>>TM retail can now drive forward with a focused stategy


TM Retail has for too long been one of the sleeping giants of the neighbourhood retailing scene. Hardly surprising, I suppose, given the fact that its private equity investors have been trying to flog the business for the past three years or so, creating uncertainty and distraction for its management team in the process.
And as the dealmaking in the convenience sector reached a frenzied state, with prices per store topping £490,000, it’s easy to see why those who had backed TM’s expansion over the years wanted to cash in. So why didn’t they get their way? Well, for starters, the asking price was far too high, which led many potential bidders to walk away from any deal. And one of the potential bidders I spoke with recently said he was also worried about the poor state of many of the stores, the disparate nature of a portfolio comprising CTNs, c-stores and high street outlets, and the confusion of too many brands.
Since then the market has calmed down, of course, and as our story on page four explains, TM’s private equity investors are exiting the business in a £165m deal, which is way below the £250m valuation put on the business in 2003, but still a good price for them.
For the management team, it puts an end to all the uncertainties about the future ownership of the business.
You can’t help feeling that TM’s chairman James Lancaster was breathing a sigh of relief when he said the deal would allow the group to move forward to the next phase of its development. It will certainly allow his team to focus all their efforts on developing the business and finetuning a strategy that has been allowed to flip-flop about far too much in recent years.
And I believe the management team needs to address one key issue, namely: should the company continue to run three separate retail businesses, operating under goodness knows how many different brands, and in a plethora of formats? I realise convenience is at the sexy end of neighbourhood retailing, but it strikes me that TM has a chance to focus on its core strength: the CTN market. It could sell its 300 c-stores, raise loads of cash in the process, get rid of its high street variety stores, and then focus all its efforts on becoming the biggest and best CTN chain in the country, all operating under a unified brand.
That would be one way of ensuring this giant of the retail world awakens from its slumbers.
How to wake A CTN giant