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Garden Centre Group outlines acquisition plans

Stephen Murphy tells of ambitious expansion plans as Garden Centre Group looks to the future beyond Nicholas Marshall.

New Garden Centre Group chairman Stephen Murphy has told Horticulture Week that the 129-centre chain will look to buy up to 70 more centres in the next five to seven years.

He added that other groups looking to buy are unable to match GCG's £100m spending power.

Former Virgin chief executive Murphy took over as chairman of GCG, which private equity company Terra Firma bought for £276m in March 2012, last month.

His first role is looking for a new chief executive who can double the size of the business within seven years, having parted ways with chief executive Nicholas Marshall earlier this month.

Marshall told HW he could not comment but did not rule out a return to the industry, while Murphy indicated that Terra Firma wanted a more ambitious strategy, particularly around acquisitions.

Murphy said Terra Firma sees GCG as "a consolidation opportunity, because the industry is still so fragmented".

Speaking to HW just before his departure last month, Marshall had said he didn't want to buy more centres.

Murphy told HW: "I'm surprised he said that, but they have got to be at the right place and price. Acquisition multiples have to be sensible. Our target is to be over 10 per cent of the garden centre market in the medium, five-year term. That leaves us acquiring some significant chains or a sustained acquisition programme (of) buying independent centres if they become available. We'll be edging towards 200 if we're going to achieve that higher market share."

Murphy said that orders for seasonal plants should be "as normal, given our ambitions", despite a "write-off season" and rival B&Q slashing orders.

GCG finance director Antonia Jenkinson and marketing director Laurie Robertson resigned this week. Neil Fishlock resigned from GCG's biggest rival Dobbies as horticultural head. Meanwhile, B&Q announced 220 redundancies as fallout from the bad season mounted.

GCG Reaction to Marshall departure:

GIMA director Neil Gow said: "It has to be a worry that a major member of the industry has gone. We have seen before in other companies what can happen when people who don't understand the industry get involved in our business."

Former Wyevale CEO Bob Hewitt, who spent 16 years at the company, said: "Since I left in 2005 they are on their fourth CEO and that cannot be good for any business. You have to credit Nicholas for bringing stability and a plant offer to the company."

GCG regional manager Peter Burks said that Marshall's departure came as a shock: "I can't imagine him retiring. He has so much energy and enthusiasm and knowledge of the industry. But he is over 60."

Source : Matthew Appleby – Horticulture Week

26 October 2012
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