B&M Finance Chief Steps Down Amid £7m Accounting Error

Published: 20 October 2025. The English Chronicle Desk. The English Chronicle Online.

B&M, one of Britain’s largest discount retailers, has announced the departure of its finance chief following the discovery of a £7 million accounting error, prompting the company to issue its second profit warning within just two weeks. The retailer, known for selling a wide array of products including DIY tools, electrical items, garden supplies, toys, pet food, and everyday essentials, confirmed that Mike Schmidt will step down as chief financial officer while the board searches for a successor.

The accounting error, identified after an update to the company’s operating system earlier this year, involved £7 million of overseas freight costs that had not been correctly recognised in the cost of goods sold. This adjustment has led to a downward revision of B&M’s annual earnings forecast. The company now expects adjusted profits for the year ending March 2026 to range between £470 million and £520 million, a significant drop from its previous guidance of £510 million to £560 million. For the first half of the year, profits are projected at £191 million, down from an earlier estimate of £198 million.

The revelation of the accounting mistake sent shockwaves through financial markets, with shares in the FTSE 250-listed retailer plunging nearly 18% during early trading. Over the course of the year, B&M’s share price has fallen by almost 50%, reflecting ongoing investor concerns about the company’s performance and profitability amid challenging market conditions.

Despite the departure of its finance chief, B&M has reassured investors that Schmidt will remain with the company until a replacement is appointed. The system issue responsible for the error has already been corrected, and the company has stated that it will commission an external review to examine the root cause and ensure such mistakes do not recur. An update is expected when B&M publishes its first-half results on 13 November.

The profit warning comes as the retailer continues to face a challenging trading environment. Earlier in October, B&M issued a separate profit warning and unveiled a “back to basics” strategy under its new chief executive, Tjeerd Jegen, who took charge in June. As part of this plan, the company is working to simplify its operations, cut prices, improve on-shelf availability, and rejuvenate customer interest across its stores.

Despite these efforts, B&M has indicated that sales at stores open for at least a year are expected to either decline or achieve only low single-digit growth in the current financial year. The company has attributed this to broader economic pressures and cautious consumer spending, particularly among lower-income households, which make up a significant portion of its customer base.

The company’s struggles are not new. In February, B&M issued a profit warning, and in June, it cited slowing sales due to more careful consumer spending habits as a primary reason for underperformance. Analysts have noted that while B&M thrived during the pandemic, when it capitalised on heightened demand for essential goods and value-for-money products, the post-pandemic economic environment has presented a more complex landscape. Rising inflation, increased energy costs, and changes in consumer behaviour have all contributed to a more challenging retail environment for discount stores like B&M.

The board has formally wished Schmidt well in his future endeavours. In a brief statement on Monday, B&M said, “The board wishes Mike well for the future.” Schmidt’s departure comes at a critical juncture for the retailer, which is seeking to stabilise its financial performance while implementing strategic changes under its new CEO.

B&M’s journey to becoming one of the UK’s leading discount retailers has been notable. Founded in 1978, the company grew steadily before being acquired in 2004 by Simon and Bobby Arora, who transformed it from an ailing regional chain of 21 stores into a retail powerhouse. The Arora brothers successfully expanded B&M across the UK and France, ultimately taking the company public with a listing on the London Stock Exchange in 2014. Over the years, B&M has built a reputation for offering low-priced household essentials, seasonal items, and grocery products, appealing to a wide range of customers seeking value for money.

Today, B&M operates a total of 1,270 stores, with the vast majority located in the UK under the B&M, Heron Foods, and B&M Express brands. This figure also includes 140 stores in France, highlighting the company’s ongoing international presence. Despite the current challenges, B&M remains a major player in the retail sector, employing thousands and serving millions of customers across multiple markets.

CEO Tjeerd Jegen has emphasised that the company’s “back to basics” plan is designed to address both operational inefficiencies and evolving customer expectations. Since assuming leadership, Jegen has focused on improving store layouts, ensuring that shelves are stocked consistently, and introducing promotions to drive footfall. By cutting prices selectively and refining product ranges, B&M hopes to regain momentum and rebuild consumer confidence, particularly among the core demographic that relies on the retailer for affordable everyday goods.

While the £7 million accounting error is a setback, B&M’s management insists that it does not reflect broader systemic issues. The board has committed to reviewing internal financial controls, strengthening oversight mechanisms, and ensuring that accounting processes are robust going forward. Analysts have noted that while the error has affected short-term profit forecasts, the company’s underlying business model remains largely intact, with a strong market presence and a loyal customer base.

Financial analysts have pointed to the discount retail sector as being particularly sensitive to changes in consumer spending and economic conditions. With inflationary pressures and fluctuating disposable incomes, retailers like B&M face the dual challenge of maintaining profitability while offering competitive prices. The company’s recent profit warnings highlight the difficulties inherent in balancing cost control, supply chain management, and customer satisfaction.

Investors and market observers will closely monitor B&M’s upcoming half-year results in November, which are expected to provide a clearer picture of the company’s financial health and the effectiveness of the newly implemented strategies. Additionally, the external review of the accounting error will offer reassurance that robust measures are being put in place to prevent similar issues in the future.

As B&M navigates these challenges, the company remains focused on retaining its market share and ensuring long-term sustainability. The combination of leadership changes, operational reforms, and financial oversight measures is intended to stabilise performance and provide a foundation for future growth, both in the UK and in France. The retailer’s ability to adapt to changing market dynamics and maintain customer loyalty will be crucial to its success in the coming months and years.