Bunnings Bids For Bbc Stores
Illawarra Mercury
Thursday June 14, 2001
Industrial giant Wesfarmers Ltd is hoping to cash in on the DIY boom by winning control of Howard Smith Ltd's BBC and Hardwarehouse stores to add to its Bunnings hardware chain.
If the $2.2 billion bid succeeds, Wesfarmers will accelerate Howard Smith's plan to close about 85 traditional BBC hardware stores within two years of the takeover being completed.
In their place will be more large warehouse stores, which have become increasingly popular with DIY enthusiasts.
Wesfarmers sees most of the growth in the hardware market coming from DIY and home renovations in the coming years, rather than through trade sales at traditional hardware stores.
Managing director Michael Chaney said yesterday hardware had become much more than ``going down to a hardware store to buy a hammer and some nails". The trend towards building more larger scale hardware stores follows in the footsteps of UK giants B&Q and Homebase, and Home Depot in the US.
Mr Chaney is confident of creating a ``major Australian retailing force".
He predicts the $19billion hardware market will grow at around five per cent per annum until 2005, with the merged entity claiming a 13.2 per cent share of the market. Mitre 10 has about 12 per cent.
Wesfarmers says it can turn the BBC business around by spending about $500,000 revitalising stores and employing more staff to help customers. The business will have $3 billion in sales and should reap about $40 million in savings and synergies in the first year.
© 2001 Illawarra Mercury
