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Focus DIY in andministration
- Thread starter steward 433
- Start date
seagullsovergrimsby
#cpfctinpotclub
Focus DIY was sold for £1 in 2007 and in 2009 entered a CVA in order to dispose of the weaker stores within the chain.
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Why is he? It's been 100% owned by the private equity outfit Cerberus for some time now.
I am talking about a superstore because they have a greater range of products both for DIY and the garden. If you like shopping at small independent iron mongers, green grocers and the like then that's your choice. I shop at the larger outlets cause it saves me time.
Actually more likely to be Homebase as they were looking to build a superstore on the Triangle car park but got turned down.
Obviously I don't like the man but why is he responsible for the business going bust. The current owners have had it for 3 years. In Burgess Hill they just spent £1.5m on a big refit which makes the warehouse look better but as it's the only major player in town, was it really that necessary?
portlock seagull
Well-known member
- Jul 28, 2003
- 17,778
Something somewhere. Bound to have some money invested still. Probably only my about 57 mind you!
sod1
New member
suits me fine , as i work for a subcontractor for one of the other major DIY retailers
The Peanut Roaster
Banned
I could add the extra 25 pence.
clapham_gull
Legacy Fan
- Aug 20, 2003
- 25,877
Yep.
I find the difference in DIY stores quite interesting. Homebase very expensive but easy to find what you want. B&Q much cheaper, but some of their stores feel like small towns in themselves.
Wickes very functional, no frills but reasonably quality and probably the best value for money.
If you are doing a spot of decorating they seem to have everything you need, without it being surrounded by everything you don't - which sums up Homebase to me.
I walked into a Focus once (without realising it was one initially I have to say) and it was rubbish. I'm amazed they've managed to stay in business for so long.
Don't often go to Travis Perkins to be honest. They are very expensive, but apparently cheap if you a trade customer ?
Leyland Decorating Centres are my choice for paint etc.. but they don't have many stores and are only in London. I hate painting but like using their paint, because it's so bloody easy to put on.
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Stumpy Tim
Well-known member
Huh? Surely he was responsible for creating the jobs in the first place, sold the company and now someone else is responsible for them losing their jobs.
- Jul 7, 2003
- 47,630
There is no longer a local DIY/ hardware store in Burgess Hill for whoever suggested using that.
It was called Dockerill's and it closed a couple of years ago I seem to recall. Maybe Focus killed it, who knows.
It was called Dockerill's and it closed a couple of years ago I seem to recall. Maybe Focus killed it, who knows.
There is still Upstairs Downstairs but they are small by comparison to Focus both in size and range of goods.
bhaexpress
New member
Much as I would love to heap more scorn on Mr Archer as far as I know he sold Focus and a going concern, considering how much money that was raised by the sale it must have been in a healthy state at that time.
This will explain why HE IS responsible for the business going BUST
From the BBC
It was early 2005 and Bill Archer had been crowned king of the buyouts. The entrepreneur had topped off a remarkable run as founder of the Focus DIY chain with the deal of a lifetime. Wickes, a business that Focus had bought for less than £300m four years earlier, was sold for £950m — more than three times its original price.
Archer and the private-equity firms that backed his plans shared a £650m windfall. Archer was already rich from selling shares as the business had become more successful, but the Wickes deal catapulted him into the country’s moneyed elite.
From just a few small stores, Archer and Duke Street had created the UK’s biggest independent DIY chain. However, such growth was not without its perils. Like so many private-equity-backed businesses, Focus had been built during a halcyon period when cheap money from generous banks enabled clever investors to get rich quickly.
Its precarious foundations caused the undoing of what had promised to be a great success story. The company was unable to withstand a bulging debt mountain that grew every time Archer and Duke Street awarded themselves large dividends — and it unravelled at speed.
The story of Focus is a classic tale of boom and bust when private equity was at the height of its powers. The company’s meteoric rise rewarded a few handsomely. However, when it burst many others were left nursing losses.
Focus’s origins go back to 1987 when Archer, aged 43, left his job as manager of Crown Paints to set up a DIY business. With a £300,000 bank loan from remortgaging his house, Archer teamed up with Greg Stanley, who had made money from the sale of shares in his father’s Fads DIY chain. Together they bought Choice DIY, a seven-store regional chain, for £900,000.
Their potential was soon spotted. A year later, four venture-capital firms backed a £4.5m buyout of the Focus DIY chain from British Fuels and took minority stakes in the company, which adopted the Focus name. The deal doubled the size of the business. Archer saw the benefits of scale and with private equity behind him planned to challenge market leaders B&Q and Homebase.
They wasted little time. In 1991 an attempt was made to buy Fads from Boots the Chemist. The offer was rebuffed and over the next 10 years the business grew to around 72 stores. By then Duke Street had bought out its private-equity partners and established a 45% stake.
According to a former associate, Archer was so ambitious he ran the business with a “rod of iron”. “He had an old-fashioned approach to management,” said another.
Stanley was bought out, enabling him to buy two apartments in London’s Chelsea Harbour. He and Archer had also made their mark on British football, having owned Brighton & Hove Albion football club for a number of years.
By 1998 the DIY market was in full swing. Encouraged by home-makeover TV programmes such as the BBC’s Changing Rooms, DIY had suddenly become fashionable. The market was buzzing with deals. Alchemy Partners made more than £40m in under three years reviving the Fads and Homestyle chains on an initial investment of £3m.
Jon Moulton, founder of Alchemy, said: “It was a simple business and an attractive area because the market was growing at double figures annually. A lot of people made a lot of money.”
Archer and Duke Street stepped up their ambitions, buying loss-making rival Do-It-All for £68m from Boots. The deal turned Focus into a national player with 210 stores and gave Archer his first big payday. Duke Street paid £25m to raise its stake to 60%; £58m of debt as part of the deal began the company’s reliance on debt to maximise returns.
With Duke Street support, Archer ran riot, buying Great Mills for £250m, then Wickes soon after. Wickes was the jewel in the crown, but with £250m borrowed to support a £290m deal it was also high risk. By 2002 the business had 450 outlets, £1.6 billion of sales and operating profits of £106m. The next step would be a stock-market float and with some experts valuing Focus as high as £1.8 billion Archer and Duke Street stood to make a killing. A weakening DIY market killed the plans, however. Instead, the next big payout came via a £1.1 billion recapitalisation later that year, with Apax Partners paying £120m to take a 29% stake. The deal gave Archer a further £80m while Duke Street took out £180m, reducing its stake to 45%. The banks were also desperate to get involved and £700m of debt was piled into the business.
In 2005 Archer’s reputation as one of Britain’s best dealmakers was cemented when Wickes was sold for £950m to builder’s merchant Travis Perkins. In total, Duke Street, Apax, Archer and other directors shared £650m. Archer banked another £74m.
“Wickes was Archer’s masterstroke — he sold it for an unbelievable profit. Travis Perkins paid way over the odds,” said one retailer.
The elation was short-lived. As the DIY market weakened, Focus was forced into expensive debt renegotiations. Moulton said: “The economics suddenly became very poor. The market got saturated and then hammered by a recession.”
Despite profits of £43m in 2006, Focus fell into default and never recovered. According to Fitch, the ratings agency, two-thirds of operating profit in 2006 were needed to cover interest payments on its debt.
“The market deteriorated at a horrendous speed and it was impossible for management to react because there was so much debt,” said a former adviser to the company.
Collapse loomed, but at the last minute US turnround specialist Cerberus bought Focus for £1 in June 2007. Cerberus, which also took on debts of £180m, brought in Bill Grimsey, former chief executive of Wickes, to transform the business.
“When we came in, staff morale had been wiped out and the shelves had no stock because suppliers thought it was going bust. The business was still selling eight-year-old kitchens because there had been no investment,” said Grimsey.
Duke Street argues that at four times pre-tax profits the debt Focus took on was conservative compared with other deals of the time. “We worked very hard with management to save Focus,” Duke Street managing partner Peter Taylor said.
Archer, Duke Street and Apax had all their remaining equity wiped out, but by then had already banked large fortunes. Archer made an estimated £170m. Former associates say he remained modest despite a big property portfolio and a fleet of expensive cars that included a Bentley, Aston Martin and Porsche. Duke Street banked £540m and Apax £180m. Finance director Geoff Wilson is thought to have made £20m, and founder Stanley a similar amount.
Focus’s banks, Barclays and ING, escaped the fallout. Cerberus paid back the £180m owed by Focus. Some bondholders lost money. Institutions, including Goldman Sachs, JP Morgan, Commerzbank and Invesco bought £100m of distressed bonds, aiming to profit from any restructuring. However, Cerberus paid back only £40m. Goldman Sachs swapped debt for equity in the firm, and only time will tell how smart that was.
Perhaps the biggest loser was Travis Perkins. In four years profits at Wickes have more than halved from £71m to an expected £34m for 2009 and analysts estimate that its value may have shrunk to £100m. “The Wickes deal was the very top of the market. It was the wrong price at the wrong time,” said Howard Seymour, analyst at Numis Securities.
The story of Focus DIY encapsulates the rise and fall of private equity, and in this case the final gains and losses were not far apart. Private equity and company directors shared around £930m in total. Losses were about £1.3 billion, including bondholders, Travis Perkins’s paper loss on Wickes and Cerberus’s £250m current debt and equity exposure to Focus.
Today, Grimsey is trying to turn Focus round. He said: “Morale is back up, our suppliers are behind us and management is determined to see this through.”
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Arthur
Well-known member
Lad who works for me Dad is on the board at Focus. He came in from the Wickes acquisition and watched Archer basically asset strip the Wickes business he had been an integral part of building (sound familiar?) only to flog it a couple of years later. Consequently he hates the bloke as much as we do.
You can fault Archer for allot of things but you've got to give it to the guy he is a very ruthless businessman and has done very well for himself over the years. Which makes you wonder why he even bothered with us? Guess he saw it as a quick easy buck?
The one bit of good news my mates dad did give me was that one of the big contributing factors to him selling up was his health which was in decline.
You can fault Archer for allot of things but you've got to give it to the guy he is a very ruthless businessman and has done very well for himself over the years. Which makes you wonder why he even bothered with us? Guess he saw it as a quick easy buck?
The one bit of good news my mates dad did give me was that one of the big contributing factors to him selling up was his health which was in decline.
For all those that still boycott Focus, surely this is great news - otherwise, why were you boycotting it?
Presumalby one of the other DIY stores will set-up there, since there's a good market and no competition.
34064 Fighter Command
New member
Looking at the numbers it appears Focus were lumbered with debt by Archer in much the same way that the Glaziers have loaded all the debts they incurred in buying Manure onto the Club itself rather than themselves. Meanwhile of course they continue to award themselves healthy dividend on the back of operating profits whilst conveniently sweeping the debt under the carpet as they never intend to repay it.
Manure to go the same way as Focus in a few years time methinks .......
Manure to go the same way as Focus in a few years time methinks .......
Wishful thinking. It's up to lenders to satisfy themselves that the debt can be repaid, if they're daft enough to lend millions without means of repayment, more fool them. But even if the club went bust, they'd still have many thousands of supporters, so all it would take to start up again is for someone to buy old trafford (it's worth more as a football stadium than a retail park, unlike the Goldstone) and fans would still turn up to see any new formed team.