Wyevale Garden Centres

Wyevale Garden Centres is the largest plant- and garden-focused retailer in the UK

Wyevale Garden Centres (WGC) is the largest plant- and garden-focused retailer in the UK. The business has three sources of income: the sale of gardening and associated retail products; on-site food and beverage outlets and lease income from concession space let to third-party retailers.

Gardening is part of British culture; almost half of all adults say they enjoy gardening, rising to nearly two-thirds of those aged 45 and over. The sector is considerably less volatile than overall consumer spending and is expected to benefit from an ageing population.

 

Investment strategy 

Asset-Backed: The business currently operates about 150 sites across England and Wales, and is the largest garden centre operator in the UK, with an estate that is difficult to replicate under UK planning restrictions.

Requiring Fundamental Change: When Terra Firma acquired WGC (then known as The Garden Centre Group) in April 2012, the business had been capital-constrained and unable to take full advantage of investment opportunities in its existing portfolio or consolidation opportunities in what is a very fragmented sector in the UK. A business plan was developed to establish a national brand, consolidate the sector, weather-proof the business and realise economies of scale.

 

Creating value 

  1. Transforming strategy

    • As part of its strategic review of the business post-acquisition, Terra Firma carried out a detailed site-by-site analysis which highlighted operational inefficiencies and the need for a more co-ordinated approach across the estate.
    • WGC has focused on developing income streams that both enhance the customer experience and are less weather dependent, particularly by devoting more space to concession partners and restaurants.
    • The customer experience and store format is being improved in order to provide a better and broader offering which appeals to both ‘leisure’ and traditional ‘gardening’ customers. The business was rebranded to leverage the historic Wyevale name and provide the group with a national umbrella brand, enabling more effective marketing communication.
    • WGC is focused on strengthening its core proposition to improve its customer footfall, increase sales density, transform the supply chain to lift retail margin and acquire more garden centres.
  2. Strengthening management

    • Since acquisition, the management team has been continually and significantly strengthened according to business needs. A new Chairman, CEO and CFO were appointed in 2012 to lead the first phase of transformation. Since then, there have been new appointments of Retail Operations, Commercial, HR, Restaurant, Trading, Property and Multi-Channel Directors to bring more focus to each part of the business.
    • In 2016 the business renewed the focus on its core retail offering and customer proposition. It has appointed senior leaders with extensive retail and private equity experience, including a new CEO, CFO, Trading Director and Supply Chain Director. Terra Firma’s Vice Chairman and Head of Portfolio Businesses, Justin King, has also taken on the role of WGC Chairman.
  3. Developing through capital expenditure

    • In 2014, the business focused on building out retail, leisure and concession space and expanding its food and beverage offering. Since the beginning of its store investment programme, the business has refurbished a total of 47 centres, adding around 240 new concessions and creating five new Botanic Kitchens, nine new Coffee Grounds and 13 new Costa Coffee outlets.
    • WGC has sought to benefit from its scale by moving to a fully centralised and integrated supply chain. A more efficient IT infrastructure is also being developed along with a multi-channel offering.
  4. Building through mergers and acquisitions

    • The plant and garden retail sector in the UK is very fragmented. Under Terra Firma’s ownership WGC has acquired 25 sites, bringing the group’s portfolio to 151. This is more than four times the number of sites as the next largest garden centre group.
  5. Lowering the cost of capital to create extra upside

    • Between 2015 and early 2016, WGC successfully completed the sale-and-leaseback of 13 garden centres. The proceeds of these transactions were used to pay down debt and invest in acquisitions. 

Back to list of investments