F.Hinds is “energised” by the purchase of a dozen Chapelle stores from administration and is confident that it can get them firing on all cylinders again once the business has been stabilised, its managing director has said.
The sixth generation family jeweller struck a deal to buy the stores in February after trading losses meant that Chapelle could no longer meet its ongoing liabilities.
Andrew Hinds said it was working closely with suppliers, landlords and other parties to stabilise the shops it has picked up in a bid to get everything going in the right direction again.
“We are excited about the Chapelle shops joining the business – it is giving us a lot to do and hopefully we can get that business back into shape. I think there is a good business in there and hopefully we can prove that. I think it has sort of energised everybody here, which is good.”
Chapelle ran 21 outlet centre stores and three concessions prior to it calling in administrators Duff & Phelps in January.
Mr Hinds said that after carrying out due diligence it only made sense for his business to acquire 12 of them. “It was down to a combination of what the stores were taking and what they were making and those others just didn’t add up for us. With most of them it was because they weren’t taking enough money and/or the cost structure was unsustainable.”
However, the deal did include stock from all the Chapelle stores that weren’t part of the agreement and closed.
Mr Hinds said he expected there to be synergies that both businesses can benefit from but that it wasn’t rushing into wholesale changes until it has had a chance to assess the state of play.
“We are putting our own IT systems in but other than that we are not going to make any instant dramatic changes. I think you are best learning about the business properly before you go in and try and change everything otherwise you are as likely to change something that works well for no good reason as you are to make something better. Obviously having a bigger store network means that our central expenses are spread amongst a larger number of stores, which instantly makes the burden on the rest of the stores a little bit smaller.”
From a product point of view, he expects a “little bit of cross-fertilization” because both companies operated in a “broadly similar” part of the market, but as the overall mix of brands wasn’t identical there is likely to be an opportunity to expand the range in the Chapelle stores in future.
Mr Hinds did not disclose the amount that the business paid for the assets but confirmed that its own sound financial position had counted in its favour and allowed it to do a deal quickly.
Asked if it faced much competition for the stores, he said: “There was some. But from what we understand, the administrator obviously has to look to maximise money for the creditors but also end up with a viable business at the end of it. Our understanding is that we put a particularly strong case forward in terms of being able to make a success of the remaining shops.”
The 12 Chapelle stores add to the 115 locations that F.Hinds operates under its own brand throughout the UK.