Pets at Home faces £2million bill over store closures
The closure of the seven high-street Barkers dog stores will cost owners Pets at Home around £2 million, it has been revealed in the retailer's latest financial figures. The costs are attributed to lease commitments and the write down of fixed assets.
Last week Pet Trade Xtra revealed that Pets at Home was closing the Barkers stores and offering staff alternative roles at its superstores.
The pet retail chain opened its flagship Barkers' shop in a former Blockbusters store in Wilmslow, Cheshire in March 2014 and had since opened a further six shops across the country – Clifton (Bristol), Farnham (Surrey), Ilkley (West Yorkshire), Marlow (Buckinghamshire), Muswell Hill (London) and Sevenoaks (Kent).
A spokesperson for Pets at Home told us: “Barkers is a trial concept of a premium segment small-store format in seven high street locations around the country.
“There are a number of positive aspects from the trial that we will incorporate into our core Pets at Home stores.
“However, we have concluded that the Barkers concept does not offer the potential to be rolled-out profitably. We have therefore decided to end the trial and close our seven Barkers stores by the end of March.
“All colleagues from our Barkers stores will be offered alternative roles in local Pets at Home stores.”
Below is the Pets at Home trading update for the 12 week period from 13th October 2017 to 4th January 2018, compared with the 12 week period from 14th October 2016 to 5th January 2017.
- Group revenue growth of 9.6% to £223.3m
- Merchandise revenue growth of 9.0% to £193.4m, including omnichannel revenue up 77% to £13m
- Services revenue growth of 13.6% to £29.9m, including Joint Venture vet practice income up 19.3% to £12.1m
- Group like-for-like revenue growth of 7.2%
- Merchandise like-for-like revenue growth of 6.8%, with good performance in store sales, as well as from omnichannel initiatives - Order In-Store and subscription
- Services like-for-like revenue growth of 10.1%, reflecting strong growth in first opinion and specialist referral vet services
- All financial guidance*, including gross margin expectations, is unchanged
* Refers to financial guidance before exceptional items
- Excellent progress in Merchandise trading, where price repositioning has continued with the addition of further major brands in both dog and cat Advanced Nutrition
- New checkout process launched on the mobile website, delivering significantly improved online conversion and customer experience
- First Opinion vet practices delivering strong growth across both new and mature surgeries
- Opened two Pets at Home superstores, two Vets4Pets practices and five Groom Room salons. On track to deliver full year opening targets of around 10 superstores, 40-50 vet practices and 20-30 grooming salons
- The Barkers store trial has reached its conclusion. Existing stores will be closed over the coming year and exceptional costs of c£2m are expected in the FY18 income statement in relation to lease commitments and the write down of fixed assets
Ian Kellett, Group Chief Executive Officer, commented: “I’m happy to report further progress in the third quarter, where trading momentum in our Merchandise division built over the Christmas period. In the year since we launched our lower pricing initiatives we have seen a really strong customer response to the investments we have made. At the same time, we continued to deliver strong growth in our veterinary business across both first opinion practices and specialist referral centres. Thanks again to colleagues across the Group who worked incredibly hard to deliver this result.
“We again saw the benefits of our omnichannel capabilities, providing customers with innovative and convenient ways to shop, particularly through Order In-Store and subscription services. This unique combination of capabilities are brought to life by our store colleagues who provide the friendly expertise, advice and service that our customers really value.”