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Store sales fund the acquisition of B&Q

The B&Q logo at the time Woolworth acquired the business in 1980.

 

Geoffrey Rodgers, Chairman and Chief Executive of F. W. Woolworth, who led the acquisition of B&Q Retail in 1980.


On 11 August 1980 the F. W. Woolworth Chairman Geoffrey Rodgers wrote to workers in all his stores and offices to tell them that the Board had purchased B&Q Retail Limited - a chain of 33 Do-It-Yourself stores which had successfully gone public the previous year.  He explained that it was a logical step in progressing the Board's strategy of setting up a DIY Division to build their market share in Do-It-Yourself and Gardening. Takeover Panel restrictions had prevented executives from telling their staff that they were in negotiations. Rodgers was proud of the deal. He stated that there were no plans to integrate B&Q with Woolworth.

 

Dan Quayle, the Q of B&Q - co-founded with Richard Block.

B&Q was founded by David Quayle (left) and Richard Block. The first store opened in 1968 in Portswood Road, Southampton. Block left the business in 1976, while Quayle piloted it through a tock-market listing in 1979, before receiving a takeover bid from F. W. Woolworth. 

The first B&Q store in Portswood Road, Southampton, which opened in 1968.At the takeover B&Q Supercentres had 39 stores, Some were in High Street premises and others used converted cinemas or storage units. David Quayle was appointed Chairman of a new B&Q Division and was elected as a Woolworth Director. In addition to his main duties, he was invited to develop a new format for the red-front chain's sprawling City Centre superstores.

 

The media did not like Woolworths decision to buy B & Q - they felt they had paid too much and that the DIY bubble had burst.  Today's news, tomorrow's chip wrapper.Press coverage of the acquisition was not positive. The media already felt that the Woolworth move up-market was ill-timed at a time of economic recession, thinking the company would have been wiser to stick with its proven formula from the 1950s and 60s. Commentators believed that the bubble had already burst in the DIY sector and concluded that Woolies was too late and had paid too much.

 

Store Managers were critical too. They questioned the wisdom of closing two flagship Central London Woolworth stores in Oxford Street and Kensington High Street to fund the purchase.  Geoffrey Rodgers explained that throughout its life Woolworth had evolved. During his forty year career with Woolworth the Chairman had risen from the stockroom to the boardroom. He had become convinced that if Frank Woolworth had lived for longer he would have continued to adapt his original formula to stay ahead. The Rodgers interview, which was published in four-page Management Quarterly newsletter, gives the lie to suggestions that Woolworth was moribund and had no vision.

 

Rodgers: Obviously you have to pay a premium to get into something that someone else has built ... We have made a decisive and confident purchase. The pundits may not agree, but I feel strongly that DIY, which is really the basis of a much broader home improvement market, is in many ways only in its infancy. In ten years' time, long after I've retired, I believe Woolworth will have more than 100 big B&Q outlets, and we'll be very glad we got in when we did.

Interviewer: How much integration will there be between Woolworth and B&Q?

Rodgers: We will offer them any sites we have in mind for out-of-town home improvement centres ... but at the moment I am anxious not to interfere. They have a good team... I see the home improvement business being dominated by two or three out-of-town giants in much the way that food has been taken over by the Tescos and the Asdas.

(From WOOLWORTH MANAGEMENT QUARTERLY, Autumn 1980)

 

Rodgers later backed up his words with action. He closed and sold two further flagship stores to buy the Scottish DIY chain Dodge City. This was added to B&Q. The Chairman also curtailed the Woolworth refurbishment programme and diverted the funds to his new acquisition As a result they were able to add ten supercentres by the end of 1981, with a further two acquired from a third-party in the Channel Islands of Jersey and Guernsey. By 1989 the ten year horizon nominated by the Woolworth Chairman, B&Q's annual profits had risen to £76.4m. It had built an enviable 7% of the massive UK repair, maintenance and improvement sector. The chain had taken the number one market position as the runaway leader, with over 100 stores. B&Q continue to dwarf the competition in the twenty-first century.

Geoff Rodgers had a strong personal commitment to open, straightforward dealings with the City and the media. He actively engaged them about the potential of the new DIY business and F.W. Woolworth & Company's other strategies. Some people listened, others did not. He certainly impressed one group of entrepreneurs, who set up the Paternoster consortium that took control of the chain in 1982. The owners, renamed Kingfisher, helped B&Q to deliver its potential and to become the UK's biggest and best.