B&M Makes a Move: Jersey's Charm Wins Over Discount Retailer
Company Migrates Tax jurisdiction from One Offshore Location to Another
B&M, a popular bargain retailer based in Liverpool and listed in London, has announced its plans to swap Luxembourg - its tax haven home for over a decade - for Jersey. The company expects this move to simplify its business structure and offer enhanced flexibility in returning capital to shareholders.
According to B&M's statement, the migration to Jersey will provide a slew of benefits. It will streamline operations, empower greater flexibility for capital returns, and allow shareholders to hold stocks directly through CREST without the need for CDIs. Moreover, this change will make the company fully subject to the UK takeover code, eliminating the need for special takeover provisions under Luxembourg law. Additionally, dividends paid post-migration won't incur dividend withholding taxes.
Prior to this decision, B&M established B&M European Value Retail S.A. as its ultimate parent company in Luxembourg back in 2014. At that time, the aim was to simplify the company's structure and potentially attract investment, particularly from US private equity firms. Interestingly, B&M reported paying UK taxes at the full rate, thus not deriving substantial benefits from its Luxembourg domicile.
After announcing the migration, B&M pledged to maintain its London listing and eligibility for inclusion in the FTSE's UK Index.
Boost for Shareholders, or Just a Routine Shift?
The shift comes after B&M, a member of the FTSE 250 index, reported a pre-tax profit of £431 million for the 12 months ending 29 March, 2025, a decline from the £498 million achieved in the previous year. Figures disclosed earlier this month showed the chain's net debt increased by almost six per cent to £781 million during the same period, while the average number of employees dropped from 41,115 to 40,641. However, B&M's group revenue did rise from £5.3 billion to £5.5 billion.
Following the financial results, shares in B&M dropped from 330p to a low of 255p but have since recovered slightly. Addressing its financial performance earlier this month, B&M expressed confidence in its future growth, highlighting its successful strategy, continued focus on limited-assortment value retailing, and ongoing efforts to increase sales volumes and productivity improvements.
New Leadership Awaits
Just before releasing its annual results, B&M announced the appointment of Tjeerd Jegen, a former Tesco executive, as its new CEO. Jegen, who will earn a base salary of £928,000, takes over from Alex Russo, who joined the company in 2020 and was promoted to the top job in 2022. B&M acknowledged Russo's departure in February this year, with analysts attributing it to a disappointing trading performance. While Russo's remuneration package dropped from £3.1 million to £1.8 million for the latest financial year, his bonus was slashed from £1.6 million to £853,125, and he did not receive a long-term incentive payout, in contrast to the £562,206 he received in the previous year.
So, B&M's journey continues, with new leadership and a fresh home in Jersey. The discount retailer faces challenges ahead, but with a robust business model, clear growth pathways, and targeted strategic initiatives, the company is hopeful about capitalizing on market opportunities and generating long-term value for shareholders.
In light of B&M's shift to Jersey, this move is anticipated to offer benefits such as simplified operations, increased flexibility for capital returns, and the elimination of dividend withholding taxes. The company's new home in Jersey is expected to provide a conducive environment for strategic investments and growth, catering to its business ambitions and enhancing shareholder value.
With its new CEO, Tjeerd Jegen, on board, B&M is set to navigate through the emerging challenges in the retail market while capitalizing on growth opportunities, underpinned by its successful business model, focus on value retailing, and ongoing efforts to boost sales volumes and productivity.
