Wyevale nervous as it awaits outcome of HBOS/Lloydstsb merger

With recession hitting, country garden centres are facing uncertainty in finding the cash to expand and are worrying about whether to cheapen their offer, say experts.

The Government has banned short selling of shares for four months. This has been blamed for driving down the share price of Wyevale’s chief lender HBOS,  that is to be rescued by a takeover from Lloyds TSB.

HTA retail committee chair Caroline Owen says: “Borrowing money from financial institutions is difficult at this time. They are being cautious but I would hope that does not hamper the garden centre industry.

“I don’t think four months is long enough. But it’s not up to the Government to run the share market.

“Our new site in Soham is funded but we’re working through planning permission.”

Other centres, such as David Danning’s proposed one on the old Probus Garden site in Cornwall are having difficulties finding funding.

And Wyevale’s plans could be put on hold too.

A Wyevale representative said: “HBOS is Wyevale’s backer and the HBOS issue is being looked at by Lloyds. It’s a pretty delicate question.”

WCC representative Ewan Hunter said: “We’re watching with interest the outcome of the proposed merger.”

Wyevale is believed to be concerned about future projects and what Lloyds TSB’s decision on the future of the corporate lending part of HBOS will be.

Wyevale has building plans at Sanders in Somerset, Cardiff and Faversham.

Hammond Phillips director Mike Gilbert said: “building costs and investment values are affecting values of new sites. It is getting harder to put together the money for land. This may force people to look at cheaper forms of building. They may cut back on finishes.”

Garden centre architect HPW director Simon Kirton said: “Each client has a different focus for value engineering. To save money they could make a smaller building. You can’t pare down too much because garden retail must live up to modern retail standards. I would expect clients will be looking to spend less on their developments when planning their projects.”

Meanwhile, consultant Alistair Lorimer says garden centres should maintain the quality of their offer or you will lose your customers:

"When I was at Jardinerie during the last recession on the 1990s we wobbled and thought ‘lets have a strong value offer across the board.’ We bought in plants of lower quality and in hindsight that was a mistake. Marks & Spencer said at the time ‘maintain your quality to stick with the customers you have got and project an offer appropriate to them. Otherwise in 12 months time when things have settled own you might have lost your customers and it will take as long to get them back.'

“I’m advising my clients to advertise their way out of recession of they are to spend more money on anything.”


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