B&M squeezed as shoppers tighten belts

B&M Bargains’ share price crashed yesterday amid a slowdown in consumer spending, as its billionaire founder Simon Arora prepares to stand down after 18 years in charge.

The company’s value dropped by 14pc after it revealed that pre-tax profits will be £70m lower than last year following belt-tightening by shoppers in the face of surging inflation.

It wiped about £40m off the family fortune of Mr Arora, who together with his brother, Bobby, built B&M into a 700-store nationwide brand after acquiring it as a small Blackpool grocery shop chain.

The retailer sells everything from homeware to toys to frozen foodstuffs, competing with other bargain retail brands such as Aldi and Lidl.

Mr Arora said: “Our customers are having to cope with a significant increase in the cost of living, making spending behaviour in the year ahead difficult to predict.”

He will be succeeded as chief executive by Alex Russo, B&M’S current chief financial officer.

The Arora brothers bought B&M in 2004 when it had 21 shops in the Blackpool area. Over the following 13 years they turned it into a nationwide brand, culminating in the company listing on the London Stock Exchange in 2017.

Since floating at 270p per share, B&M has grown steadily in value with the group currently worth £3.9bn. The retailer has 710 stores spread across Britain as well as a presence in France.

In January the Arora siblings’ Luxembourg investment vehicle, SSA Investments, sold a £234m stake in B&M, amounting to 40m shares or 4pc of the company.

Bobby Arora remains a director of the company while Simon is to retire from the chief executive’s seat early next year.