The Business
JTF is a cash & carry discount wholesaler of a wide range of household and seasonal products, with annual turnover of around £50 million. It operates from nine locations across the North of England and the Midlands, with the units largely situated in out of town locations. The head office is located alongside its central distribution centre in Tuxford, Nottinghamshire, adjacent to the A1.
Through the strength of its supply chain, JTF is able to source products at highly competitive prices and to offer to its members everyday products at consistently low prices and one off “bargains”. JTF has more than 350,000 active members and is in the process of expanding its store portfolio, which will include the introduction of ‘open to the public’ stores.
The Transaction
Endless stepped in to acquire the business in Spring 2009 and provided turnaround funding to support the business ahead of its working capital build for the key Christmas sales period. The business was incurring consistent and substantial losses and consequently was unable to invest sufficiently in new stock for each key sales season. The investment from Endless and the subsequent equity provided by the new management team has provided a firm financial base from which the turnaround in performance can be driven, in the process securing the future of almost 700 jobs.
Value Creation
Endless has introduced and partnered with a management team that had previously operated successfully within the discount retail space on several occasions. Led by retail entrepreneur Anthony Solomon, both the Board of Directors and the business have been revamped during 2009. As a result, the business has seen dramatic changes in its overhead base and its buying culture, which has led to an immediate improvement in its performance. Of particular note is the increase in product margins delivered following an intense focus on merchandise and the sourcing processes.
Both Endless and the new management team are supporting JTF with additional funding to help it grow its store portfolio over the next two to three years.
The Endless Difference
At a time when both investors and banks were withdrawing from UK retail in all ways possible, Endless was prepared to support JTF and help drive its turnaround. By partnering with Anthony Solomon once again, the JTF business is on track to deliver a strong first year with the prospects for the future looking to be extremely positive. The approach and partnership developed by Endless and Anthony Solomon is, in our view, a unique offering to UK retail turnaround and we expect to be co-investing in further opportunities shortly.