Bunnings must ‘learn like crazy’ in UK: John Gillam

Bunnings Warehouse boss John Gillam has talked down the risks from Britain’s planned exit from the European Union.

Managing director John Gillam says Bunnings has to ‘learn like crazy’ to succeed in Britain.

Bunnings Warehouse boss John Gillam has talked down the risks from Britain’s planned exit from the European Union while urging patience as the group “learns like crazy” through its daring British expansion.

Speaking at a corporate lunch in Melbourne yesterday, Mr Gillam insisted the long-term opportunity in the British market was exciting and its $705 million play for the ailing Homebase earlier this year set a platform for a “new ­Bunnings”.

“We don’t think we’ve paid too much for a poorly performing company,” he said at an Australian British Chamber of Commerce lunch.

“It’s very hard to get a network and start from scratch and that’s proven to be the case in (the Australian) market. We’ve paid for a platform and we think Homebase has the ability to be a Bunnings.”

Wesfarmers is planning a steady rollout of the Bunnings Warehouse brand in Britain and Ireland, with Mr Gillam noting that plans to open four to six ­rebranded outlets by June 30 were “on track”.

Eventually the group will completely overhaul all Homebase outlets with the Bunnings branding, but this will take place steadily over a broad two- to five-year time frame as it perfects its strategy.

“We don’t expect the first store to knock the light outs, but we ­expect it to be more right than wrong, and from there we’ve got to learn like crazy,” he said. “We could be in stage one for quite some time and that won’t ­bother us.”

The Bunnings boss added that the integration was proceeding “boringly well”, while also warning significant supply chain work was needed to repair a business plagued by poor stock availability.

“Out of stock levels were possibly the worst we’ve seen from any player of scale in our sector globally,” Mr Gillam said.

Not long after Bunnings purchased Homebase, confidence in the British economy was hit by the yes vote in the Brexit referendum. The vote caused a severe weakening of the pound to the detriment of overseas operators, but Mr Gillam said it would not ­affect Bunnings’ plans.

“Brexit was a very obvious risk,” he said. “(But) over the long term we think the market characteristics that attracted us to the UK don’t change.

“The ageing housing stock gets older, the population ages and has more needs, and the population grows and has more demands. And the way that people use their homes and gardens … we think supports a strong home improvement and garden operator if we can get our offer right.”

The head of Bunnings for the past 12 years added that the shock Brexit vote could offer opportunities in expanding its network as property prices potentially stall.

“The UK property market post-Brexit has probably got a little bit more pause in it in terms of price appreciation than it had ­before and we certainly don’t want to waste that opportunity.”