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Blundy could enter hardware business through Masters


Brett Blundy’s focus may have been on racking up a fortune while successfully floating three of his retail operations in the past two years. But now it appears the Australian rich-lister is attempting to reinvest some of those millions he made into buying Woolworths’ hardware operations. Source: The Australian

Apparently, the seasoned retailer has made a tilt at parts of the Masters hardware portfolio and potentially also Home Timber and Hardware, which includes 43 company-owned stores and the wholesale hardware operation Danks.

It comes as JB Hi-Fi is a bidder in the Citi-advised contest for some of the retail sites that are included in the Woolworths hardware portfolio, which it jointly owns with Lowe’s out of the US.

Mr Blundy founded BB Retail Capital in 1980 and built up his initial fortune by growing a single record store called Disco Duck into a 238-store strong Sanity Entertainment Group, encompassing HMV and Virgin Entertainment, before it was divested in 2009.

Forbes estimates he is Australia’s 42nd-richest man with a fortune of $645 million.

Mr Blundy’s BB Retail may be working with JB Hi-Fi and Steinhoff, the majority shareholder of the listed Freedom Furniture.

It is also understood JB Hi-Fi and Steinhoff Asia Pacific may have submitted bids for the Masters property portfolio as part of a consortium involving other parties, including a property developer.

Some sources say the retailers are keeping their options open as to who they partner with on the process.

Already, Charter Hall is working with Bunnings, Harvey Norman and Automotive Holdings, as first foreshadowed by this column, while private equity giant Blackstone is bidding for the entire offering alone.

Metcash is vying for Home Timber and Hardware to combine with its Mitre 10 business, as is the Australian private equity firm Anchorage.

JB Hi-Fi’s interest in parts of the Masters portfolio stems from its move to push further into the home appliance sector, which would require larger format stores. Yet its interest would likely depend on whether it successfully acquires The Good Guys, which is up for sale to trade buyers through Bank of America Merrill Lynch.

Steinhoff is also bidding for The Good Guys as well as the Masters portfolio, as is Harvey Norman.

Companies that Mr Blundy has floated on the Australian Securities Exchange, including jewellery chain Lovisa and homewares retailer Adairs, were popular among investors and saw him secure lofty profits as he cashed out.

His 41% stake in Lovisa is worth $82m. He also has a proven track record in the property retail space with the float of his portfolio of bulky goods centres, Aventus, although it is understood that it is Mr Blundy’s private interests that have expressed interest in Masters, not the listed entity.

Other companies owned by BB Retail Capital are Bras N Things, Diva and Dusk, and he has cattle stations in the Northern Territory.

Meanwhile, it is understood advisers to Woolworths remain in the process of short-listing bidders for the hardware assets, with some already told they are through to the next round.

Masters has 63 stores, at least half of which are owned by the company, and estimates value the properties at anywhere between $500m and $1 billion.