New plan will bring financial security to Wyevale
Problems have appeared to hit Wyevale from every direction in recent months. There is the £359 million bridging loan that might prove difficult to renew when Lloyds TSB takes control of HBOS. With Baugur as a shareholder, suppliers have found it difficult to get credit insurance for the garden centre chain. And, probably most serious of all, Wyevale’s internal organisation has been under serious strain, struggling to cope with the combined disruption of moving head office, a new accounting system and the addition of several new businesses. Some suppliers have not been paid for 180 days and several of the garden centres look distinctly unloved.
It is two months since Nicholas Marshall became chief executive. Already he appears to have installed a new confidence in Wyevale. He has won approval from the bank and shareholders for his three year rescue plan. This should lead to a new financial structure by the end of this month, with borrowing reduced to sustainable levels. The bank will convert a proportion of its debt into shares with other shareholders also increasing their holdings. This will place Wyevale in a stronger financial position than it has been at any time in the last five years, says Marshall. This will be good for employees, shareholders, customers and suppliers.
"It's all about gardening and plants," says Marshall about his new plan. He believes Wyevale has lost its good reputation for plants. His strategy is modelled on the format he has used successfully at Country Gardens. By Easter, the customer flow at 50 stores will change so that customers enter through the covered section of the plant area, introducing them first to plants. The theme continues as they enter the shop, where they will be greeted with gardening products, which connect to the area for seasonal displays. The placing of houseplants next to the tills will mean customers leave with the impression of green.
It doesn't matter how large a garden centre is - from now on the whole estate will be treated the same. The large garden centres, including Bridgemere, Woodlands, Heighley Gate and Old Barn, have built their reputation on plants. The layout at Bicester will be changed to provide a second entrance/exit for plant buying customers, through the plant area.
For Marshall, the measure of success will be when Wyevale is again a happy ship that staff are proud to work for. He is convinced that the autocratic style of running a company, controlled from the top, does not work for garden centres. He is keen to encourage managers to be more entrepreneurial, a concept close to his chairman’s heart. Tom Hunter has spent many years encouraging young entrepreneurs in business.
Garden centre managers will be given more responsibility to make local decisions about product and layout that reflect what their customers want. To make sure they have the necessary resources to achieve targets, the decision to reduce the number of regional managers is being reversed. Two more are being recruited who have experience in running garden centres.
Each Garden Centre will be encouraged to become a cornerstone of its community, promoting especially the growing of fruit and vegetables by supporting local schools and groups such as allotment organisations. In marketing, the local name for the garden centre will be emphasised rather than the Wyevale brand. Each centre will have a dedicated web site through which it will build its own gardening club, providing advice and tips as well as special offers.
Manufacturers will also benefit from Wyevale’s new stability. The backlog of late payments will be cleared by the end of January following the recruitment of Antonia Jenkinson from Country Gardens as chief financial officer. A new finance director is working under secondment before he joins full-time in January. In future, the group wishes to gain a reputation as a prompt payer. Marshall has held meetings with its 40 largest suppliers explaining the new approach and listening to their views. Suppliers appear pleased with what they have heard, but remain guarded until they see tangible results
The financial restructuring will also provide the cash to bring the existing garden centres back up to standard. The biggest win for Marshall is to regain lost sales. The clincher for KPMG, who reviewed the three year plan, was the demonstration of how turnover fell when Country Gardens sites were acquired by Wyevale and then bounced back when transferred back to Marshall's ownership two years ago. By rolling out the Country Gardens model across the group he is expecting a significant recovery. Once he has achieved this, he will look again at opportunities to expand.
It is two months since Nicholas Marshall became chief executive. Already he appears to have installed a new confidence in Wyevale. He has won approval from the bank and shareholders for his three year rescue plan. This should lead to a new financial structure by the end of this month, with borrowing reduced to sustainable levels. The bank will convert a proportion of its debt into shares with other shareholders also increasing their holdings. This will place Wyevale in a stronger financial position than it has been at any time in the last five years, says Marshall. This will be good for employees, shareholders, customers and suppliers.
"It's all about gardening and plants," says Marshall about his new plan. He believes Wyevale has lost its good reputation for plants. His strategy is modelled on the format he has used successfully at Country Gardens. By Easter, the customer flow at 50 stores will change so that customers enter through the covered section of the plant area, introducing them first to plants. The theme continues as they enter the shop, where they will be greeted with gardening products, which connect to the area for seasonal displays. The placing of houseplants next to the tills will mean customers leave with the impression of green.
It doesn't matter how large a garden centre is - from now on the whole estate will be treated the same. The large garden centres, including Bridgemere, Woodlands, Heighley Gate and Old Barn, have built their reputation on plants. The layout at Bicester will be changed to provide a second entrance/exit for plant buying customers, through the plant area.
For Marshall, the measure of success will be when Wyevale is again a happy ship that staff are proud to work for. He is convinced that the autocratic style of running a company, controlled from the top, does not work for garden centres. He is keen to encourage managers to be more entrepreneurial, a concept close to his chairman’s heart. Tom Hunter has spent many years encouraging young entrepreneurs in business.
Garden centre managers will be given more responsibility to make local decisions about product and layout that reflect what their customers want. To make sure they have the necessary resources to achieve targets, the decision to reduce the number of regional managers is being reversed. Two more are being recruited who have experience in running garden centres.
Each Garden Centre will be encouraged to become a cornerstone of its community, promoting especially the growing of fruit and vegetables by supporting local schools and groups such as allotment organisations. In marketing, the local name for the garden centre will be emphasised rather than the Wyevale brand. Each centre will have a dedicated web site through which it will build its own gardening club, providing advice and tips as well as special offers.
Manufacturers will also benefit from Wyevale’s new stability. The backlog of late payments will be cleared by the end of January following the recruitment of Antonia Jenkinson from Country Gardens as chief financial officer. A new finance director is working under secondment before he joins full-time in January. In future, the group wishes to gain a reputation as a prompt payer. Marshall has held meetings with its 40 largest suppliers explaining the new approach and listening to their views. Suppliers appear pleased with what they have heard, but remain guarded until they see tangible results
The financial restructuring will also provide the cash to bring the existing garden centres back up to standard. The biggest win for Marshall is to regain lost sales. The clincher for KPMG, who reviewed the three year plan, was the demonstration of how turnover fell when Country Gardens sites were acquired by Wyevale and then bounced back when transferred back to Marshall's ownership two years ago. By rolling out the Country Gardens model across the group he is expecting a significant recovery. Once he has achieved this, he will look again at opportunities to expand.
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