Supermarket group Somerfield acquired Kwik Save, a discount grocery store chain with small to medium-sized high street locations, in a £473 million transaction in 1998.
Ostensibly a merger, Somerfield investors owned 62.5% of the enlarged group and Somerfield’s intention was to rebrand the 350 Kwik Save stores under its Somerfield fascia.
Somerfield’s management quickly realised that the look and feel of the Kwik Save stores – featuring warehousestyle wooden shelving, space-saving small checkouts and narrow aisles – would not fit well with the Somerfield brand. Consequently, Somerfield decided to retain and fully refurbish the 102 best stores while the remaining 248 were lined up for closure.
Store Closure Programme
Hilco was appointed by Somerfield as agents to advise on the planning and execution of a profitable store closure process.
Having highly impressed management during the planning stage, Hilco was then appointed to work with Somerfield’s management in executing the closure process of the 248 stores.
Hilco advised management in all operational areas during the closure process, jointly managing the discount strategy, store merchandising, Point of Sale signage and marketing.
During the planning stages of the store closure process, investment vehicle BTTF commenced negotiations with Somerfield to purchase the Kwik Save brand and 171 of the closure stores. Just prior to the launch of the store closure programme, Somerfield’s deal with BTTF concluded. The management of both Somerfield and BTTF requested Hilco’s expertise in managing the transition of the 171 Kwik Save stores to BTTF.
BTTF appointed Hilco as agents to oversee the transition of the Kwik Save stores from Somerfield to BTTF, managing all operational areas of the business during the transitional stage whilst stores continued to trade.
Hilco’s expert management team designed and implemented operational systems for store administration, human resources, stock control, IT and finance whilst also managing the sales performance of the stores.
Hilco’s transition team ensured that the stores traded continuously, enhancing cash flows for BTTF. This allowed BTTF’s management to focus their efforts into planning the future strategy and supply chain management for their new acquisition, whilst building up a suitable management team.