Clive Peeters To Buy Two Retailers
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The Clive Peeters retail chain is set to buy a Melbourne retailer and a WA retail chain if it is succesful in raising $40 million dollars.

Premium retail group Clive Peeters is looking to raise $40 million dollars so that it can acquire retail operations Michael King in Melbourne and the Rick Hart Group in WA.  The company believes that it can lift revenues from a projected $303 million dollars in 2005 to $354 million in 2006 off the back of increased sales of lifestyle technology products and services.

In a prospectus to investment bankers the company which currently has 23 stores and 870 staff in three states claims that  the group intends to integrate the Rick Hart Group, re-brand and increase trading hours at the Michael King Store and selectively refurbishing Rick Hart Stores. They will also introduce computers, computer peripherals and other lifestyle technology products to the Rick Hart Stores and the Michael King Store while also rolling out the Clive Peters sales and management information systems to the Rick Hart Group and the Michael King Store.

The Group claims that it expects to realise immediate financial benefits from the acquisitions due to a combination of improved gross profit margins in the Rick Hart Group and the Michael King Store. They also expect to leverage off the Company’s existing buying power, increased revenue from extended trading hours and increased advertising at the Michael King Store, and by a reduction in overhead costs as a result of the centralisation of administration and buying functions.

The Group’s long term strategy is the accelerate its new store roll-out program across all Australian States. A significant contribution towards new store costs is made by suppliers and landlords. Clive Peeters has specialist teams with the ability to roll-out new stores within six weeks of handover by builders. During FY 2006, the company intends to open a new store in Tasmania and to find further suitable sites for new stores throughout Australia to be opened during FY 2007 and FY 2008. The Group will also continue to consider opportunities to acquire other quality businesses within the electrical appliance retailing  industry.

Approximately $7.7 million of the funds raised from the Offer will be available to acquire further stores and to fund the new store roll-out program.

More to follow on this story.