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What Next For Wyevale?

Wyevale trees 725 x 500.jpg

Wyevale, the state of play

  • This week 29 garden centres remain trading under the Wyevale Garden Centres banner. This is down from 40 last week as Blue Diamond has taken control of its final seven and the four sites that were scheduled to close have stopped trading.
  • These include Syon Park which closed last Tuesday and is being cleared, ready to hand back with vacant possession.
  • The last garden centre will be expected to transfer to its new owner in mid-October.
  • The Central Distribution Centre at Milton Keynes is scheduled to be handed back to Wyevale’s distribution partner, XPO, at the end of October.
  • The Customer Support Centre at Syon Park (head office) will be wound down over the rest of this year. A residual team of about 10 will move to temporary accommodation until the middle of next year to finalise matters with stakeholders. This will include handling customer queries about guarantees etc. 
  • Any customers with valid Wyevale gift cards will be able to redeem them at any Dobbies garden centre, once the final Wyevale has been sold.
  • Justin King will remain as chairman until this process is complete. COO, Anthony Jones will move on at a date to be decided.

Process has been a success

Justin King said that the process had been a success. In particular, he is proud they have delivered the best possible outcome for everyone.

  • They will have enabled the business to meet all its liabilities. This had been one of the key objectives.
  • 95% of employees have been able to leave the business with jobs. “With every one of the 6,000 colleagues we have sought to ensure as smooth a process as possible.”
  • Terra Firma has achieved an outcome better than its initial expectations and has achieved a positive return for shareholders.
  • The full buy-out of the pension scheme has been a positive outcome for all pension members.
  • The sale has energised several smaller groups and the industry.

Why did it all go wrong for Wyevale?

While challenging that it all went wrong, Justin King accepts that Terra Firma failed to achieve its original plan and cited 3 reasons. 

First, Wyevale had been unloved for a long time. Second, Terra Firma bought Wyevale late in the life of its fund and this did not give enough time to build a solid platform before it started growing.

And third, the plan to use central distribution to supply the business, an idea that had been so successful in almost every other retail channel, required greater homogeneity among the garden centres. Wyevale had sites turning over under £1m and over £20m within their 147 locations.

Why did Terra Firma decide to break-up Wyevale?

The decision to sell off the garden centres individually was made because the different formats made them difficult to manage as a group. This had been accentuated by some of the later acquisitions.

In effect the sale has split Wyevale into 3 more homogeneous groups. Anthony Jones said that Dobbies, Blue Diamond and British Garden Centres have been quite disciplined in only buying the centres that fit their operating model. In the future, he believes, the chains will continue to get bigger and bigger.

Will the Wyevale name survive?

Maybe! There has been some unsolicited interest, but it has only recently become clear that there would be no ongoing Wyevale trading business. Its future is likely to be linked with the Wyevale domain name, which generates so much traffic.

Are garden centres future proof?

Justin King said nothing was future proof but garden centres had a good reason to exist and were one of the most robust vertical markets. 

Garden centres have always been a retail experience with their inspiring displays and restaurants. This makes it less vulnerable to the growth of online. He said he found the success of Santa's grotto extraordinary.

There has been a misconception, he said, that alternative use such as housing underpinned the value of garden centres. He has never believed this, “Most garden centres are best as garden centres.”

We are all going to have a bit more leisure time, travel less and enjoy our homes a bit more and garden centres can be at the centre of that.

The final judgement

Justin King concluded, “The final judgement of any ownership is ‘have they left a positive legacy?’ We haven’t left a business called Wyevale, but we have left a business energised.”

Anthony Jones added he was proud, when visiting Glee, to hear suppliers compliment the way they had managed the contraction of the business. “I was delighted to be able to pass on the comments to my colleagues who have been so committed and have done an amazing job. I am so proud of them.”

Source : Reproduced with kind permission from George Bullivant, GardenForum

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25 September 2019

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