New H&L owners to upgrade three stores, rebrand AgroGrace
Construction retail chain Hardware & Lumber Limited (H&L) will spend $200 million to upgrade key stores and will be replacing AgroGrace with a different brand, according to Chief Executive Officer Donna Doran.
The plan involves relocating Rapid True Value from its current spot at the upper segment of Manor Park Plaza to larger shop space in the same complex previously occupied by department store Lee's Fifth Avenue.
H&L will also expand the store in Mandeville and upgrade Ocho Rios.
The chain comprises 10 Rapid True Value stores and eight AgroGrace stores acquired by Argyle Industries Inc, from GraceKennedy last year. Argyle's owners include Joe Bogdanovich, Abbeco Invest SA, and Greystone Equity Partners Inc along with its affiliates and associates.
Following the takeover, H&L was delisted in June.
"We are going to rename AgroGrace in the fourth quarter and will relaunch the Rapid True Value brand," said Doran in an interview with Wednesday Business following the annual general meeting held at the Spanish Town Road head office in Kingston.
H&L will relinquish the AgroGrace name as it is owned by GraceKennedy, Doran explained, without revealing what the new brand would be.
Doran described the company as entering into a new paradigm but one that remains set to maintain shareholder value. H&L earned net profit of $48.5 million on revenues of $1.9 billion for the first quarter 2016, or 40.4 per cent higher profit according to the financials presented at the meeting.
In H&L's annual report 2015, the executives revealed steps to refinance existing loan balances, provide lines of credit to suppliers, and boost working capital. H&L indicated during its report that some hardware wholesalers and developers are finding it increasingly difficult to pay debts owed to the chain, pushing three-month receivables above $103 million. H&L also described the ownership transition from GraceKennedy to Argyle Industries as "seamless" in its report.
For the December year end, the company earned net profit of $164 million on revenues of $7.4 billion. Its total receivables are relatively low at $388 million, some $170 million of which are past due but not impaired.
The bulk of H&L's revenues, $5.7 billion, came from the household, hardware and building products segment, trading as Rapid True Value.
Sales for the agricultural products and equipment segment, trading as AgroGrace, totalled $1.7 billion. The AgroGrace segment was negatively impacted by the extensive drought during the period, reminiscent of the previous year, the company said. Revenue fell 4.3 per cent in that segment.