UK’s largest discount book retailer completes MBO

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Remainders Ltd, the UK’s largest discount book retailer, which trades as The Works, Banana Bookshop and the Book Depot has undergone a management buy-out backed by Primary Capital for an undisclosed sum.

With 174 outlets in the UK and two in the Irish Republic, and a head office and warehouse distribution centre at Midpoint Park, Minworth, near Birmingham, Remainders has an annual turnover of £73 million and employs over 1500 staff.

The Works is Britain’s leading discount book retailer offering a wide range of high quality products at low prices, creating an excellent offering for customers.

The MBO team – led by incoming chairman Terry Norris, Chris Maddox, managing director and Julian Tucki, purchasing & marketing director – intend to continue opening new outlets over the next five years.

“The book retailing market is dynamic and has experienced significant changes in recent years,” commented Tucki. “Together with our recent diversification, excellent store portfolio and strong and experienced management team we are very well placed to identify new and complementary product ranges to appeal to niche customer groups.”

Norris developed Cityvision from a £1 million to £80 million turnover business, which he sold out to Blockbuster Corporation whilst Maddox has undertaken senior financial roles at Poundland and Barclay Pharmaceuticals Limited (a subsidiary of Lloyds Chemists).

Remainders has diversified its product portfolio to include a wide range of non-book products such as artist materials, gift wrap and greetings cards.

This diversification has been a major success for Remainders enabling the development of niche markets and higher margin product lines. It has also enabled Remainders to develop its own brands.

Remainders has also expanded its book range away from remainder stock. They also sell certain promotional titles some of which are printed exclusively for them and some recently published books.

The “Works” name is used for the majority of High Street locations with “Book Depot” and “Banana Bookshop” used in factory outlets.

Phil Burns, partner with Clearwater Corporate Finance plc said; “I am delighted the transaction has reached a successful conclusion. The business has reached an exciting stage in its development and I have no doubt that the new management team with the support of Primary Capital will take it from strength to strength.”

Working with Phil Burns were deal leaders Gareth Iley and Karen Edwards.

Graham Heddle and Rob Foreman led the transaction on behalf of Primary Capital. Heddle commented; “The Buy-Out of Remainders falls firmly within Primary’s key investment criteria; a strong management team, in a market leading business with excellent growth potential over the medium to longer term.”

Graham Heddles joins the board on completion of the transaction.

Steve Lewis, Bank of Scotland’s director of Structured Finance in Birmingham said; “The UK has one of the most fiercely competitive book markets in the world. Remainders is a good example of a niche retailer with a robust business plan and a clear vision of where they sit in the market. The skill set of the management clearly gives scope for further growth.”

Jones Day Gouldens in London acted as legal advisers to Primary and newco with Gateley Wareing in Birmingham advising the MBO team.

Bank of Scotland Corporate Banking were advised by Wragges in Birmingham.

Deloitte & Touche, Birmingham, provided transaction services work for Primary Capital and Bank of Scotland.

The vendors were advised by KPMG Corporate Finance and DLA in Birmingham.