West Coast Capital / Birthdays Group Ltd
OFT closed case: Completed acquisition by West Coast Capital, through TBH Trading Ltd, of Birthdays Group Limited.
Affected market: Supply of greeting cards and associated merchandise
No. ME/1404/03
The OFT's decision on reference under section 22 given on 24 October 2003
PARTIES
West Coast Capital is a partnership which provides venture capital for acquisitions, largely in the retail area. Interests include: a 91.5 per cent share in Office Holdings Limited, the operators of the 'Office' range of shoe shops; a 75 per cent share in AJT Footwear Limited; and a 25 per cent interest in the Gadget Shop. TBH Trading Ltd is 100 per cent owned by West Coast Capital. Birthdays Group Limited (Birthdays) operates a network of 550 high street shops throughout the UK selling greeting cards, gifts and stationery. 50 Birthdays shops sell Gadget shop merchandise through an informal concession agreement. Birthdays UK turnover is £142 million.
TRANSACTION
TBH Trading Limited (TBH), acting through its wholly owned subsidiaries TBH Gifts Limited, TBH Gifts 2003 Limited, and TBH Gifts 2004 Ltd, has acquired Birthdays.
Details of the acquisition were received on 30 September 2003. The 40-day administrative deadline is 25 November. The acquisition was completed on 29 August and the statutory deadline is 28 December.
JURISDICTION
As a result of this transaction TBH and Birthdays have ceased to be distinct. The UK turnover of Birthdays exceeds £70 million, so that the turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act) is satisfied. A relevant merger situation has been created.
RELEVANT MARKET
The overlap between the parties is limited to gifts sold in Birthdays shops and Gadget Shop outlets. There is no need to determine what range of goods act as a constraint given that no competition issues arise under the area of direct overlap between the two retail chains.
HORIZONTAL ISSUES
The parties overlap in the retail sale of novelty gifts/gadgets. TBH considers the type of goods sold by the Gadget Shop is complementary to the type of gifts sold in Birthday shops; this appears to be supported by the pre-merger concession arrangement between the two groups. TBH has provided lists of products sold in these shops and it appears that the only direct overlap is stuffed toys, novelty key rings and party items. These goods are sold in a variety of other retail outlets and a number of existing retailers could expand into the retail sale of these items.
THIRD PARTY VIEWS
No third parties contacted the Office concerning this acquisition.
ASSESSMENT
The parties' only overlap is in the sale of a limited range of gift and party items. The OFT does not believe that the creation of the relevant merger situation has resulted in a substantial lessening of competition within a market or markets in the United Kingdom for goods or services.
DECISION
This merger will therefore not be referred to the Competition Commission under section 22(1) of the Act.