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Bathstore looking to create an omni-channel business

Bathstore chief executive Gary Favell is aiming to transform the big ticket retailer into an omnichannel business as it aims to grow market share.

Former MFI boss Favell - who took up the position in May, as revealed by Retail Week - said the retailer has about 10% share of the baths market currently, but wants to grow that to 15% through product differentiation and improving its multichannel offer.

The 170-store retailer will launch an app by the end of the year that can be used to scan QR codes placed on products in store.

There are also plans to install screens against every bathroom set to show films helping shoppers’ understand the products.

Online sales account for 10% of overall sales at Bathstore, and Favell wants to grow that by improving the offer including bettering the payment systems.

“We plan to become an omnichannel retailer and really mean it,” he said. “If you can handle your web correctly it’s a big plus.”

Bathstore will launch more digital products to differentiate its offer. It already sells a shower that is controlled by Bluetooth.

“You’ll be able to start running your bath while you’re watching Corrie,” said Favell, who was hired by investment firm Endless, which acquired the retailer in May from plumbing group Wolseley for £15m.

Favell said under Endless, Bathstore will be able to get things done more quickly, including launching new ranges such as furniture. The retailer is also about to begin selling its first ever range of tiles.

Favell would not reveal what level of investment Endless is making in the business, but said Bathstore is spending a “significant” amount on revamping stores, including replacing the current POS, as well as technology and e-commerce.

“We want to be the guys that are leading the pack again,” said Favell. “Bathstore is the sleeping giant in the sector. In its heyday it was doing £150m and making £20m. We want to get back to that.”

In 2011 Bathstore recorded sales of £95m and EBITDA of £6.5m.

Wolseley had been aiming to sell Bathstore for the last two years, creating instability within the business. “The first priority was to stabilise business,” said Favell. “We wanted to get people focused on the top line.”

He added that expansion is on the agenda but not in the short term.

The mid-market retailer has recently launched a new entry level price point, including a toilet selling for just £59. “It’s pulled in a new customer and opened up our market share,” said Favell.

He said Bathstore benefits from its product expertise over rivals including DIY retailers. “Our guys can talk to you about pumps and pressure,” he said.

Favell had to build a new finance and property team when he arrived. Previously the functions were run by Wolesely. “We have a good team of retailers now rather than merchants,” said Favell.

Bathstore operates 40 franchises, with the remaining estate made up of wholly owned stores.

Favell was attempting a turnaround of MFI when it hit the buffers in 2008. He then went on to lead Allied Carpets on an interim basis.

Source : Nicola Harrison – Retail Week
www.retail-week.com

21 August 2012

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