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North West eyes $5M profit annually in BVI

riteway

The North West Company has announced that it would have spent just under $40 million to control majority shares in Roadtown Wholesale Trading (RTT) located in the British Virgin Islands (BVI).

RTT is a privately-held company with seven retail outlets, one Cash and Carry, and one wholesale operation serving the BVI. It operates as RiteWay,

North West, which is a Canada-based firm with branches in various countries, hopes to rake in $5 million in profits annually from its venture in the BVI.

It explained: “Subject to the satisfaction of customary closing conditions, North West will pay approximately US$32 million for its 76% ownership interest in RTT, plus approximately US$5 million in acquisition-related costs, which include stamp duties to the government of the British Virgin Islands.”

“The acquisition, which is expected to close in early February 2017, is expected to contribute approximately US$5 million of annualized net income to North West. North West will pay approximately 90% of the purchase price [for RTT] in cash, financed through its existing credit facilities, and approximately 10% through the issuance of North West common shares, in accordance with the form of consideration elected to be received by RTT shareholders,” North West further said.

“The approvals required to operate RTT under North West majority ownership have also been obtained from the government of the British Virgin Islands, and the Board of Directors of both North West and RTT have unanimously approved the transaction.”

Peter Haycraft, founder and one-time majority owner of RTT, thinks North West is committed to the BVI.

“When we decided to sell this interest in our life’s work, we wanted to make sure that we partnered with a company that was committed to our customers, to our employees, and to the BVI.”

“North West is uniquely qualified in all of these respects and will bring enhancements to our business beyond what we could achieve on our own, especially within today’s changing retail environment,” added Haycraft.

North West, in the meantime, stated that the ‘landmark agreement’ brings together two long-standing retail companies to deliver more selection, services and value to ‘help Virgin Islanders live well’.

The company’s President and Chief Executive Officer, Edward Kennedy, said the local company will continue to operate under the trade names RiteWay Food Markets and Roadtown Wholesale Trading.

He added, “We are very pleased to join with Riteway Food Markets and Roadtown Wholesale Trading Limited and to become part of the BVI. Through this long process of working with RTT’s owners, government and other BVI stakeholders, we have gained an even greater appreciation of our opportunity to be a valued partner.”

Kennedy further stated that North West will prove it is a valued partner through:

• Offering a broader range of retail and wholesale products at better prices to attract more of the provisioning and other retail spending that occurs outside of the BVI

• Continuing to operate RTT under the trade names, RiteWay Food Markets and Roadtown Wholesale Trading

• Ensuring that BVI shareholders are well represented on RTT’s Board of Directors

• Recognizing the strength of BVI’s workforce by making RTT an administration center for North West

• Enhancing community support wherever possible and in consultation with all stakeholders

North West is a widely held publicly traded retailer that specializes in serving smaller countries and regions. Its retail presence in the Caribbean includes Cost-U-Less stores in Cayman Islands, Barbados, Curaçao, St Maarten, as well as St Thomas and St Croix in the US Virgin Islands.

Copyright 2017 BVI News, Media Expressions Limited. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.

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16 Comments

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  1. GMO says:

    Poorly-rated. Like or Dislike: Thumb up 5 Thumb down 13

    Hidden due to low comment rating. Click here to see.

  2. 100 says:

    Well-loved. Like or Dislike: Thumb up 27 Thumb down 1

    Don’t tell me how much profit YOU intend to make, tell me that we will see lower prices.

    • Scary Mary says:

      Well-loved. Like or Dislike: Thumb up 17 Thumb down 3

      @ 100. If you read the article in full, Mr. Kennedy clearly stated that one of their objectives was:

      “Offering a broader range of retail and wholesale products AT BETTER PRICES to attract more of the provisioning and other retail spending that occurs outside of the BVI”.

      If a retailer can’t make a profit off a 40 million dollar investment, why on Earth would they bother to invest in the first place?

      You act as though it’s a SIN for a retailer to actually make money while doing business!

      Why do some people always attack anything “outsiders” try to do? An outsider built this company, and although I haven’t always been pleased with their pricing or the often dubious freshness of products, at least they brought us out of the dark ages when it comes to food supplies in the BVI.

      If you are old enough to remember the market days, you too would be very pleased to see how the Haycraft’s helped build us up!

      I am in full support of North West coming here and showing other retailers how it SHOULD and CAN be done!

      Perhaps by providing a good business model, this will prove to be a shot in the arm for all retailers in the BVI and will help keep our money circulating here in the BVI instead of going to St. Thomas.

      If others would get it through their heads that VOLUME, PRICE POINT, CLEANLINESS and CUSTOMER SERVICE are the keys to success in retail, then their businesses would flourish too!

      Clarance Thomas Ltd. is just about the ONLY retailer I truly admire in the entire BVI today.

      They have the stock (most of the time) and if they don’t have it, they tell you when they will.

      Michael’s staff are always helpful, knowledgeable and customer service oriented. Their prices still need some work, but they are getting better than in days gone by.

      I wish North West well and hope all BVIslanders will come to see exactly how blessed we are to have them here. I can’t wait for them to take over.

      • 100 says:

        Hot debate. What do you think? Thumb up 4 Thumb down 4

        @Scary mary, u act as though other companies haven’t said the same thing only to pulled a fast one by changing the price to be a few cents different.

        The phone company wars for example

        • Scary Mary says:

          Well-loved. Like or Dislike: Thumb up 5 Thumb down 1

          So I guess waiting for them to open their doors BEFORE you begin tearing them down, is asking too much?

          Wow! How sad it must be to have such a jaded outlook on the world. I am betting they will surprise you.

      • ddb says:

        Like or Dislike: Thumb up 3 Thumb down 1

        Where did the original comment become an attack on “outsiders”?

        Are you assuming the poster is a BV Islander and not an expatiate?

  3. Political Observer (PO) says:

    Well-loved. Like or Dislike: Thumb up 10 Thumb down 3

    Northwest invested approximately $40M to purchase a majority share in Riteway and will earn or projected to earn $5M or 12.5% annually, if my math is correct.

    In a small economy with a small customer base, not bad. At this rate, investment will be recouped in approx 8 years.

    The question is what is the hurdle rate, i.e., what is the company’s return on investment(ROI), for the company? Many companies require a 20% minimum ROI.

    Supposely, North West also owns Cost-U-Less in St. Thomas so will Riteway take on Cost-U-Less? Will there be tribal warefare between VI and USVI businesses?

    What will St. Thomas merchants do? Will the tribal price wars be good for Vi consumers?

    Should we pull the lazy boy, pop some popcorn, grab a greenies or a malt or some maubie or a bottle of water and watch enjoy the show?

    • Albion says:

      Well-loved. Like or Dislike: Thumb up 6 Thumb down 0

      I can honestly say I don’t care how much profit they make.

      If they bring in fresher food, better selection and lower prices, then they will have earned every penny of their profits as far as I am concerned.

  4. rastarite says:

    Well-loved. Like or Dislike: Thumb up 10 Thumb down 4

    Congratulations to Mr Peter Haycraft. Indeed a lifetime’s work. The family has done so much for the BVI. We applaud you.

    • hmm says:

      Poorly-rated. Like or Dislike: Thumb up 4 Thumb down 8

      Hidden due to low comment rating. Click here to see.

      • so what says:

        Like or Dislike: Thumb up 2 Thumb down 2

        So what if they are not nice. What did Branson ever done for BVI?

      • Tolian to the Bones says:

        Hot debate. What do you think? Thumb up 6 Thumb down 4

        Nice or not is not the point. They were here. They provided a service. Now they have sold out and me and mine gone back to Bobby’s.

        At the end of the day Elton is a son of the soil. Through good days or bad, he hanging in with us.

        He deserve $5 million profit. Let’s give it to him.

  5. well says:

    Poorly-rated. Like or Dislike: Thumb up 1 Thumb down 5

    Hidden due to low comment rating. Click here to see.

  6. wow says:

    Like or Dislike: Thumb up 2 Thumb down 2

    5 millions profit? Them plan to kill we?

  7. duck1951 says:

    Poorly-rated. Like or Dislike: Thumb up 1 Thumb down 6

    Hidden due to low comment rating. Click here to see.

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