While no-one was expecting Feargal Quinn to hang on to his business forever, news that the 68-year old senator had finally cashed in his chips at Superquinn to a group of private investors at the weekend still took the industry by surprise. Crucially, however, he has not sold out to the big boys, and Superquinn will stay in Irish hands, says Quinn, who built up the family-owned business from scratch in 1960 and has since built a world reputation as a class retailing act.
“Down the years we have never been short of suitors,” he says, “but our strong wish has always been to stay independent of the multinational players and to keep control of the business here in Ireland.”
Under the deal with Select Retail Holdings - a consortium of property consultants and corporate financiers - the Quinn family will sell its 100% stake in the business but take a 5% share in Superquinn. Select partner and former Hamleys chairman Simon Burke will become executive chairman, Feargal Quinn will become president and his sons Eamonn and Stephen will be deputy chairman and business manager respectively.
As to what the new investors can bring to the table, Burke is clear: money, new sites and a fresh approach based on his own retailing experience at Virgin and Hamleys. While they cannot bring the synergies that a trade buyer could in terms of buying power or reduced overheads, they can secure new sites, he says. “Superquinn has a great proposition at the quality end of the market, but it has struggled to maintain market share, partly because it keeps being outbid by rivals with deeper pockets when new sites come up. We have close connections with powerful property developers that will make sites available to us.”
Trying to outbid Tesco & Co for existing properties is a waste of time, he adds. “I’m not even going to try competing with them.”
It is also pointless trying to match Tesco and the discounters on price, he says. “When Aldi and Lidl stepped up the pace, Superquinn was obliged to respond, but perhaps it took the edge off the clarity of its position. We want to reverse that and revitalise the brand at the quality end. We want to make that our own. Under Feargal Quinn, Superquinn grew into a world-class retailer with a deserved reputation for quality and customer care.
“My aim is to build on this reputation. The brand and the shops are well placed to take advantage of the increasing demands of a more discerning customer.”
Reports that he is looking at Northern Ireland are not true, he adds.
Likewise, while the new Superquinn Select c-store is showing “promising returns”, Burke says he has not made any commitment to the number of c-stores there will be going forward. He adds: “At this stage, I have a completely open mind.”
As for expensive IT projects such as electronic shelf-edge labelling, he is “more interested in things that really make a difference to the customer”.
Fears by some staff and members of the Mandate union that this is merely a short-term property play are misplaced, as are attendant concerns that the consortium is too property-focused, he insists. “I can’t make guarantees, but I wouldn’t be surprised if we are still the owners in five or 10 years’ time.
“As for Select comprising property people, not food people, that’s probably because a great number of people that have wealth in this country have made it through property, so it’s hardly a surprise that they are the people doing the deals. It doesn’t mean that we are going to do a carve up.”
.....but in a stranglehold
Number four in the Republic of Ireland food retail market behind Tesco, Dunnes and SuperValu/Centra, Superquinn operates 20 stores and one c-store.
However, fierce competition for sites has thwarted its expansion plans in recent years and its market share has remained stubbornly below 9% as rivals grow.
As a private company, Superquinn does not have to publish its figures. However, stockbroker Merrion Capital estimated its sales were €640m in the year to April ’03.
Founder Feargal Quinn has resisted the advances of several suitors over the years.
As for UK players looking to get into the market, retail sources claim only Sainsbury was a credible proposition as the stores are too small to interest Asda and Morrisons. Musgrave, Tesco and Dunnes could have triggered regulatory problems in the event of a bid.