One firm's demise is another's lucrative opening

The private equity owned group, which sells products including laptops, televisions and sofas to customers who pay for them installments, said it is picking up business from struggling Batley-based Cattles, which has stopped lending.

Brighthouse, which has ambitious expansion plans across Yorkshire, also reported like-for-like Christmas sales growth of nine per cent in the 13 weeks to December 24. However, that was down on the 13.5 per cent like-for-like growth achieved during the same period in 2008.

It has opened 13 new stores since April and said it is on course to open up to 22 by the end of March.

The group said its performance was creditable given the tough retail climate.

"Both customer footfall and trading in the run up to Christmas has been strong and we have delivered improved revenue and customer numbers," said chief executive Leo McKee. "Consumer electricals have been popular and we have also seen significant demand for furniture and domestic appliances."

Including new store openings, revenue over the period was up 21 per cent at 50.5m, compared to 41.7m a year ago.

"While our new stores are making a healthy contribution, we are particularly pleased with our nine per cent like-for-like revenue growth," said Mr McKee. "Current overall performance is in line with management expectations. Looking forward to 2010, the company is well placed for further growth, and our new store opening programme remains on track."

BrightHouse believes there is a market of 5.2m households who struggle to access credit and for whom the rent-to-buy option is increasingly attractive. So far it has tapped just three to four per cent of that market.

"We are in a situation where the banks have massively tightened up on lending criteria both for individuals and businesses," said Mr McKee.

"London Scottish has disappeared and Cattles' difficulties are well publicised. In terms of big players in the market there's Provident Financial. The fact of the matter is that for this consumer group of 5.2m households the options are quite limited."

Cattles is winding down its loan book after uncovering a mountain of bad debts. It has stopped lending, leading debt charities to warn of a crisis for families who rely on credit.

BrightHouse hopes to fill some of that gap. It now has 190 stores across the UK, but believes it has tapped a mere fraction of the market. In Yorkshire the group has 17 stores, and has plans to double this over the next three to five years by targeting market towns and city suburbs.

It has pinpointed Pontefract, Selby, York, Morley, Goole, Rothwell, Skipton, Mexborough, Conisbrough and Brighouse among others.

"We will continue to open more stores in Yorkshire," said Mr McKee. "The feature of Yorkshire is the demographic and road network. We work most effectively when stores are in reasonable proximity to each other.

"Yorkshire, with its tight conurbations, offers lots of scope for us."

It recently opened a store in Leeds' Merrion Centre, which is performing "extremely well", and Mr McKee added there is capacity for a couple more stores in the city.

Mr McKee said the group's levels of bad debts have stayed "roughly steady", with many customers relatively immune to the recession as they rely on benefits.

"The thing about my customer base is that a lot of them do not have mortgages," he said.