Blue Diamond buys Van Hage – GTN Interview with CEO Alan Roper

Forty-five and counting for Blue Diamond

Exclusive interview with Alan Roper, CEO of the Blue Diamond Group, on plans for the future, his thoughts on inflation and the company’s most recent acquisitions - the three Van Hage garden centres

Three new sites with a rich horticultural history, have joined the Blue Diamond group of garden centres. The three Van Hage garden centres bring its total number of outlets to 45 and strengthens its position as a garden retailer in Hertfordshire and the east of England.

Working in the nursery business since the mid 1950’s, the Van Hage family set up its first garden centre in 1968. In recognition of its six decades of horticultural excellence, two of the centres, Cheines and Great Amwell, will retain the Van Hage name with the third, and most recently opened in Peterborough, becoming a Blue Diamond Home and Garden. “Van Hage’s is an institution I’ve known for years. My mother used drive down from Newmarket to go to Van Hages in Great Amwell to look at Christmas. So two will stay Van Hage’s but Peterborough needs to be rebranded,” says Alan Roper, Blue Diamond’s CEO.

The acquisition has been in the pipeline for some time but complications with the Peterborough site meant the process became protracted. “It was the hardest deal and the most draining I’ve ever done in my life. I could have given up so many times – it was easier doing the Wyevale deals back-to-back with 16 sites than it was buying this Peterborough site,” says Alan.

The thorn in the side of the Peterborough store was its location on the PE1 Retail Park where it was a rentpaying tenant. Alan explains the Van Hage business had no control over the rest of the site: “So you had this demographic punch up on the same site - whilst they went AB1, the retail park was going in the other direction.” The answer was for Blue Diamond to get control of the whole retail park and the only way to do this was to buy it. In the longer term, rents from the companies on the retail park will enable the garden centre to trade ‘rent free’.

Work has already started at Peterborough with a plan to increase its turnover to £8 million and relaunch it as a Blue Diamond Home & Garden in early 2023 but a lot has to be done and it’s a big challenge. “Our average turnover per square meter is £2000 for the group. Some do higher, some are less but if it hits the average, it would do £10 million. I’ve forecasted £8m. I think it will do more and I think the needle will move pretty quickly here,” says Alan.

Work is also focussing on attracting concessions, such as Lakeland, to the garden centre, and softening the signage around the whole retail park. Part of the current restaurant will become a Kipling Patisserie, the interior layout of the whole centre will change to improve customer flow, and Alan hopes the access road can be changed as a solution to the traffic bottle-neck that is problematic at peak times. Retailers to the rest of the park Van Hage Chenies, also need to be welcomed back to the years it has become, as Alan describes area, as ‘a ghost over the town’. Her just tfordshire h over £4m as a turnover

All of this should then bring up the margins which are currently far too low. “We need to fix the commercial Whatever happens, next year backbone,” says Alan and adds that the 10% margins will be a litmus test for how it will need to rise to 40 or will play out in subsequent years. even 50%. Alan recognises the stock and displays at this What we’re going through is not a site has been done well, they short-term thing – for me it’s five are aspirational, but wonders if its operational costs have years minimum been problematic. “We’ll soon start being able to analyse the data but there is always a lot of reasons why margins are low,” he says.

It could be the restaurant but equally it might be the current loyalty scheme where members pay £12 to join for the year and then get 10% off plants, seeds and bulbs and 5% off everything else. This doesn’t really work when there is a low customer average spend. Alan’s plan is to freeze the current loyalty card system, so, allowing those that have it to continue, but recruiting new customers to the Diamond Club. “It would be foolish to take it away because you would lose customers and it gradually burns itself out anyway,” explains Alan. “It’s a nice building and it will be lovely when it’s done. And I think a Blue Diamond Garden & Home in this location will go down a storm.”

The Van Hage Chenies site in Hertfordshire between Amersham and Rickmansworth has a similar foot print to Blue Diamond’s Rake Garden Centre in Hampshire. Van Hage Great Amwell, also in Hertfordshire, is clocking up a turnover of around £11.7m. Both are freehold properties so don’t have the complications of the Peterborough site and plans are in place to improve the catering facilities at both.

Van Hage Great Amwell the first to be opened by the Van Hage family.

Inflation considerations

With building costs 30% higher than in 2018, Blue Diamond has taken the decision to postpone its planned site in Elveden Estate in Norfolk and Scotch Corner in North Yorkshire for another year. But how does Alan think this will affect retailing? “I think there are two stages. Our profits won’t be where we expected them to be this year because of costs. We came off an energy contract over a year ago so we’ve been buying on the open market because every deal where you are quoted to get locked in for three years was just too high. There’s been huge costs to wages. The minimum wage has gone up 24% since 2019 and you’ve got food inflation so people should be looking at their profit bottom lines on restaurants because they are getting squeezed all over the place.”

Alan believes the second phase is the extra households will have to pay in tax, mortgages, food bills and interest on debt which will put pressure on foot fall and average spend. “Suddenly those disposable incomes are going to get really, really damaged and they’re going to shrink back. But I don’t

The Peterborough store will be rebranded to become a Blue Diamond Home & Garden

think you’re going to start to see that play out until you get past Christmas.

“It will be very interesting to see what happens in March, April as we go into the new gardening season as people will be more focused on where the money’s going. It will be interesting from a garden centre point of view how we ride that next year. Whatever happens, next year will be a litmus test for how it will play out in subsequent years. What we’re going through is not a short-term thing – for me it’s five years minimum. ”

From a Dobbies point of view, Alan hopes his AB1 customer demographic will be challenged but will still have money to spend. “If you offer the right experience, people will be more selective, so I’m optimistic. ”

Investing in horticulture

As well as new centres and improvements to existing ones, Blue Diamond has also been developing its relationship with the National Trust and will be offering, next year, a range of seeds and exclusive young fruit trees propagated from those with connections to

No sooner had the ink dried on the last deal I went straight to the two I had sitting on my desk...

Henry the Eighth and the Flower of Kent apple tree at the Trust’s Woolsthorpe Manor, Lincolnshire, the fomer home of Sir Isaac Newton. It is also planning a range of roses based on the collection at Powis Castle, Powys and perennials curated around those grown at Sissinghurst Castle, Kent. It’s also looking into selling a line of bulbs from a grower in Jersey and will be 90% peat-free next year and heading towards the 100%’ peat-free deadline of 2024. On reflection 2022 has been a busy year for Blue Diamond with the conclusion of refurbishing projects at several of its centres and the creation of play areas and restaurants at others. But there is more still to come and Alan leaves us with this cliff hanger. “No sooner had the ink dried on the last deal I went straight for the two I had sitting on my desk because they’re too good to wait. ”