Sketchley Retail-The Real Story

Sketchley’s announcement of the sale of Sketchley Retail to the Minit Group for £1.23m has raised much industry interest in what is planned for a strong brand name and a business which has in the past three years suffered aggregate losses amounting to £30.1m.

The approval of the disposal of Sketchley Retail – comprising of the Sketchley drycleaning chain, drycleaning outlets trading as Jeeves of Belgravia, Tothills and Lilliman & Cox, and the SuperSnaps photoprocessing business – was given at an extraordinary meeting of Sketchley Plc last month. On the passing of the resolution, John Jackson, former director of Sketchley Plc, left the company.

Reports since Christmas have repeatedly indicated moves by the Sketchley group to sell its retail division and the approval of the shareholders is the finale to a series of rumoured negotiations with a variety of interested parties including the NatWest Equity capitalist group, Cinven, Tesco and Sainsbury’s.

The reasons behind the sale of Sketchley Retail are evident. David Davies, chairman of Sketchley Plc, said: “Following the disposal we will now be able to concentrate our full attention on our ongoing and successful businesses, textile and utility services, providing services to corporate clients. This strategy has been well rewarded by the results of these two divisions in the past year and the outlook for the future is positive.” The reasons behind the purchase by the Minit Group are less evident. Indications are that the Minit Group’s plans for Sketchley Retail are to incorporate the Sketchley brand name into current Minit Group operations to provide multi-service units.

An industry source close to the Minit Group told LCN that the Sketchley brand name still has a dominant presence in the UK drycleaning industry, and the Minit Group would not have gone into negotiations with Sketchley if it did not envisage the continuing potential of the brand name.

It is still the case that if you ask people in the street to name a drycleaners, the business they will mention more often than not is Sketchley. The Minit Group appears to have identified the potential within its own operations to fully exploit the Sketchley brand name, despite competition from Johnson, the other dominant force in the UK drycleaning market.

Johnson is currently undergoing a national programme of rationalising and rebranding – the Johnsons brand name is not yet as nationally strong as Sketchley’s as up until the initiation of the current programme the group operated under a number of different trading names.

The industry source implied that the Minit Group’s intention was to provide a “total service” for the customer, including drycleaning, shoe repairing and photo processing.

The purchase is in line with changes occuring within the Minit Group which, since its acquisition by UBS Private Equity and the introduction of a new management structure in 1997, has established a new mission for its operations. The objective, says the group, is to build, within three to five years, a unique, strong, global retail services business under the Minit umbrella, with its focus on an integrated brand building approach.

Its enormous growth potential, says the Minit Group, will be achieved through a continued emphasis on consumer convenience and service with strong backing from UBS for store expansions and acquisitions.

Sketchley Retail was unavailable to comment on the sale of its operations and Minit remained guarded about its immediate plans.

The industry source told LCN that this was because, so close to the purchase, issues were still very sensitive and the Minit Group did not wish to cause any unwarranted anxiety amongst Sketchley employees who would be expected to be nervous and insecure about the future.

Sketchley Retail is currently continuing to operate as normal. It is the Minit Group’s first intention, indicated our source, to establish new confidence within Sketchley Retail and build profitability for the operation.