The Business
TJ Hughes is the UK’s largest discount department store chain. The business has 57 stores nationwide and stocks a wide range of products across homewares, soft furnishings, beauty and fragrance, clothing, toys and electrical goods. TJ Hughes offers great prices and discounts on many famous brands including Dyson, Kenwood, Sanyo and Panasonic among others. The company also has its own proprietary brands.
The Transaction
Endless partnered again with retail entrepreneur Anthony Solomon for the acquisition of TJ Hughes, following on from the highly successful turnarounds of JTF Wholesale and The Works. TJ Hughes had a very difficult 2010, incurring losses of more than £10 million, leading to a desperate requirement for new funding in March 2010 to avoid insolvency. Endless provided a very significant capital injection at that time to fund working capital and give the business some breathing space to develop a turnaround plan. Solomon joined the business as Executive Chairman, with David Luper joining the Board with primary responsibility for the buying department.
Value Creation
The business has a strong customer following and a very attractive value proposition but needs to be returned to profitability very quickly by strengthening buying practices, streamlining operations, improving product offering and improving the retailing principles. The level of losses incurred in 2010 are not sustainable and urgent action is required.
The Endless Difference
Despite the uncertainty surrounding the retail sector, Endless felt strongly about the potential of the business which encouraged our investment to be made to save it from insolvency in March 2011. Our focused approach to due diligence and our knowledge of the sector allowed us to complete the transaction in less than 2 weeks.
Update - July 2011
With great disappointment, a viable turnaround plan could not be established for the business. Ernst & Young (Manchester office) were appointed administrators to TJ Hughes on 30 June 2011 and were able to secure going concern sales for many of the stores. For those stores that ultimately closed, many of the locations have since been occupied and re-opened under new brand names.