BBQ Factory plans 10 new megastores

The BBQ Factory's foray into large format stores has been so successful it is now planning to open up to 10 megastores in the next five years, including stores in Wellington and Christchurch.

Chief executive Chris George said the firm's new Pakuranga store in Auckland had taken in half a year's budgeted revenue in just four weeks.

"It's exceeded all our wildest expectations -- and this is in the middle of winter, which is nothing compared to the barbecue season," he said.

Several more branches would be opened in the next couple of years.

"We've got our finger on the pulse of another four, to replace existing stores and locales with bigger operations," he told the Dominion Post.

Retail investment company StoreFund, in the middle of $30 million initial public offering, has a conditional agreement to buy the BBQ Factory for $21.2 million, if the float is successful.

The offering is underwritten by ASB Securities and closes on June 25.

The deal has sparked an overhaul of the company, which sells barbecues, spa pools, outdoor equipment and home heating -- including woodburners from its widely known Kent range.

In late April, the BBQ Factory ditched an arrangement with the Wrightson rural supplies chain that saw the company establish a presence in 23 Wrightson stores.

Mr George said the Wrightson arrangement had been successful at first but recently not enough attention had been paid to the brand.

This had held the BBQ Factory back from opening its own stores in certain locations.

In the past month, the company has opened two new stores in Dunedin and Queenstown to take its total to 19.

It plans to expand that to as many as 28 stores in the next few years.

While Mr George said taking the concept outside New Zealand was "definitely on the cards" with Australia a logical step, any foray there would not necessarily involve opening its own stores.

"But we're not ruling anything out."

The company is also eyeing up to five acquisitions of niche operations in the heating and outdoor equipment areas.

"Having the money on the table means we can go talk to (potential targets)," Mr George said.

On average, the company has seen same-store growth in revenue of 12.5 per cent a year over the past three years.

StoreFund's prospectus said the retailer is forecast to report pro-forma earnings before interest, tax and amortisation of $4 million for the year to June 30, 2004, from revenue of $33.3 million.

The BBQ Factory is also rapidly expanding its product range.

Solar heating products are set to be introduced soon after StoreFund's listing, and gas water heating products are also being looked at.

Mr George said government initiatives to encourage people away from electric water heating were encouraging, and the company planned to lobby for similar incentives to encourage people to replace open fires and old woodburners with low emission models.

- NZPA