B&M EUROPEAN VALUE RETAIL (BME) 508.6p

Loss to date: 10.3%

Original entry point: Buy at 567p, 17 February 2022

Our bullish call on discounter B&M European Value Retail (BME) is now in the red, the shares caught up in the negative market sentiment towards the retail sector and the news (22 Apr) long-serving boss Simon Arora plans to retire in 12 months’ time from his role as CEO.

Arora is credited with turning the variety goods retailer into one of UK retail’s biggest modern success stories, so his impending exit creates uncertainty.

Over the coming year, Arora will ‘remain fully committed to the business’ in his role as CEO and assist in a smooth transition to his successor, with B&M to consider both internal and external candidates for the top job. Reassuringly, his brother Bobby Arora, group trading director, intends to remain with the business.

Shares is sticking with B&M in our belief its value for money proposition leaves it well positioned for inflationary times. As household bills rise, the groceries-to-general merchandise seller should benefit from cash-strapped consumers trading down. B&M is cheaper than the major grocers on everyday branded items, which should enable it to increase its currently modest share in a £300 billion total addressable UK market.

SHARES SAYS: We are maintaining the faith.