BWG may sell some Spar stores to retailers

BWG Group, owner of the Spar and Mace franchises in the Republic, has offered to sell some of its stores to independent retailers using the brands.

The group owns about 150 outlets in the Republic, which have been valued at approximately €200 million.

A further 350 outlets are owned by independent retailers who used the BWG franchises.

Group chief executive Mr Leo Crawford said he has no feel for the number of retailers who might feel like taking up the offer but that any funds raised will be used to invest in new stores.

The announcement follows approaches from independent retailers over recent times.

BWG had a turnover of €1.6 billion in 2004 and an operating profit of €48.7 million.

As well as its Irish franchise operation it also has: the Bargain Booze off licence franchise in the UK, which is currently up for sale; a Spar wholesaler in the south of England, called Appleby Westward; and a cash and carry and food distribution service in the Republic.

The group was purchased for €220 million in a management buyout in 2002 and has since then been opening approximately 40 new outlets per year in the Republic. It plans to open 70 new Spar outlets in the coming two years and fifteen new Eurospar outlets in the coming 18 months.

The group follows a twin strategy of opening its own stores and selling the franchise to independently owned outlets.

The group is 65 per cent owned by venture capital company Electra, with the management owning 15 per cent and John Clohisey of Newhill Ltd, whose chain of 115 Spar stores was acquired for €45 million in the 2002 buyout, owning 20 per cent.

Mr Crawford said trade in the Republic was going well this year, up by 10 per cent.