early October 2007, it was announced that Home Retail Group had signed a
contract for the purchase of 27 leasehold properties from Focus DIY. The purchase
price paid was £40 million in cash. The properties were transferred over the period
up to 31 December 2007 and were then re-fitted to the Homebase fascia over the
course of several months. No other infrastructure and no merchandise stock were
acquired as part of the transaction, although staff in these Focus stores transferred
across to Homebase.
In 2012, Homebase slightly tweaked their logo by adding a green circle and
changing the green lettering to white.
20 | P a g e
Early in its history, Homebase used its Sainsbury's experience to move into using
central warehouses from which to deliver its stock. By the 1990s it was receiving the
vast majority of its stock into central warehouses, then delivering it to stores.
Homebase still receives a few direct deliveries to its stores from manufacturers and
vendors.
From May 2009 Homebase discontinued its own loyalty program, the Spend & Save
Card and replaced it with the Nectar loyalty card scheme, the UK's largest retail
loyalty card. The Spend & Save card had been used by Homebase since 1982, and
was believed to be one of the first store loyalty cards in the world.
Homebase allows customers to collect and redeem points within its stores, becoming
the first national DIY retailer to participate in this way. Although competitors B&Q
also have a system for processing Nectar points, this is only available on their
website, and even then, points may only be spent, not collected.
Homebase faced criticism following outrage after a poster from a store in London
was released appearing to highlight the benefits of free labour through work
experience, often referred to as Workfare. The offending poster depicts a number of
volunteer staff at the Haringey branch and is captioned: “How the work experience
program can benefit your store. Would 750 hours with no payroll costs help YOUR
store?”"
Homebase released contraditctory statements, the first stating 'The company is not
signed up to the Workfare Programme' and the second that 'we have decided to
make no further commitment to the Job Centre work experience programme'.
Neither statement appears to have deterred groups organising protests, with
organisers calling Homebase’s scheme a "profit-driven attack" on workers and
benefit claimants. Before adding "We hope Homebase will soon join, Wilkinson,
Superdrug and more than twenty other companies who have ended their
involvement with workfare. However we are prepared for further protests in the
weeks and months ahead should they fail to do so."
Homebase runs fifteen stores in Ireland. On 16 July an interim examiner was
appointed by the High Court. Homebase stated the purpose of the examinership was
to place the company back on a "sustainable footing".
http://en.wikipedia.org/wiki/Homebase