Home Outlet store Billionaire B&M boss steps down from discount chain after 18 years |...

Billionaire B&M boss steps down from discount chain after 18 years | Retail business

3
0

Simon Arora, the billionaire co-owner and chief executive of B&M, the discount chain that has established itself as one of Britain’s most successful retailers during the pandemic, is due to retire.

The 52-year-old, who runs the business with co-owner Bobby with lesser involvement from younger brother Robin, is due to step down early next year after 18 years at the helm of the chain.

Simon and his brother Bobby, 50, acquired the business from Phildrew Investments in late 2004 when it was a struggling regional chain of 21 stores and turned it into a retail empire of 1 100 stores in the UK and France. It is listed on the FTSE 100 with a market value of over £5 billion.

The retailer, which sells everything from food to toys, DIY supplies and gardening products, has more than 600 stores in the UK and another 500 in France. The brothers are estimated to be worth £2.5billion.

“Having firmly established a strong entrepreneurial culture and built a talented and experienced management team, Simon is looking to plan for retirement,” the company said in a statement on Friday.

In January, SSA Investments, the family office of the Arora brothers, sold shares worth £234m, having sold a stake worth £214m a year earlier. The family still owns a 7% stake in the company, which was listed on the London Stock Exchange in 2014.

Brother Bobby will remain as group commercial director while Robin will sit on the board.

Simon previously described family history as “the classic immigration story.” His father emigrated from New Delhi to the UK in the 1960s with “£10 in his pocket” and went on to set up several businesses and “what money he made he spent on educating his children”.

“He also enjoyed talking about business and trade with his sons, and he filled us with ambition and self-confidence.”

Simon studied law at Cambridge and his early career included a stint at management consultancy McKinsey. Bobby went straight into the family cash-and-carry business after school.

Before hitting the big time with B&M, the brothers, who grew up in Sale, Manchester, had already enjoyed success. In the 1990s, they set up a successful wholesale business, Orient Sourcing, which imported cheap household goods for large retail chains, eventually selling them for £30million.

Recognized as one of the retail industry’s “pandemic winners”, B&M thrived during the crisis when its stores were granted “essential” retailer status and allowed to remain open through multiple closures.

Its low prices and out-of-town locations have struck a chord with shoppers, who spend more than £4billion a year in its stores, and it should continue to do well as the cost crisis of life hits consumer spending.

Success during the pandemic saw the brothers and other shareholders receive hundreds of millions in dividends as profits soared.

The older brother’s retirement will end a hugely successful two-decade business relationship with his brother Bobby.

“There’s a Punjabi saying from our childhood that we both believe in: ‘One plus one equals 11,'” Simon said of the relationship. “Bobby has been side by side with me throughout my business career, and I believe we’ve both been more successful because of that relationship.”

“We like to keep it simple,” Simon said of B&M’s formula for success. “We sell well-known brands that our customers recognize; we have a direct supply, so there is no middleman; and we have good retail standards.

The company said Friday that chairman Peter Bamford would lead the search process for a new chief executive and consider internal and external candidates. Shares fell 6% after the announcement, making B&M the biggest loser on the FTSE 100 on Friday morning.