London, Oct 3, 2022- Simon Arora spent almost two decades transforming a money-losing retail chain into a European discount juggernaut, making the former McKinsey & Co. analyst and his family one of the UK’s richest, the media reported.
But lately the company that made them rich — B&M European Value Retail — is struggling as a cost-of-living crisis, plunging pound and surging mortgage rates rattle consumers. The stock is down more than 50 per cent this year, and Arora just retired as chief executive officer after signalling in April he planned to stay on for a further 12 months, Bloomberg reported.
For Arora, 52, his brother Bobby and their family, the painful slide has been softened through efforts in recent years to shift their wealth from B&M stock into other investments, including exchange-traded funds, corporate bonds and real estate, Bloomberg reported.
The latest B&M sale was in January, when Arora and his family offloaded $261 million of stock in the Luxembourg-based company. They’ve sold a total of about 2 billion pounds worth of shares over the past decade, including in B&M’s London listing in 2014.
Arora and his brothers — Bobby, 50, and Robin, 37 — now have a combined fortune of about $2.7 billion, with only about 9 per cent tied up in B&M shares, according to the Bloomberg Billionaires Index.
“Simon Arora is a clever guy and he took advantage of a niche in the market — for discount retail,” said Tony Shiret, an equities analyst at Panmure Gordon who has a sell rating on the stock. “Him bailing out now and selling his stake down suggests we’re getting to the end of that window,” Bloomberg reported.
B&M warned in May that earnings will fall this year as the higher cost of living dents customer demand for big-ticket items such as beds and hot tubs, and shifts spending toward essentials like food and smaller consumer goods.
After surging during the pandemic, B&M is among the worst-performing stocks on the UK’s benchmark FTSE 100 Index this year.
By diversifying their wealth, the Aroras are preserving the fortune they’ve made from B&M, which has more than 700 stores across the UK and France selling household goods at cheap prices, Bloomberg reported. (Agency)