Countrywide Farmers is to acquire the Cornwall Farmers country stores trading business. The £6.05 million deal, expected to complete in September, makes Countrywide the UK’s largest rural retailer.
The agreement will see Countrywide operate the chain of 12 Cornwall Farmers stores across Devon and Cornwall. Cornwall Farmers retains the freehold of the properties, with Countrywide entering into long lease agreements as tenant. The Cornwall Farmers name will be retained by the new operator in Cornwall and Devon, but a decision has not been reached on the Patch and Acre brand and format that is being rolled out across the chain with the help of a £920,000 Regional Growth Fund grant. Nor is it clear what will happen to Cornwall Farmers’ distribution of Harpers Home Mix feed products, fertilisers and seeds - sectors Countrywide exited at the end of 2014.
The latest acquisition takes the number of rural stores under Countrywide ownership and management to 66, creating the largest store group of its kind in the UK. The business has three new branches, in Shrewsbury, Salisbury and Swansea, due to open in the next couple of months.
Cornwall Farmers has recently returned to profitability after a difficult period which saw it sell its crop protection business to Hutchinsons and the farm machinery sales and servicing operation to two local engineering companies. The business made a profit of £346,600 on sales of £26.26m in the year ended September 30th 2014, compared to £888,900 and £32.3m in 2013. Net debt fell to £1.31m from £1.97m, but reserves remain at a negative £2.57m.
The co-operatives directors stated in the last annual report that they were confident their three year turnaround plan was working. It appears the business will use the proceeds of the sale to rebuild its reserves and continue as a property company on behalf of its farmer members.
Countrywide divested the businesses making up its agriculture division from late 2014, with the feed business sold to ForFarmers, crop protection to Hutchinsons and grain trading to Openfield. At the time, Countrywide chief executive John Hardman said the aim was to invest in the retail store operation now the core business, as well as its Energy and Turf & Amenity divisions. It has already invested over £5m in a new IT platform to integrate its stores, sales teams, online, catalogue and loyalty card schemes from mid 2016, a ‘transformational’ facility that will be extended to the former Cornwall Farmers stores and customers.
Commenting on the latest deal, Mr Hardman says: “This opportunity to bring together these two highly respected brands creates a stronger offering to our customers. Cornwall Farmers has a long and proud history with experienced, knowledgeable staff. We look forward to welcoming them and the store network in Cornwall and Devon to the Countrywide family.” He adds that the additional coverage increases opportunities for the Energy and Turf & Amenity businesses.
For Cornwall Farmers, chief executive Simon Birch adds: “This deal is good news for our customers in the South West. It combines our local knowledge and expertise with Countrywide’s national buying power and multiple sales channels including online and click and collect services. Importantly, it ensures continuity of service for the rural communities Cornwall Farmers has served in Cornwall and Devon for many years, with access to the same network of stores, staffed by the same people.
“In agreeing a sale, we wanted to find a partner who would continue to serve our rural communities across Cornwall and Devon and provide greater customer choice. The deal with Countrywide does all these things and allows Cornwall Farmers to retain a strong property asset base with recurring income from a secure long-term tenant.”
Mr Hardman concludes: “Both business strategies have followed parallel paths in recent years allowing each business to focus on delivering a quality range of products and services to make country life better. We are committed to delivering exceptional service and value to the rural sector, especially at a time when UK farming is facing considerable challenges on a number of fronts.”