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Store sales fund the acquisition of B&Q |
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| On
11th August 1980 the F. W. Woolworth Chairman Geoffrey Rogers wrote to
all stores and offices to tell them that the Board had successfully
purchased B&Q Retail Limited - a chain of 33 Do-It-Yourself stores
which had successfully gone public the previous year. It was a
logical step in progressing the Board's declared strategy of setting up
a DIY Division to expand market share in Do-It-Yourself and Gardening.
Takeover Panel restrictions meant that the Board could not inform colleagues of the negotiations until the deal was done, but Rogers could commend it to everyone. He had no plans to integrate the businesses. |
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B&Q was founded in 1968 by David Quayle (left) and Richard Block, opening its first store in Portswood Road, Southampton. Block left the business in 1976, while Quayle led it through a successful stock market flotation and led the negotiations with Woolworths. | |||
| At the takeover B&Q had 39 stores, some in High Street premises and some in converted cinemas and storage units - all branded "B&Q Supercentres". David Quayle joined the Woolworth Board, taking responsibility for developing a new format for Woolworths large City Centre stores alongside his role as Chairman of B&Q. |  |
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Press coverage of the acquisition was not positive. The media already felt that Woolworth's drive up-market was ill-timed at a time of economic recession, thinking the company would have been wiser to stick with the formula from the 1950s and 60s. They believed that the bubble had already burst in the DIY sector and Woolies were too late and had paid too much. | |||
| Store
Managers were critical too. They questioned the wisdom of closing
flagship Woolworth stores in Oxford Street and Kensington High Street to
fund the acquisition. Was this the beginning of the end, they
asked. Chairman Geoffrey Rogers explained that throughout its life
Woolworth had evolved and (as a Woolworth man of forty years service) he
was convinced that Frank Woolworth would also have continued to move the
formula on. His interview is insightful and flies in the face of
suggestions that Woolworth was moribund and had no vision. |
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| Rogers:
Obviously you have to pay a premium to get into something that someone
else has built ... We have made a decisive and confident purchase.
The pundits may not agree, but I feel strongly that DIY, which is really
the basis of a much broader home improvement market, is in many ways
only in its infancy. In ten years' time, long after I've retired,
I believe Woolworth will have more than 100 big B&Q outlets, and
we'll be very glad we got in when we did.
Interviewer: How much integration will there be between Woolworth and B&Q? Rogers: We will offer them any sites we have in mind for out-of-town home improvement centres ... but at the moment I am anxious not to interfere. They have a good team... I see the home improvement business being dominated by two or three out-of-town giants in much the way that food has been taken over by the Tescos and the Asdas. (From WOOLWORTH
Management Quarterly |
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| For the record Rogers put his money where his mouth was, closing two further flagship stores to buy Dodge City (a Scottish DIY retailer) for B&Q and curtailing the Woolworth refurbishment programme to fund new store openings for the Chain, opening 12 new stores by the end of 1981 and acquiring two stores in the Channel Islands. And in 1989 - the "ten years time" horizon that he spelt out in the interview B&Q generated £76.4m profit with a 7% market share of the entire Repair, Maintenance and Improvement market in the UK, by far the biggest player out of town - with well over 100 shops. | ||||
| Geoff Rogers had a strong personal commitment to openness with the City and the media. He actively engaged them about the potential of the new DIY business and Woolworths' other strategies. Some people listened, some people didn't. The consortium that became Kingfisher clearly saw the potential of B&Q and helped to realise the dream of the Woolworth management - but not as part of Woolworths. | ||||
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Recent History Gallery Home Page (1970-2004) Diversification
and rationalisation in the 1970s The
Wonder of ... advertising
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