The British Garden Centres acquisition of Hayes Garden World is just the latest in a long series of bold and ambitious additions to what is now the largest (as measured by number of sites) garden centre groups in the UK. It serves to demonstrate the success of an independent, entrepreneurial and, most significantly, privately funded retail strategy in the garden sector. It follows the recent expansion of the equally successful Blue Diamond group which, whilst presenting a very different brand proposition, pursues a similarly ambitious and, notably,independently funded growth strategy.
The garden retail category is well served by these and comparable private and family run businesses which largely continue to demonstrate remarkable financial resilience in the face of enormous economic pressures. Some of the most successful garden goods brands, like Westland and Smart Garden, are similarly owned and run by entrepreneurs with private funding and long-term investment strategies.
Contrast these agile and vibrant businesses with comparable companies that rely on private equity (PE) funding. The list of struggling or failed PE funded businesses includes notable failures in product sourcing and manufacturing as well as some notorious retail failures and online businesses too.
While private equity should bring in much-needed capital and strategic guidance, its involvement in the UK garden market has failed to deliver the long-term sustainability, employment stability, and positive economic impacts we need. At the core of the problem is the short-term focus of most PE funds. These investors often prioritize rapid returns over long-term viability, leading to aggressive cost-cutting, asset stripping, and high debt loading. Some PE funded garden sector businesses have been left burdened with unsustainable financial structures after leveraged buyouts, leaving little room for reinvestment or innovation. It’s a miserable culture to work in if you are motivated by brand building, enhancing the consumer experience, delivering excellence, sustainable growth and a healthy work life balance.
With the recent added pressure on the future of family businesses compounded by the latest changes to IHT rules, I really hope that our family-owned garden and DIY businesses are not tempted to flirt with PE. I read this week that private equity company Hilco Capital, the former owner of Homebase (look how that ended), has completed a deal with Lakeland’s family owners to complete a buyout. Not a business in the heart of gardening retail, but the comparison with similar sized family-owned operations in our sector is relevant.
I really hope they know what they’re in for