Gail’s Bakery to open 35 new locations amid £500m sale talks

Gail’s Bakery is planning to open 35 new locations across England during its current financial year as it considers a £500m sale.

The London-headquartered business opened 21 in its latest 12 months – a period which also saw its revenue surge from £181.7m to £231.7m.

Newly-filed accounts with Companies House for the year to 29 February, 2024, also show that Gail’s Bakery cut its pre-tax loss from £12.8m to £7.4m.

Wholesale revenue rose from £70.2m to £83.7m while retail sales jumped from £135.3m to £179m.

Gail’s Bakery’s EBITDA [earnings before interest, taxes, depreciation and amortisation] rose from £29.8m to £43m and from £31.8m to £44.7m on an adjusted basis.

Gail’s Bakery directors are chairman Luke Johnson, chief executive Tom Molnar and restaurant investor Henry McGovern.

It was first reported in March 2024 that Bread Holdings, which includes the chain, was being prepared for a sale which could value it at £200m.

However, since then the possible valuation of the business has risen to £500m.

New openings drive growth at Gail’s Bakery

A statement signed off by the board said: “Over the year, trading was strong – with the group opening 21 new retail bakeries and continuing to see healthy growth in our established locations.

“In addition, the wholesale part of the business continued to grow its large food service business – from its bakeries in London, Manchester and Bath; and due to the continued success of the brands produced and sold through several large UK supermarket businesses.

“The group continues to invest in new retail openings (21 in FY24 and 35 planned in FY25) and will continue to expand in wider geographic areas within the UK.

“In addition to the retail space, investments in production capabilities were made in the year with more production lines continuing to move into the new central bakery in Milton Keynes.

“Top line growth in both businesses remains the primary engine of the group’s profit and EBITDA performance and this growth was strong in the year – led by the opening new space and the continued appeal of our offer.

“Additionally profit growth was aided in the year by some improvements to our operating margin drive by the growing share of our business coming from the more profitable retail arm.

“Gross profit margin fell because of increases in staff costs and utilities.”