Storehouse plc

Storehouse plc was a large British retail group that operated during the late 1980s and 1990s. It was formed in 1986 through the merger of Habitat Mothercare PLC and British Home Stores PLC, bringing together a broad collection of high-street, specialist and design-led businesses. The merger gave British Home Stores shareholders 55% of the resulting company, while Habitat Mothercare shareholders held the remaining 45%. Terence Conran, whose retail and design interests were central to the Habitat side of the combination, became chairman and remained in that role until 1990. The group’s portfolio extended well beyond a single retail format. Its principal businesses included British Home Stores, Mothercare and Habitat, alongside Conran’s, the Conran Design Group, Conran Studios, Richard Shops, NOW, Heal’s and The Conran Shop. The company also held interests in other businesses, including a 50% stake in SavaCentre through British Home Stores, a 20% stake in Fnac through Mothercare, and a 50% stake in Conran Octopus Publishing. This structure made Storehouse a diversified retail and design group rather than a conventional department-store operator. In 1987, Storehouse expanded its retail activities through the establishment of the Anonymous chain and introduced Storecard, an in-house credit card operated in association with Citibank. The same period brought increasing City speculation that the group was worth less as a combined entity than the value of its individual businesses. Mountleigh made an approach in September 1987 that valued Storehouse at £1.8 billion, followed by an approach from Benlox Holdings plc, used as a vehicle by financier Peter Earl, that valued the company at £2.007 billion. Storehouse rejected both approaches. The group’s financial performance deteriorated sharply after an initially profitable period. Storehouse reported a pre-tax profit of £114.9 million in 1987–88, but pre-tax profit fell to £11.3 million in the following year. In response to the changing business environment, the company appointed Michael Julien as chief executive in 1988, replacing Conran in the executive leadership role while Conran continued as chairman. Julien reorganised the group into three divisions: British Home Stores; Speciality Retailing, covering businesses such as Mothercare, Richard Shops, Blazer, Anonymous and Jacadi; and Home Furnishing, covering Habitat, Heal’s and The Conran Shop. Leadership changed again when Julien retired on health grounds in 1992 and David Dworkin, previously chief executive of British Home Stores, succeeded him. Storehouse also began disposing of or reshaping parts of its portfolio. Habitat was sold to Ikano in 1992, while Richard Shops was sold to Sears plc. In 1996, Storehouse bought Children’s World from Boots and rebranded its superstores as Mothercare World, reinforcing the company’s shift toward its childcare and mother-and-baby operations. After several years of difficult trading across the group, Storehouse sold British Home Stores to Philip Green for £200 million in 2000. Following the transaction, the company changed its name to Mothercare plc. Storehouse therefore ceased to exist as the group’s corporate identity, although the Mothercare business continued under its new name. Its history illustrates both the opportunities and difficulties of assembling a diversified high-street retail portfolio around a mixture of mass-market stores, specialist chains and design businesses.

Storehouse plc was established in 1986 when Habitat Mothercare PLC merged with British Home Stores PLC. The transaction combined Terence Conran’s design-oriented retail interests with one of Britain’s established high-street department-store businesses. British Home Stores shareholders received 55% of the new group and Habitat Mothercare shareholders received 45%. The resulting company retained a broad group of brands and investments, including British Home Stores, Mothercare, Habitat, Conran’s, the Conran Design Group, Conran Studios, Richard Shops, NOW, Heal’s and The Conran Shop. Its interests also included stakes in SavaCentre, Fnac and Conran Octopus Publishing. Storehouse expanded during 1987 by establishing the Anonymous retail chain and launching Storecard, an in-house credit card developed in association with Citibank. However, the group soon faced doubts about whether its conglomerate structure created more value than its constituent businesses could generate separately. Mountleigh approached the company in September 1987 with a proposal valuing Storehouse at £1.8 billion. A further proposal came from Benlox Holdings plc, a small engineering company used as a vehicle by financier Peter Earl, with a stated valuation of £2.007 billion. Storehouse rejected both approaches. The company’s financial results weakened substantially after 1987–88. It recorded a pre-tax profit of £114.9 million in that financial period, followed by a pre-tax profit of £11.3 million in the next year. In 1988, Michael Julien, formerly managing director for finance and administration at Guinness plc, became chief executive. Terence Conran remained chairman until 1990. Julien divided Storehouse into three operating areas: British Home Stores; Speciality Retailing, comprising Mothercare, Richard Shops, Blazer, Anonymous and Jacadi; and Home Furnishing, comprising Habitat, Heal’s and The Conran Shop. Julien retired on health grounds in 1992 and was replaced as chief executive by David Dworkin, who had previously led British Home Stores. That year, Storehouse sold Habitat to Ikano and Richard Shops to Sears plc. These disposals reflected the pressure on the group to simplify or refocus its collection of retail businesses. In 1996, Storehouse acquired Children’s World from Boots. The acquired superstores were subsequently rebranded Mothercare World, strengthening the Mothercare division’s role within the group. Storehouse ultimately responded to several years of difficult trading by selling its largest mass-market retail business. In 2000, British Home Stores was sold to Philip Green for £200 million in cash. Storehouse then changed its name to Mothercare plc. The change ended Storehouse as a corporate identity and marked the transformation of the former diversified group into a company centred on the Mothercare business.

• 2000

  British Home Stores sold; company renamed

  [1]Storehouse plcen.wikipedia.org

  British Home Stores was sold to Philip Green for £200 million in cash, after which Storehouse changed its name to Mothercare plc.

• 1996

  Children’s World acquired

  [1]Storehouse plcen.wikipedia.org

  Storehouse purchased Children’s World from Boots and rebranded the superstores as Mothercare World.

• 1992

  Portfolio disposals and leadership change

  [1]Storehouse plcen.wikipedia.org

  David Dworkin succeeded Michael Julien as chief executive; Habitat was sold to Ikano and Richard Shops was sold to Sears plc.

• 1988

  Management and divisional reorganisation

  [1]Storehouse plcen.wikipedia.org

  Michael Julien became chief executive and reorganised the group into British Home Stores, Speciality Retailing and Home Furnishing divisions.

• 1987

  New retail and credit initiatives

  [1]Storehouse plcen.wikipedia.org

  Storehouse established the Anonymous chain and launched Storecard in association with Citibank.

• 1986

  Storehouse is formed

  [1]Storehouse plcen.wikipedia.org

  Habitat Mothercare PLC merged with British Home Stores PLC to create Storehouse plc, with British Home Stores shareholders holding 55% and Habitat Mothercare shareholders holding 45%.

A diversified British high-street retail and design group combining mass-market department-store operations with specialist fashion, childcare and home-furnishing businesses.

• Department-store retail

  British Home Stores

  British Home Stores was Storehouse’s principal mass-market department-store business. It formed the largest and most commercially significant part of the group and provided a broad range of high-street merchandise. The business also included Storehouse’s 50% stake in SavaCentre. British Home Stores was sold to Philip Green in 2000.

• Mother-and-baby retail

  Mothercare

  Mothercare was the group’s specialist mother-and-baby retail business. It was part of the original Habitat Mothercare combination and later became increasingly central to Storehouse’s identity. After the sale of British Home Stores, the parent company adopted the name Mothercare plc.

• Home furnishings

  Habitat

  Habitat was the design-led home-furnishing business associated with Terence Conran and the formation of Storehouse. It represented the group’s modern furniture and interiors positioning and was grouped within the Home Furnishing division. Storehouse sold Habitat to Ikano in 1992.

• Design-led home retail

  The Conran Shop

  The Conran Shop was one of Storehouse’s design-oriented retail businesses. It formed part of the Home Furnishing division alongside Habitat and Heal’s, linking the group’s retail activities with Terence Conran’s broader design reputation.

• Home furnishings

  Heal’s

  Heal’s was included in Storehouse’s Home Furnishing division. Within the group structure it sat alongside Habitat and The Conran Shop, representing specialist furniture and interior retail rather than the mass-market department-store format.

• Retail financial service · 1987

  Storecard

  Storecard was Storehouse’s in-house credit-card initiative, launched in 1987 in association with Citibank. It was intended to support customer financing and create a group-wide retail service connected to the company’s stores.

• 2000

  Sell British Home Stores and rename the companyM&A

  Background

  After several years of difficult trading across the group, Storehouse decided to dispose of its largest mass-market retail business.

  Action taken

  British Home Stores was sold to Philip Green for £200 million in cash, and Storehouse changed its name to Mothercare plc.

  Aftermath

  Storehouse ceased to operate as the group’s corporate identity, with the successor company focused on Mothercare.

  Sale consideration for British Home Stores. £200 million cash consideration (2000)

  Source

• 1996

  Acquire Children’s World and rebrand as Mothercare WorldM&A

  Background

  Storehouse sought to expand its childcare retail operations and build scale around the Mothercare business.

  Action taken

  The group acquired Children’s World from Boots and renamed its superstores Mothercare World.

  Aftermath

  The transaction strengthened Mothercare’s position within the Storehouse portfolio and helped prepare the group for its later name change.

  Source

• 1992

  Sell Habitat and Richard ShopsM&A

  Background

  Storehouse was reshaping its portfolio after difficult trading and pressure surrounding the value of its diversified structure.

  Action taken

  The company sold Habitat to Ikano and Richard Shops to Sears plc.

  Aftermath

  The disposals reduced the number of major retail businesses directly controlled by Storehouse and preceded a stronger emphasis on Mothercare.

  Source

• 1988

  Reorganise Storehouse into three operating divisionsStrategy

  Background

  The group had assembled a wide range of mass-market, specialist and design-led businesses, while its financial performance had weakened after 1987–88.

  Action taken

  Chief executive Michael Julien structured the company around British Home Stores, Speciality Retailing and Home Furnishing.

  Aftermath

  The reorganisation clarified the portfolio but did not prevent later disposals and the eventual sale of British Home Stores.

  Source

1. 1Storehouse plcen.wikipedia.org