Victoria buys Balta divisions for £165m

Victoria to pay £165m for Balta’s rug and UK flooring divisions

Victoria Group is to buy Balta Group’s rug division, its UK carpet business and its non-woven operations for £117m in cash and take on £48m of debt.

It has also raised a further £150m from investment group Koch.

Balta will now focus on its ITC residential brand and the contract sector.

The three divisions had EBITDA of £30.1m in the year to 31 March, a 18.7% rise, from sales of £260.2m, up 1.1%.

The rug division had sales of £155m in 2020 and is the second largest rug producer behind Oriental Weavers. The UK carpet division had sales of £87.5m in 2020 and the non-wovens division £14.7m.

Victoria says it expects synergies of at least £12.7m in the next two to three years.

It will retain the Balta brand. The deal is expected to be completed in April.

‘Victoria has spent time building a highquality operational management team with depth and commitment. They have been successful at increasing the operating margin of the group's UK carpet division from 5% to 18% through steady productivity gains and improved customer service. Consequently, Victoria's management team are now laser-focused on execution of our detailed plans for each of the recently announced acquisitions, and I am certain they will achieve similar gains as the businesses are integrated,’ says Geoff Wilding, Victoria Group executive chairman.

Once the deal is completed Victoria says it will have ‘a little under 5%’ of the UK flooring market and 16% of UK broadloom carpet sales.

‘A higher average EBITDA margin and better cash conversion will enable more investment in sustainability and growth through innovation, manufacturing optimisation and more agile digital solutions. Being more focused and less complex is also expected to improve overall efficiency,’ says Balta.

B&S moves in

Barker & Stonehouse has taken almost 20,000sqft of space at two of Fenwick’s department stores.

It is occupying the furniture floor at the chain’s Newcastle flagship store and 9,000sqft at its Bentalls store in Kingston.

‘It is a different way of trading for us, but retail has changed markedly in the past five years, and particularly in the past two. This type of collaboration is definitely an excellent route to sustainable growth. It allows both brands to extend their offer in relevant ways, bringing the benefits of each brand to the customers of both. Fenwick’s values, customers and aspirations perfectly align with our own and I think this will work well for both parties,’ says James Barker, Barker & Stonehouse md.

Hazel Ayers, Fenwick director of buying home & beauty says the move will meet growing demand for contemporary furniture in-store and online.

JYSK profitability means staff bonus

JYSK saw its UK operation move into profit as sales leapt in the past year.

Helped by store openings, sales jumped 67% to €68.9m for the UK and Ireland, with EBIT profits up 740% to €8.3m. Full-time staff will receive a bonus of £2,397 (€2,539).

Customer numbers jumped almost a third to 1.1million.

‘Whilst it has been another tough year for retail in many ways, we are very pleased with the results of our continued investment in growing JYSK’s geographical – and digital – footprint. In Ireland, we were able to contribute positive EBIT for our second financial year in a row. In the UK, we have contributed positive EBIT for the first time, which is a huge achievement considering five out of 12 months, our stores were closed. Following last year’s turnaround project to merge the UK and Ireland organisations we have seen the initial trend for growth continue,’ says Roni Tuominen, JYSK UK & Ireland country manager.

‘It was also a great privilege to be able to implement our industry-leading retail reward scheme. It is rewarding to acknowledge the hard work of staff throughout the year, especially during challenging periods of extended lockdown, where they proved they were agile and flexible in helping us to find creative solutions to service our customers.’

A further 14 stores are planned this financial year.

‘The appetite is there for home furnishing products amongst our customers, perhaps now more than ever. The nation continues to spend more at time at home and to invest in creating comfortable, “hygge”-inspired interiors that are synonymous with our Danish heritage.’

Roni Tuominen, JYSK UK and Ireland country manager