Institutional investors could move for Dobbies

Dobbies Garden Centres going on the market could bring in new players from institutional investors, according to property agent Quinton Edwards. Tesco put its 36-centre chain up for sale this month as the supermarket group sought to shed non-core assets.

Dobbies: Tesco is seeking to shed all its non-core assets
Dobbies: Tesco is seeking to shed all its non-core assets

Quinton Edwards director Simon Quinton Smith said: "This is a fantastic opportunity for the whole industry. I'm of the opinion there will be serious interest from various quarters, which will possibly include Wyevale, Nicholas Marshall, James Barnes and others."

Other retail groups could be interested and Dobbies is "the only national chain, with centres from Ashford to Inverness and in Northern Ireland", he added, while Dobbies' buildings are the best in the industry. Wyevale is believed to be carrying on buying, while investors from outside the industry are showing interest. Investment banker Greenhill is handling the sale for Tesco.

Quinton Smith added that garden centres as an alternative investment class are coming into bloom right now. "Institutional investors are waking up to the fact that there has been a seismic shift in the market in recent years," he said.

A Wyevale-Dobbies merger would mean a 189-centre group turning over more than £400m, which is a worry to some in the industry. Garden Industry Manufacturers Association chief executive Vicky Nuttall said: "Consolidation is a concern, not that it necessarily reduces the amount of gardening supplied into the industry but it reduces the number of buyers and they are busier and busier, which makes it harder for smaller companies. There is the potential for more reliance on bigger suppliers. More professional buyers are more interested in margin than product."

Lawler Associates owner Jane Lawler said: "We've been having consolidation for 10 years and successful businesses always find a pathway. I wouldn't want to be only in Dobbies. All businesses are acutely aware of channel mix and they have to manage it. Research I did found 10 buyers control 75 per cent of the garden centre market."

Sharper Thinking Associates director Steve Harper added: "We've still got 1,300 independents even without the big groups." Bransford Webbs sales director Adrian Marskell said: "Consolidation is going to happen. As a scenario, if Wyevale bought Dobbies it would possibly take Wyevale's eye off the independents."

Several growers have spoken to HW about loss of business caused by Wyevale buying independents. Country Herbs & Plants owner David Nieburg pointed out: "From my experience they do not allow new centres to source plants from established suppliers."

HTA horticulture head Raoul Curtis-Machin said of a possible Wyevale takeover: "There's not much you can do to prevent something like that happening or why would you want to? It's the natural course. (Consolidation) would mean potentially less market for products but that said there is more consolidation down the chain."

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