Retail shake-up as Costcutter owner plans to take over rival
Barry Group is looking to make an acquisition, writes Gavin McLoughlin
The company behind the Costcutter and Carry Out brands will look to acquire a rival this year in a move that would significantly shake up the Irish retail sector.
The Cork-based Barry Group, one of Ireland's largest retail and wholesale businesses, is aiming to expand, now that the economy is in recovery mode.
"We are looking for opportunities at the moment, we have looked at one or two projects last year and we're still looking at one. We're about to explore one or two other opportunities, so we would expect to make an acquisition at some stage this year," managing director Jim Barry told the Sunday Independent.
"We will remain within our sector, we aren't looking at outside our sector... but ultimately it needs to be the right deal for us as well. We aren't going to go out blindly and pay silly money for something.
"We are actively looking because as a company we've a very large capacity in our warehouse, so we've lots more capacity. Part of our strategy is very much to try identify one or two sort of add-on businesses that could be serviced through our main facility in Mallow."
Barry would not reveal how much financial firepower the company has, nor would he name any of the businesses he is interested in. The business, a significant wholesale player, has a turnover of around €250m a year, supplying 265 franchises under the Costcutter, Carry Out and Quik Pick brands. It employs 250 people and Barry hopes to add another 20 or 30 over the next six to nine months.
A deal on the retail side would propel the business closer to bigger rivals like Musgrave, which owns the Centra brand, and BWG Group, which owns the Spar brand and has recently bought the Londis brand.
Retail and business advisor Keith Harford told the Sunday Independent that the Gala brand may be an attractive target.
"On the retail side, they could pursue a group such as Gala, which has approximately 200 stores, which are serviced through numerous wholesalers countrywide.
"This would widen the retail side and use a lot, if not all, of the wholesale distribution capacity in Mallow."
Harford said that the group could also pursue Londis retailers who don't want to stay with BWG.
"However, BWG seem to be making strong commitments to the Londis retailers, but all will not be won over. Could there be a 'fallout' group?
"On the wholesale side, they could pursue more of, or all of, the Stonehouse Group, of which they are already members."
Barry said business had been sluggish during the summer but picked up sharply last month.
"The summer was very difficult, we found, then things got kind of solid, but for the month of December it went through the roof.
"The last number of years it was kind of about survival and keeping it all together.
"It's now growth and going out there and looking for added opportunity."
Sunday Indo Business