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Simon Arora Diversified Gains from B&M Before the Retail Major Tanked. Here’s How

By: News Desk

Edited By: Shankhyaneel Sarkar

News18.com

Last Updated: October 03, 2022, 16:16 IST

London, United Kingdom

Simon Arora diversified the gains he and his brothers made from retail major B&M before the retail chains fortunes tanked (Image: McKinsey)

Simon Arora diversified the gains he and his brothers made from retail major B&M before the retail chains fortunes tanked (Image: McKinsey)

Simon Arora once told McKinsey in an interview that successful businesses should know when to time correctly their exit from or entry into a particular business. His diversification of B&M is an example.

Simon Arora, the billionaire co-owner and chief executive of B&M, which was one of the most successful retailers during the pandemic, shifted the wealth amassed by him and his brother Bobby into other investments, including exchange-traded funds, corporate bonds and real estate, news agency Bloomberg reported.

B&M European Value Retail SA is currently struggling due to a cost-of-living crisis, falling pound and rising mortgage rates as all these are affecting consumers. However, this is unlikely to impact the fortunes of Simon Arora and his brother Bobby Arora and Robin Arora.

B&M’s stock is down by 50% this year and Simon Arora announced earlier this year that he will step down within a year. In January, months before his April announcement Arora and his family offloaded 234 million pounds ($261 million) of stock and also sold B&M’s London listing in 2014, Bloomberg reported.

The Aroras also sold 2 billion pounds worth of shares in the last 20 years. They acquired the retail chain from Phildrew Investments in 2004 and turned it into a retail major with 1,100 shops in the UK and France. Before their takeover it was an ailing regional chain of 21 stores.

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The B&M outlets sell everything from food to toys, DIY supplies and gardening products. The former McKinsey & Co. analyst and his family became one of the UK’s richest as they turned around the fortunes of B&M.

According to the Bloomberg Billionaires Index, Arora and his brothers - Bobby, 50, and Robin, 37 have 9% of their total fortune tied to B&M. They have a combined fortune of $2.7 billion.

After taking over B&M, the Arora brothers introduced new product lines like toys and pet goods, but their diversification began in 2012 when they sold a 60% stake of B&M to US private-equity firm Clayton Dubilier & Rice for 575 million pounds.

The Aroras also purchased properties in London’s posh Belgravia district and earned more than £20 million in interest over the last decade from shareholder loans issued to SSA.

They also moved the corporate registration of B&M to Luxembourg in 2014 since it offers tax breaks on capital gains for major shareholders of local businesses but kept its headquarters in Liverpool.

Experts speaking to Bloomberg said that what Simon and Bobby Arora did with B&M shows an unlikely expansion story in the retail sector. “In business, those who do well are those who understand where their businesses are in the cycle, and time correctly either their exit from or entry into that business,” Simon Arora once told McKinsey in an interview.

(with inputs from Bloomberg)

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first published:October 03, 2022, 16:16 IST
last updated:October 03, 2022, 16:16 IST