CEO: 'No Change' To BWG Retail Brands Following Deal
Published on Aug 11 2014 2:58 PM
BWG Group chief executive Leo Crawford has told Retail Intelligence that there will be no change to the retail brands the group operates here, following yesterday's announcement that Spar South Africa has acquired 80% of the business.
Spar South Africa operates a myriad of brands, including Superspar, KwikSpar and SaveMor in South Africa. Suggestions that these brands could be adopted here, replacing the likes of Mace and XL, are "absolutely incorrect," Crawford told RI.
"If anyone's coming at the story from that angle, they've got it totally wrong. Mace is a strategic brand in Ireland and is not being phased out.
"We have a very strong stable of retail brands here, and the good news is that there is going to be more financial support for them, as well as for our cash and carry and foodservice brands."
Spar South Africa announced on Monday that it has invested €55 million in a joint venture with BWG's management team, comprising Crawford, John Clohisey and John O'Donnell, who will retain control over the business here. €100 million will be invested in the expansion of the business over the next five years.
"Spar South Africa are not relocating any executives to Ireland; they have faith in the current management team," Crawford told RI. "Like any management team, we have to perform, and we have the tools to perform now: we have added funds, and we don't have the distraction of having to manage relationships with banks."
The announcement also secures a further reduction in BWG's borrowings, following a group debt refinancing last November. "Prior to our refinancing in November, we had a debt of €300 million," said Crawford. "Our debt now is €130 million. Between the refinancing and this deal, our debt has been reduced by more than half. Think of what that means in terms of investment in the business."
He added: "I think there's massive synergistic opportunities between ourselves and South Africa, and I think this is a great show of faith and confidence in Irish retailing."
Commenting on behalf of SPAR South Africa, Graham O’Connor, Group chief executive said that BWG is an "excellent strategic fit" for its business. “Apart from the significant additional financial strength we will bring to the business, the deal will bolster BWG’s purchasing power, deepen our expertise in store formats and design and facilitate knowledge sharing across all aspects of the convenience food retail sector including logistics, warehousing and distribution.”
Pictured is Leo Crawford (right), with Gordon O'Connor, group chief executive, Spar South Africa.
© 2014 - Checkout Magazine by Stephen Wynne-Jones