Somerfield, formerly known as Gateway, was a chain of small to medium sized supermarkets operating in the United Kingdom, and also previously owned the now defunct Kwik Save chain of discount food stores. The company was taken over by the Co-operative Group on 2 March 2009 in a £1.57 billion deal,^[2] creating the UK's fifth largest food retailer. The name was phased out and replaced by the Co-operative Food brand in a rolling programme of store conversions ending in spring 2011.^[3][4][5]

Gateway History[link]

The early years[link]

The Company has its origins in a Bristol-based grocer known as J H Mills which was founded in 1875 and which developed a self service supermarket chain named Gateway Foodmarkets in 1950.^[6] Gateway Foodmarkets was taken over by the Linfood Holdings, which already owned the Frank Dee wholesaler business and a chain of 70 supermarkets, in 1977.^[6] In 1983 Linfood Holdings was renamed the Dee Corporation.^[6]

Acquisitions[link]

Alec Monk, Chief Executive at the Dee Corporation, having escaped a takeover bid from Argyll Foods in 1981,^[7] decided to create his own supermarket empire. Two of the biggest acquisitions were of International Stores,^[6] bought from British American Tobacco in 1984, and Fine Fare,^[6] bought from Associated British Foods in the following year. By this time the Dee Corporation had over 1,100 stores, and it had nearly 12% of the market, not far behind Sainsbury's and Tesco.^[8] Most of the Dee Corporation’s outlets were small, high-street stores. Monk argued that there was a future for well-run conventional supermarkets as well as the large out-of-town stores.

However, by 1987 the Dee Corporation ran into problems, mainly because of the difficulty of integrating so many disparate businesses. Some disposals were made in that year, including the Linfood wholesaling operation. In 1988, the Dee Corporation changed its name to the Gateway Corporation,^[9] and a new retailing chief was recruited from the US. Investors remained sceptical, and in 1989 the Company was the subject of a £2bn takeover bid from a newly formed company, Isosceles; the deal was partly financed by a pre arranged sale of ninety Gateway stores to Asda.^[8]

Gateway also took over some of the former Carrefour hypermarkets when the French retailer exited Britain in the late 1980s, notably the store at the Merry Hill Shopping Centre in the West Midlands in 1988 - although this lasted just two years before the store was sold on to Asda.

Isosceles era[link]

When Isosceles, a newly created financial group led by David Smith and backed by several big investing institutions, bid successfully for Gateway in 1989 and took the company private, the plan was to restructure the business and refocus it on what were called “middle ground” outlets, falling between the larger out of town superstores and smaller, inner city neighbourhood shops; the average size of the stores was between 5,000 sq ft (460 m²) and 10,000 sq ft (930 m²). The promoters of the Isosceles bid believed that, after this disposal and extensive restructuring of the rest of the portfolio, Gateway could become a viable competitor; the intention was to re-float the company on the stock market within three to five years. However, the bid was highly leveraged, and it was not clear that the new company would be able to fund the necessary modernisation of the business.^[10]

Some of the planned disposals of non-core businesses took longer than expected to complete. Financial strains led to the enforced departure of David Smith and other executives in 1991.^[10]

Somerfield history[link]

A Somerfield (former Safeway) in Oakwood, Leeds

In the following year, a new chief executive, Bob Willett, was appointed and a decision was taken to rebrand the company's operations as Somerfield after a successful pilot scheme in 1990 with a new store and the first Somerfield store in the country being built in Burnham on Sea, Somerset, and the company then built its success upon the new brand alongside the existing Gateway and Food Giant chains.^[6] A small number of stores were also relaunched under a new Food Giant discount brand, with the first store opening in Nottingham in 1991.^[6]

Two years later, yet another chief executive, David Simons, was in command. In May 1994 the Company changed its name to Somerfield plc.^[6]

According to The Guardian, the holding company almost collapsed in the 1990s under a “mountain of debt”.^[11] In 1996, Somerfield plc was floated on the stock market in an initial public offering, after the recovery had reached the point where flotation became feasible with a market value of around £600m, and the proceeds were used to repay banks that had lent to Isosceles.^[11] At the time of the flotation the company’s market share had fallen to 5.3%, its lowest level for two years, but Simons claimed that the company was now clearly positioned in the market, and that the business would benefit from what he saw as the trend back towards high-street shopping. The aim was to become the UK’s strongest neighbourhood food retailer.^[10]

Questions remained about whether, at a time of intense competition both from discounters and from the bigger chains, Somerfield could generate adequate growth in sales and profits.^[10]

Kwik Save purchase[link]

In 1998 the company took over the rival Kwik Save in a £473 million transaction: although the deal was billed as a merger, Somerfield investors owned 62.5% of the enlarged group.^[12]

Observers questioned whether putting together two very different businesses would solve either’s problems. The initial plan was to convert most of the Kwik Save stores to the Somerfield name, but the group continued to suffer from a disparate store portfolio, the result of numerous ill digested acquisitions.^{[13][dead link]} At the end of 1999 Simons, facing strong criticism from the City, announced plans to sell a third of the company’s 1,400 stores. He admitted that the group had underestimated the difference between Somerfield and Kwik Save, and had failed to support and maintain the Kwik-Save brand.^[13]

Kwik Save had over-expanded with a badly focused portfolio of stores, many in poorer areas, and the company was in a worse state than Somerfield's management had realised.

The original plan was to transfer all Kwik Save stores to the Somerfield fascia, but it quickly became clear that many outlets were not suitable for conversion, either due to size or location. Also, the downmarket wooden shelving and poor quality fittings used by Kwik Save meant that every conversion required a full refurbishment of the store - simply changing the signage and uniforms would have risked dragging the carefully developed Somerfield brand downmarket. Instead, the larger Kwik Save stores were converted, some were sold or closed and the chain became a trading division of Somerfield Stores Ltd, sharing its supply chain and back office systems with Somerfield. For some years, the own brand products in Kwik Save stores were Somerfield, although this policy was reversed once it was decided to keep the brand.

It was clear that more than a hundred Somerfield and Kwik-Save stores were within a mile of each of each other and directly competing: also customers were switching from high street to out of town shopping.^[14]

John von Spreckelsen[link]

A few months later Simons resigned, and John von Spreckelsen, formerly chief executive of Budgens, the convenience food retailer, was brought in as chairman.^[13] The new strategy was to keep Somerfield and Kwik Save as separate businesses, while sharing common services in such areas as information technology and corporate finance. By mid-2002 – half way through what was seen as a five year recovery programme – the company announced a return to the black, and dividends were resumed after a two year break, although the positioning issues remained unsolved.^[13]

Somerfield was the product of opportunistic acquisitions, driven more by financial engineering than by any conception of where the company should be positioned. The focus on medium sized High Street supermarkets was largely a matter of making the best of a very difficult job; the main problem, which had not been solved by the end of the 1980s, was to make some sense of the heterogeneous collection of stores which it had acquired through its numerous takeovers^{[citation needed]}.

New formats[link]

A Somerfield in East Cowes on the Isle of Wight.

Somerfield changed its logo from a rectangular shape to a more contemporary design and opened a number of store formats, including Somerfield Essentials and Somerfield Market Fresh. It further changed its brand image by introducing newer own-brand lines including the premium 'So Good' range, the low fat 'Good Intentions', and a new advertising strapline: "Giving you what you want". A low-price own brand label called 'Makes Sense' was introduced to compete with rival low cost brands, such as Tesco Value.^[15]

Safeway Compact[link]

In October 2004, Somerfield acquired 114 Safeway Compact stores from Morrisons, which were subsequently re branded under the Somerfield name.^[16] This deal was referred to the Competition Commission. After completing its investigation, the Commission instructed Somerfield to sell twelve stores.^[17] In September 2005, Somerfield announced its intention to appeal against the decision, a process delayed by a takeover bid for the chain. The Competition Appeal Tribunal upheld the Commission's decision in February 2006.^[17] Somerfield therefore had to proceed with sale of the twelve stores. However, the sale of Kwik Save in February 2006 is likely to have removed the potential clashes between some of the offending stores.

Acquired by private equity[link]

Retail entrepreneurs John Lovering and Bob Mackenzie made two failed bids to take over the Company in 2003.^[18] Then in 2005, Icelandic venture capital group Baugur made an approach,^[18] while United Co-operatives and London & Regional Properties also expressed an interest, but both groups dropped out of the running.

Then on 21 December 2005 Somerfield plc was acquired by a consortium consisting of Apax Partners, Barclays Capital and the Tchenguiz Family Trust, at which time the name of the group changed to Somerfield Ltd.^[19]

The aim of the new owners was to simplify the business and attract new customers. The first move was the end of the SaverCard loyalty scheme in May 2006 with promotional deals becoming available to all customers. A new point of sale was introduced to make promotions and price cuts more visible to customers. Somerfield's three own-label brands have also been overhauled; the budget 'Makes Sense' range has become 'Simply Value', the low calories 'Good Intentions' range has become 'Healthy Choice', and the premium 'So Good' range has become 'Best Ever!'.^[20]

Kwik Save sale[link]

In 2005, Somerfield closed 22 of its 51 Scottish Kwik Save stores and re-branded the remainder under its own name, thus removing the Kwik Save brand from the marketplace north of the border.^[21]

After the group was taken over, it was reported that the new owners found the Kwik Save chain was losing £40m per year, effectively cancelling out around 40% of the profits generated by the Somerfield division. As a result, it sped up the conversion of stores from Kwik Save to Somerfield. On 27 February 2006, Somerfield Stores Ltd sold the Kwik Save brand and 171 stores to BTTF, an investment vehicle headed by Paul Niklas, for an undisclosed sum.^[22] Somerfield re-branded the 102 Kwik Save sites it had retained under its own name and a further 77 stores were sold to other retailers, thought to include Netto and Aldi, leaving the company to focus solely on the Somerfield brand.

Subsequent to the initial sale, a further 19 Kwik Save stores were acquired by BTTF, including some of those included in the Competition Commission investigation ruling into the Safeway Compact takeover.

Store rationalisation[link]

In August 2006 a series of store closures was announced as Somerfield's new owners continued their restructuring activity. Some of these were poorly performing Somerfield stores and some were former Kwik Save sites that had not proved successful after being converted to Somerfield stores in 2006.^[23]

Some stores were sold to other groups, including Sainsbury's, which bought 5 stores, while others were closed completely.^[24]

Having bought 140 Texaco petrol stations in 2007, Somerfield tripled the size of some of their shops, using a similar format to its convenience stores. Signage was replaced with the Somerfield brand.^[25]

In October 2006, it was revealed that 40 Somerfield stores, including many retained Kwik Save branches, had been sold. These stores were mainly under-performing converted Kwik Save stores.^[26]

In November 2006, the company also sold a further 12 stores to Marks & Spencer to trade under the M&S Simply Food brand. This deal included stores in Blackheath in S.E. London, Broughty Ferry in Dundee, and Petersfield and Alton in Hampshire.^[27]

Takeover by the Co-operative Group[link]

On 16 July 2008, it was announced that Somerfield would be acquired by the Co-operative Group for £1.57 billion, subject to approval from the Office of Fair Trading.^[28]

The build-up to this announcement began in late 2007, when the parent private equity consortium, that had acquired Somerfield in December 2005, put the chain up for sale.^[29] News reports valued the chain at over £1.5 billion.^[30] Somerfield appointed Citigroup to manage the sale, and a preference to sell as a going concern rather than on a piecemeal basis was reported.^[29][30] It emerged that four provisional bids were made. Only the Co-operative Group, the UK's largest co-operative, publicly announced purchase talks, aiming to complete due diligence for the entire estate of 900 Somerfield stores in the third quarter, but would be expected to sell a minority of stores.^[29][30][31] On 24 June, a Thomson Reuters newswire reported sources indicating that the Co-operative Group's acquisition of Somerfield could be finalised at the start of July, in a final deal worth £1.7 billion.^[32] Earlier in June, Morrisons confirmed that it was not bidding for Somerfield, but would consider the purchase of any stores that are sold after the acquisition.^[33] Newspaper sources said that other major supermarket chains are also interested in such purchases.^[34] In July 2008, the Co-operative Group announced a deal to purchase Somerfield for £1.57 billion, creating the fifth largest supermarket chain in the UK. It was confirmed on 20 October 2008 that the Office of Fair Trading had approved the sale of Somerfield under the condition that 133 stores must be sold. This process is underway as of June 2009 with many stores changing ownership, for example to Lidl.^[35]

In February 2009, it was announced that The Co-operative Group plan to close the Somerfield head office in Bristol and relocate all operations to their existing head office in Manchester. The Co-operative have said that they will try to relocate as many staff as possible to other areas of the business or to their head office in Manchester, to try to avoid redundancies. The takeover was officially completed on 2 March 2009. The process is underway as of June 2009 of closing/selling the additional stores and re-branding the remaining Somerfield stores.^[36]

Operations[link]

As an independent entity, Somerfield was the sixth largest food retailer in the UK, according to TNS Worldpanel,^[37] following the sale of the Kwik Save unit and the closure or sale of unprofitable stores, with 977 stores (as of January 2007). Also the fifth largest private company in the UK, Somerfield had a 3.8% share of the UK grocery market in 2007, down from 4.5% in 2006.

The five larger retailers (in descending order of size) were Tesco, Asda, Sainsbury's, Morrisons and The Co-operative Group. The top four have specialities in larger superstores, while the Co-op has become the largest community retailer, with specialities in convenience stores and smaller supermarkets. At one point in early 2007, Somerfield was also briefly surpassed in size by Waitrose, and the independent grocers' distributor, Nisa-Today's, is comparable in size.

Criticisms[link]

• Somerfield was alleged to have "given up on ethics" after withdrawing from a voluntary ethical trading agreement.^[38]

References in popular culture[link]

The branch of Somerfield in Wells, Somerset, England had featured prominently in the film Hot Fuzz and Somerfield branding was clearly visible. In the film the manager of the supermarket Simon Skinner, played by Timothy Dalton, is a charming but sinister individual. The role the supermarket plays in the film includes a gun battle scene between police and staff members in full Somerfield uniforms. The reason the store was chosen was due to the director of the film Edgar Wright having formerly worked at the store.^[39]

See also[link]

• List of supermarket chains in the United Kingdom
• http://www.fundinguniverse.com/company-histories/Somerfield-plc-Company-History.html

References[link]

External links[link]

Wikinews has related news: Baugur Group withdraws from Somerfield bid

• Corporate information
• Somerfield Ltd history

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William Harrison "Bill" Withers, Jr. (born July 4, 1938) is an American singer-songwriter and musician who performed and recorded from 1970 until 1985. He recorded a number of hits such as "Lean on Me", "Ain't No Sunshine", "Use Me", "Just the Two of Us", "Lovely Day", and "Grandma's Hands". His life was recently the subject of the documentary film Still Bill.

Early life[link]

Withers was born the youngest of six children in the small coal-mining town of Slab Fork, West Virginia. Raised in nearby Beckley, West Virginia, Withers was twelve years old when his father died. He enlisted with the United States Navy at age eighteen and served for nine years, during which time he became interested in singing and writing songs. Soon after his discharge from the Navy in 1965, he relocated to Los Angeles in 1967 for a musical career.^[1]

Withers worked as an assembler for several different companies, including Douglas Aircraft Corporation, while recording demo tapes with his own money, shopping them around and performing in clubs at night. When he debuted with the song "Ain't No Sunshine" he refused to resign his job because of his belief that the music business was a fickle industry and that he was still a novice compared to other acts.

Career[link]

Sussex Records[link]

During early 1970, Withers' demonstration tape was audited favorably by Clarence Avant of Sussex Records. Avant signed Withers to a record deal and assigned Booker T. Jones to produce Withers' first album. Four three-hour studio sessions were planned to record the album, but funding caused the album to be recorded in three sessions with a six-month break between the second and final sessions. Just as I Am was released in 1971 with the tracks "Ain't No Sunshine" and "Grandma's Hands" as singles. The album features Stephen Stills playing lead guitar.^[2]

The album was a success and Withers began touring with a band assembled from members of The Watts 103rd Street Rhythm Band: drummer James Gadson, guitarist Benorce Blackmon, keyboardist Ray Jackson, and bassist Melvin Dunlap.

At the 14th annual Grammy Awards on Tuesday, March 14, 1972, Withers won a Grammy Award for Best R&B Song for "Ain't No Sunshine." The track had already sold over one million copies, and was awarded a gold disc by the R.I.A.A. in September 1971.^[3]

During a hiatus from touring, Withers recorded his second album, Still Bill. The single "Lean on Me" went to number one the week of July 8, 1972. It was Withers' second gold disc awarded track with confirmed sales in excess of three million.^[3] His single "Use Me" released in August 1972, became his third million seller, with the R.I.A.A. gold disc award taking place on October 12, 1972.^[3] His performance at Carnegie Hall on October 6 1972 was recorded, and released as the live album Bill Withers, Live at Carnegie Hall on November 30 1972. In 1974 Withers recorded the album +'Justments. Due to a legal dispute with the Sussex company, Withers was unable to record for some time thereafter.

During this time, he wrote and produced two songs on the Gladys Knight & the Pips record I Feel a Song, and in October 1974 performed in concert together with James Brown, Etta James, and B. B. King four weeks prior to the historic Rumble in the Jungle fight between Foreman and Ali in Zaire.^[4] Footage of his performance was included in the 1996 documentary film, When We Were Kings, and he is heard on the accompanying soundtrack. Other footage of his performance is included in the 2008 documentary film Soul Power which is based on archival footage of the 1974 Zaire concert.

Columbia Records[link]

Withers signed with Columbia Records in 1975. His first release with the label, Making Music, Making Friends, included the single "She's Lonely" which was featured in the film Looking for Mr. Goodbar. During the next three years he released an album each year with Naked & Warm (1976), Menagerie (1977, containing the successful Lovely Day) and Bout Love (1978) and Get On Down, the latter song was also on Looking for Mr. Goodbar soundtrack.

Due to problems with Columbia, he concentrated on joint projects between 1977 and 1985, including the successful "Just the Two of Us", with jazz saxophonist Grover Washington, Jr., which was released during June 1980. It won a Grammy on February 24, 1982. Withers next did Soul Shadows with The Crusaders, and In the Name of Love with Ralph MacDonald, the latter being nominated for a Grammy for vocal performance.

In 1985 came Watching You, Watching Me, which featured the Top 40 rated Rhythm&Blues single "Oh Yeah". Withers ended his business association with Columbia Records after this release, which as of 2011 is his last studio album.

In 1988, a new version of "Lovely Day" from the 1977 Menagerie album, titled "Lovely Day (Sunshine Mix)" and remixed by Ben Liebrand, reached the Top 10 in the United Kingdom, leading to Withers' performance on the long-running Top of the Pops that year. The original release had scored #7 in the UK in early 1978, and the re-release scored to #4.

In 1987, he received his ninth Grammy award nomination and on March 2, 1988 his third Grammy for Best Rhythm and Blues Song as songwriter for the re-recording of Lean On Me by Club Nouveau on their debut album Life, Love and Pain, released in 1986 on Warner Bros. Records.

In 1996, a portion of his song "Grandma's Hands" was sampled in the song "No Diggity" by BLACKstreet, featuring Dr. Dre. The single went to #1 on the Billboard Hot 100 chart and sold 1.6 million copies and won a Grammy in 1999 for Best R&B Performance by a Duo or Group with Vocals.

Withers contributed two songs to Jimmy Buffett's July 13, 2004 release License To Chill. Following the reissues of Still Bill on January 28, 2003 and Just As I Am on March 8, 2005, there was speculation of previously unreleased material being issued as a new album.^[5] In 2006, Sony gave back to Withers his previously unreleased tapes.

In 2007, "Lean On Me" was inducted into the Grammy Hall of Fame.

Personal life[link]

Withers married actress Denise Nicholas in 1973, during her stint as the main actress of the popular sitcom, Room 222. The couple divorced the next year.^[6]

During the professional semi-hiatus which began in the late 1970s, Withers concentrated more on personal matters than professional recording. In 1976, he married Marcia Johnson and they had two children, Todd and Kori. Marcia eventually assumed the direct management of his Beverly Hills-based publishing companies, in which his children also became involved as they became adults.^[7]

Discography[link]

Studio albums[link]

Live albums[link]

Compilation albums[link]

Singles[link]

• ^A The original version of "Ain't No Sunshine" did not chart on the UK Singles Chart until 2009, 38 years after its release.

Awards[link]

Honors[link]

• 2002: Honorary doctorate from Mountain State University
• 2005: Songwriters Hall of Fame inductee
• 2006: ASCAP Rhythm & Soul Heritage award^[14]
• 2007: Inducted into West Virginia Music Hall of Fame^[15]

References[link]

External links[link]

Biography portal

• Official website
• Bill Withers at Allmusic
• Bill Withers at the Internet Movie Database
• Biography at Soultracks.com
• Bill Withers Biography with photos
• Still Bill documentary
• Extensive 2009 audio interview with Withers on public radio program The Sound of Young America