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BBQ Factory is looking to expand its range to outdoor leisure equipment as the retailer seeks to regain some lost lustre under new owners.
Investment company Hellaby Holdings announced on Monday that the business was being sold to Auckland-based private equity company Capital Group - a divestment that
saw Hellaby shares soar 21 per cent yesterday upon the lifting of a trading halt.
BBQ Factory chief executive Tim Wilson said the new owners supported the move to extend the stores' range of merchandise from the existing barbecues, spa pools and outdoor furniture, to categories such as outdoor play equipment.
"It's going to be merchandise that you are going to be able to purchase to add leisure or fun in your lifestyle at home, and typically in the backyard. We're just working out some ideas about what that might look like at the moment."
The expanded range was expected to start appearing in stores within the next six months, he said. It was also eyeing up expansion after a contraction in store numbers under Hellaby. A third of BBQ Factory stores in regional centres such as Hastings and Palmerston North were shut down in a bid to stem losses, leaving only 13 stores nationally.
Wilson said it was looking for replacement stores while some markets will have additional stores added. Some of the existing stores may also be moved to locations offering better sizing.
"The future is about building the business genuinely into a home leisure outdoor one stop shop.
"In a way we'll be creating our own segment - there are other retailers who are selling barbecues and outdoor furniture as we do now, but we want to see ourselves as a genuine outdoor solution destination."
Despite the merchandising shift, Wilson said the name BBQ Factory would remain.
"From a recognition point of view, [the brand] is extremely strong, and I think it's one of the most valuable things that we do have - so it's about changing its focus in the market."
The offloading of what has been a blight in Hellaby's portfolio of investments saw its stock gain 29c to close at $1.64.
But the share price still remains well off a 12-month high of $3.60.
ASB Securities associate adviser David Le Breton said the market has viewed the announcement positively.
"The share price has just progressively gone down with tough trading conditions in some of its businesses, so they've been affected by a slow economy.
"There hasn't been a lot of positive newsflow from the company, so suddenly we've got something that is actually positive for the company."
Hellaby chief executive John Williamson said earnings before interest, tax, depreciation and amortisation for the year ending June 30 was now likely to be around $40 million following the sale, rather than $45 million as previously indicated. It will also incur a transactional loss of around $10 million before tax.
But the sale would improve its ebitda by $5 to $7 million a year, he said.