Victorian Plumbing Acquires Rival Victoria Plum: Strategic Growth and Future Plans

Victorian Plumbing Acquires Rival Victoria Plum: Strategic Growth and Future Plans

Victorian Plumbing, a leading online bathroom retailer, has strategically acquired its competitor Victoria Plum, just eight months after Victoria Plum was rescued from administration by another company.

Acquisition Details and Strategic Value

In an announcement to investors, Victorian Plumbing confirmed the purchase of AHK Designs Ltd, the entity that acquired Victoria Plum in September for £22.5 million. This figure represents half of Victoria Plum’s projected annual revenue and underscores the substantial strategic value of the Victoria Plum brand and its associated intellectual property.

Victorian Plumbing highlighted the ongoing cost reduction program that was implemented following Victoria Plum’s administration. The company plans to maintain normal trading operations and anticipates that Victoria Plum will achieve near break-even financial results in the second half of 2024.

Future Plans and Financial Outlook

Further details regarding the future strategy and integration plans will be revealed in Victorian Plumbing’s interim results on May 28.

Mark Radcliffe, CEO of Victorian Plumbing, expressed his enthusiasm about the acquisition, stating, “I am delighted to announce the acquisition of Victoria Plum, a well-established brand with a solid customer base, reliable suppliers, and an extensive product range. This acquisition aligns with our growth ambitions. We are excited to welcome the Victoria Plum team to our group and are committed to providing customers with an excellent selection of bathroom products and accessories.”

Radcliffe emphasized that this acquisition marks a significant strategic milestone for Victorian Plumbing. Combined with their investment in a new distribution center, this move presents a unique opportunity to enhance shareholder returns.

Ending a Long-standing Rivalry

This acquisition concludes the longstanding rivalry between the two similarly-named companies. When AHK Designs purchased Victoria Plum, Radcliffe had expressed significant concerns for customers and suppliers. In 2018, Victoria Plum won a court battle against Victorian Plumbing, receiving £1.75 million over trademark infringement related to online advertising and search.

Financial Impact and Historical Context

The pre-pack deal in September, orchestrated by administrators Ernst & Young, involved AHK Designs paying £7.8 million. However, this transaction left behind substantial debts amounting to £24.3 million. Victoria Plum’s customers were owed £2.25 million, including nearly £222,000 in unpaid refunds, £665,000 in unfulfilled trade orders, and £1.36 million in incomplete design and installation orders.

For the six months ending March 31, unaudited management accounts revealed that Victoria Plum had gross assets valued at £15.8 million and recorded losses of £3.3 million.

Strategic Integration and Growth Potential

Victorian Plumbing’s acquisition of Victoria Plum is a strategic move designed to strengthen its market position and expand its customer base. By integrating Victoria Plum’s established brand and resources, Victorian Plumbing aims to drive growth and improve operational efficiency.

This acquisition not only resolves the historical competition between the two companies but also sets the stage for a more robust and competitive presence in the online bathroom retail market. With the ongoing cost reduction measures and the synergies expected from this acquisition, Victorian Plumbing is poised to enhance its market share and deliver increased value to its shareholders.