Jan. 27 (Bloomberg) -- McColl’s Retail Group Ltd., the owner of 1,276 convenience stores and newsagents, will start a rash of possible initial public offerings by U.K. retailers this year after announcing plans to join the stock market next month.
McColl’s intends to raise 50 million pounds ($83 million) to pay down debt, while Cavendish Square Partners and the retailer’s executive directors will sell some of their shares, according to an e-mailed statement today. Cavendish owns 20 percent of the company, with management holding 80 percent.
A recovering economy and improving consumer confidence are leading some private-equity backed U.K. retailers to consider listings. Pets at Home, fashion chain Fat Face, discount retailer Poundland and department-store owner House of Fraser have all been reported to be looking at IPOs.
McColl’s will use proceeds of the share sale to pay down debt, it said. The retailer is seeking to benefit from a shift in U.K. consumer habits away from big weekly trips to the supermarkets and toward more frequent visits to convenience stores and online shopping.
McColl’s plans to have 1,350 convenience stores and newsagents by the end of 2016 and said it’s “well placed to capitalize on the growth of the U.K. convenience sector.”
Convenience stores now account for about a fifth of the grocery industry and are growing at more than 5 percent a year, McColl said, citing Institute of Grocery Distribution data.
J Sainsbury Plc, the U.K’s second-largest food retailer, said this month that the number of its smaller stores has overtaken the number of its supermarket.
McColl’s today reported same-store sales growth of 2.2 percent in 2013, compared with 2.6 percent the previous year.
Operating profit increased to 23.3 million pounds from 21.3 million pounds in 2012 and total revenue advanced to 869.4 million pounds from 844.7 million pounds last year, it said.
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