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Published 25 March 2013 11:54, Updated 17 April 2013 12:08
Lee Fleming says he is selling his successful Eliza Park stud because he wants son Reis to be able to start small and not have to deal with a “behemoth”. Photo: Jessica Shapiro
Thoroughbred stud owner Lee Fleming is selling his successful Eliza Park business, with operations in Victoria and Queensland, to make it easier for his 24-year-old son to get going in the business.
The decision to sell Eliza Park, with a roster of stallions that includes Bel Esprit, the sire of champion Black Caviar, comes at the end of a five-year exit plan and will help his son Reis, who currently works for the operation, get a sustainable start in the business, Fleming says.
The Australian Financial Reviewreported that Eliza Park could sell for up to $20 million.
Rather than marking an exit from the horse business for Fleming, the son of retail entrepreneur and former Sydney Turf Club chairman Jim Fleming, the sale is a way to ensure the continued involvement of the next generation. Lee Fleming’s brother still Dean owns their late father’s Tyreel Studs operation.
“For him to stay in the business I don’t want him [Reis] to be handed a behemoth or big place like I’ve built this into,” Fleming told BRW on Monday. “He needs to start off in something smaller and with people around him that are experienced and learn his way through the management and owning a business. You can only do that with something small to begin with. I’d like to help him through that. That’s been one of my driving forces in all this decision.”
Fleming, who says he is keen to look at board roles “around the racing country”, says he hopes to fetch about $20 million from the sale of Eliza Park, which is open for expressions of interest until 26 April. He expects a sale will be agreed on by the start of May.
He intends to put the money back into property, a business in which his younger brothers Dean and Paul remain active.
“Our family has always been in property and racehorses, as the landlords of supermarkets,” he said. “That’s what we know and what we know pretty well. I was in property. As this business grew and demanded more money, I sold a lot of property interests. I would probably get back into property.”
The Fleming family last featured in BRW’s list of rich families with a combined wealth of $330 million in 2010. Jim Fleming made his fortune founding Fleming’s Food Stores grocery chain, which he sold to Woolworths in 1960. He replicated his business model, founding Jewel supermarkets in 1971, which he sold 24 years later to Davids Holdings. Stepdaughter Angela Young founded fast food chain Mad Mex – a BRW Fast Starters company – with her husband, Clovis Young.
The sale comes at time of mixed conditions for the breeding industry.
“The sales have been solid and that’s held up over the last three to four years very well in the face of a lot of adversity,” Lee’s brother and former Sydney Turf Club board member Dean Fleming told BRW. “The industry is going quite well under the circumstances. It’s holding its own and has gradually been improving.”
Retail billionaire Gerry Harvey, who also owns the Magic Millions racehorse auctions, last week said conditions were mixed in the nag trade. Turnover at the 2013 Queensland Thoroughbred Incentive Scheme yearling sale earlier this month was down, after an “OK” result at sales in Perth and Adelaide, Harvey said.
The clearance rate at the Gold Coast event dropped from 77 per cent to 71 per cent and the average price of $21,193 was down 4.3 per cent from $22,142 a year earlier.
“[Turnover fell] from about $7 million to $6.2 million, which was a sizeable drop,” Harvey told BRW last week. “That didn’t reflect what it had been in the previous sales. We’ve got the Inglis (2013 Australian Easter Yearling Sale) in another two to three weeks. That’ll give us another guide.”
Lee Fleming, at least, says his operation is in peak condition.
“My old man always told me if you’re going to sell you get out at the top,” Lee Fleming said. “Eliza Park is at the top. I think it’ll be hard but I’ll then move onto something smaller and who knows?”