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LONDON, Nov 12 (Reuters) - B&M European Value Retail
wrote down the value of its loss-making German unit
Jawoll and put it under review on Tuesday, sending shares in the
British discounter sharply lower.
Shares in B&M were down 7.4% at 0916 GMT, paring gains for
2019 to 24.3% as the performance in Germany overshadowed a solid
first half from its main UK business.
B&M, a general goods retailer selling everything from
furniture to electricals to food, has grown rapidly.
At Monday's close it had a market capitalisation of 3.76
billion pounds ($4.81 billion), which is bigger than Marks &
Spencer's.
"The strategic review may bring about a departure from
Jawoll," said analysts at Peel Hunt.
"This places a two-way pull on the shares. On the one hand,
B&M’s credentials as a European giant are tarnished but on the
other, at least here’s a management team that knows when to stop
throwing good money after bad."
B&M trades from 645 stores in the UK operating under the B&M
brand and 290 stores under the Heron Foods and B&M Express
brands.
It also has 98 stores in Germany primarily operating under
the Jawoll brand and 99 stores in France, trading as Babou.
Jawoll, which was purchased in 2014, reported a 3.2% rise in
sales but fell to a loss of 12.2 million pounds.
B&M's overall pretax profit fell 70.5% to 32.2 million
pounds which included an impairment charge of 59.5 million
pounds relating to Jawoll.
Group revenue increased 12.4% to 1.76 billion pounds.
The core B&M UK stores business, which constitutes 86% of
group sales, saw first-half like-for-like sales rise by 3.7% and
has seen "solid" growth in the third quarter so far.
"We remain cautious in light of the current political
uncertainty and its impact on consumer confidence," B&M said.
It said it would update on Jawoll when its review is
complete.
($1 = 0.7815 pounds)
(Reporting by James Davey; editing by Kate Holton and Jason
Neely)
