Tile takeover could lead to worse deals, says competition watchdog

Topps Tiles’ deal to acquire stores from collapsed rival CTD has raised competition concerns in four areas, according to the Competition and Markets Authority (CMA).

Britain’s largest tiling retailer Topps Tiles’ swooped for 30 stores from its competitor CTD Tiles in August for £9m, after it fell into administration. It announced in a trading update in October that the deal was under investigation by the competition watchdog.

Before appointing administrators from Interpath, Birmingham-headquartered CTD Tiles was the UK’s second largest tile supplier before it collapsed, trading from 87 stores and employing around 580 staff.

Now the Competition and Markets Authority (CMA) has found that the deal raises competition concerns in the supply of tiles to retail customers and business customers in Dorking, Edinburgh, Inverness and Aberdeen.

The investigation found both companies compete closely for retail and business customers. After reviewing the deal, including internal documents and evidence from customers and competitors, the CMA concluded that in most areas there are sufficient remaining competitors but that in a small number of areas, the deal could lead to worse deals and service for customers.

Last year was the first year of trading for CTD as a standalone business, following Aurelius’ carve-out and purchase of CTD’s trade and assets from Saint-Gobain in 2022. It reported revenues of more than £112m and profits of £580k.

53 CTD stores have been saved since the firm entered administration with Stiled, which owns the Tile Giant and Tile Choice brands reaching an agreement to take on 16 former CTD Tiles stores, as well as the seventh-largest tile manufacturer in the world Kajaria Ceramics taking on seven stores as part of a UK joint venture for the New Delhi-headquartered firm.

Joel Bamford, executive director for Mergers at the CMA said: “Having looked at the evidence, we’re concerned Topps Tiles’ purchase of CTD Tiles may reduce competition in Dorking, Edinburgh, Inverness and Aberdeen.

“This loss of competition could lead to worse deals and service in those areas. Whether you’re retiling your own home or a business that provides renovation services, the merger could make such projects more expensive.

“Topps Tiles now has the opportunity to offer solutions to our concerns, otherwise this case will proceed to a more in-depth investigation.”