Showing posts from category: Commerce & Business

Sainsbury’s, Caution and Quality in Business: A Sure but Steady Passage from Solitary Dairy Grocer’s Shop to a Major Supermarket Chain

Posted by E Curb Nottus on December 8, 2018

Tags: ASDA, Bank of Scotland, Baron Sainsbury of Preston Candover, David (Lord) Sainsbury, Homebase, John Benjamin Sainsbury, John James Sainsbury, Mary Ann Sainsbury, Qatar Investment Authority, Sainsbury's plc, Savacentre, Shaw's Supermarkets (US), Tesco plc, Walmart

Next year, Sainsbury’s, which has long maintained a place on the podium of Britain’s leading supermarkets will reach its sesquicentennial milestone – 150 years in the grocery retailing trade. Over the last 20-plus years the company has had to content itself with the runner-up position in the market leadership ladder of supermarket chains, trailing the seemingly ubiquitous and dynamic Tesco which has swept all before it. Nevertheless, Sainsbury’s has carved itself a distinctive and impressive notch among the titans of modern British retailing since it first opened for business in the Victorian era.

Foundation years, butter and establishing the Sainsbury style In 1869 the newly wed John James Sainsbury, founded Sainsbury’s in partnership with his wife, Mary Ann Sainsbury (née Staples). The two opened their first dairy goods shop at 173 Drury Lane, Holborn (London). Mrs Sainsbury played an active role in the business, in the early years she effectively managed the Drury Lane shop, making it “famous for the quality of its butter”. As Sainsbury’s built its formative business reputation largely on product quality, Mary Ann (the daughter of a dairyman) insisted on fresh milk on the shop’s shelves, as well as, that the Dutch supplier of Sainbury’s butter date-stamp every unit item it supplied [‘The History of Sainsbury’s – Trying Something New for 147 Years’, (Darren Turner, 11 Nov.), www.s4rb.com]. The freshness and purity of Sainsbury’s butter gave it a commercial edge over the competition in an era known for widespread food adulteration (eg, it was a common practice for milk to be watered down) [Judi Bevan, ‘Battle of the Supermarkets’, RSA Journal, Vol. 152, No 5517 (June 2003)].

In the 19th century Sainsbury’s rivals in the grocery game were shops like Lipton’s and Home and Colonial Stores. Early on John J Sainsbury developed a business model which made the shops stand out from the other grocers by doing things differently. Appearance was important to Sainsbury, the shops were clean and hygienic, on offer were “high-quality products and fresh provisions at prices even London’s poor could afford” (an early shop slogan was “Quality perfect, prices lower”).

A gradualist approach to growth John J Sainsbury, whose motto could well have been “Make haste slowly”✱, was in no hurry to expand the business. From the Drury Lane foundations he gradually added a shop in Kentish Town and then two more in the new railway suburb⊡. It wasn’t until 1882 that Sainbury made his first move outside London, establishing a shop in Croydon, one that specifically sought to cater for a middle-class clientele, selling comestibles which were in the luxury range (foreign cheeses, poultry and game birds, cooked meat delicacies, etc) [‘Sainsbury family’, (Bridget Salmon), Oxford Dictionary of National Biography, (23-IX-2004), www.odnb.com].

Even well into the 20th century century each new Sainsbury’s store was a matter of measured deliberation…the company continued “to place the highest priority on quality, taking the time to weigh each decision, whether it meant researching suppliers for a new product, assessing the reliability of a new supplier, or measuring the business potential of a new site” [‘J Sainsbury plc History’, Funding Universe, www.fundinguniverse.com].

During John J Sainsbury’s tenure in charge, the company established what was to become the Sainsbury’s “house style”, stores which were elaborately decorated in contrast with the other (typically drab) grocers of the day. The key to the company’s success was covering all of the bases…John James would price-match the competition while at the same time offering higher standards of quality, service and hygiene. Moreover, the likes of Home and Colonial and Lipton’s, while having numerically more shops, could not match Sainsbury’s range of products [ibid.].

Sainsbury’s “Own Brands” Although “own brands” are thought of as a modern phenomena in retail merchandising, Sainsbury’s first introduced the concept as early as 1882! The shop’s first own brand was its staple commodity – butter. Sainsbury’s continued this practice and by the 1950s there was a host of such offerings on the shelves: ‘Sainsbury’s Cornflakes’, ‘Sainsbury’s Snax Biscuits’, ‘Sainsbury’s Cola’, ‘Sainsbury’s Peas and Carrots’, etc, etc. [‘The History of Sainsbury’s’, loc.cit.]. By 1980 half of the products Sainsbury’s sold were under its own label [Bevan, op.cit.].

Modernising Sainsbury’s In 1950 Sainsbury’s refitted one of its earliest shops, in West Croydon, creating what was Britain’s first supermarket proper, one of the country’s earliest to operate as fully self-service. Some customers were at first put off by the innovation, thinking it impersonal and “anti-social”, however the convenience factor of not having to wait to be served eventually won out…Advertising and Marketing magazine reviewing the new store concluded: “From the point of view of the customer the chief advantages of self-service shopping are the speed with which shopping can be done and the ease with which one is reminded of things needed…these advantages substantially outweigh the disadvantages of not getting the personal attention of the assistant.” [‘Sainsbury ‘s return to site of first self-service supermarket’, (Graham Ruddick), The Telegraph (UK), 30-Aug-2013, www.telegraph.co.uk].

Although under its founder Sainsbury’s had been reluctant to get too big too quickly, once the company passed to his successor, son John Benjamin Sainsbury✫, the number of stores grew (though still at a trademark cautious pace). Under the strong leadership of a string of postwar CEOs (such as (John) Baron Sainsbury of Preston Candover), this trend was maintained❂.

Although Sainsbury’s followed a typically cautious approach to its business model, the company couldn’t be accused of dragging its feet when it came to embracing new technology. In the early Sixties they were the first retailer in Britain to develop a computerised distribution system and their stores were among the first to turf out electronic cash registers in favour of scanners in the late Eighties [‘J Sainsbury plc’, www.company-histories.com].

In 1973 the company went public under the holding co name J Sainsbury plc after being floated on the stock market. The 1970s witnessed increasing competition from discounters and a squeezing of profit margins, prompting an escalation in diversification…non-food items started to appear on Sainsbury’s shelves. It also innovated with the advent of ‘Savacentre’ hypermarkets and ‘Homebase’ house and garden centres. Overseas expansion was concentrated in the US – Sainsbury’s acquired Shaw’s Supermarkets, Giant Food Inc and Star Markets (its holdings in Shaw’s were unloaded in 2004).

Stumble and renewal During the Nineties, Sainsbury’s, hitherto accustomed to being the premier supermarket chain, was relegated to second place by Tesco which became supermarket “top dog” in the UK in 1995. A change-up was required at Sainsbury’s and further diversification was sought. In 1997 the company ventured into in-store banking (in partnership with the Bank of Scotland – before going it alone in 2014). During this period the 130-year direct involvement in running the company of the Sainsbury family came to an end with the retirement of David (Lord) Sainsbury. The acquisition of Bells Stores in the early 2000s signalled a move into convenience stores, adding to the variety of its retail outlets.

Sainsbury’s – status quo in 2018 and future fortunes? In the contemporary British retail landscape, Sainsbury’s, with a healthy slab of the market, is the second largest chain in the country✥ with ≻1415 stores (2017) and ≻186,900 employees (2018). Despite having long conceded first place to Tesco, this state of play is a fluid one…no longer dominated by the Sainsbury family (though it retains 15% of shares in the company), these days the majority shareholder is the Qatar Investment Authority (note comparisons with Harrods). 2018 has seen Sainsbury’s unearth a bold attempt to unseat Tesco’s hegemony through a planned merger with ASDA which would give the merged entity around 30-31% of the UK market – as against about 27.5% for Tesco (Source: Kantar). Approval of the controversial merger is still pending but could depend upon Sainsbury’s and ASDA offloading 463 of their stores to win over the competition ‘watchdog’ (CMA) [‘Walmart’s Asda agrees to UK merger deal with Sainsbury’s’, (Silvia Amaro) 30-Apr-2018, www.cnbc.com; ‘Sainsbury’s and Asda may have to offload 460 stores to seal merger’, (Sarah Butler), The Guardian, 28-Sep-2018, www.theguardian.com].

Footnote: A “leg-up” for UK supermarkets As the age of postwar austerity and scarcity gave way to an era of abundance and growth in the 1960s, supermarket heavyweights like Sainsbury’s and Tesco led the way. The supermarket chains on their expansionary arcs was facilitated by legislative changes affecting the retail sector. The abolition of resale price maintenance (RPM)✧ by the British Board of Trade in 1964 was a total game-changer! RPM had allowed (especially large) manufacturers to dictate terms to retailers, the law change shifted the balance in favour of Tesco, Sainsbury’s and co, who now could lord it over even the largest of manufacturers like Unilever and Procter & Gamble [James Buchan, Review of Trolley Wars by Judi Bevan, The Guardian, 30-Apr-2005].

PostScript: How Tesco outmanoeuvred and outgunned Sainsbury’s One of the key moves made by Tesco was to take careful note of what the older retailer was doing right (eg, offering quality in goods and service) and copying it! (in “Tesco-speak” this is called ‘benchmarking’ the opposition) [Bevan, op.cit.]. As Tesco grew incrementally it benefitted from a “virtuous circle” of business⊙. The sheer, monolithic size of Tesco allows it to buy merchandise more cheaply and accordingly sell it more cheaply. Ergo, they turn over more customers and make greater sales, and so the cycle is sustains itself [Buchan loc.cit.]. Tesco has a reputation for following intuitive hunches…being less risk adverse than other major supermarkets like Sainsbury’s it happily ventured into lower class, ‘brownfield’ areas that its competitors wouldn’t touch [Bevan, op.cit.].

—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧ ✱ Festina lente – the motto of Roman emperors Augustus and Titus, et al ⊡ a calculated, gradual approach to expansion suited John James who had a very hands-on management style, by temperament he was a “micro-manager”, immersing himself in the minutiae of the shops’ everyday transactions ✫ known for his focus on staff welfare and remembered by one of his senior staff as a “benevolent dictator”, [‘Sainsbury family’, loc.cit.] ❂ there have so many Sainsbury family members involved in the company, in British politics, in art patronage and philanthropy, to almost necessitate a scorecard ✥ although it briefly conceded second place to the Walmart owned ASDA in 2003/2004 ✧ Resale price maintenance (or retail price maintenance) is a practice where the distributor agrees to sell at a price set by the manufacturer ⊙ a business scenario the Financial Times described as “hard to create, but (also) hard to disrupt”

Top Shelf Tesco, (Super)Market Leader: The Irresistible Rise of Britain’s Leading Grocer

Posted by E Curb Nottus on November 21, 2018

Tags: 'Tescopoly', Booker Wholesale Group, Dame Shirley Porter, Jack Cohen, Marks & Spencer Ltd, NZ Snowflake canned milk, Piggly Wiggly, Royal Bank of Scotland, Sainsbury's plc, TE Stockwell tea, Tesco Bank, Tesco plc, Tesco Town Inverness, UK Office of Fair Trading, UNICEF, Woolworths UK

In the UK’s highly competitive retail world Tesco plc is the kingpin grocer, at the top of the tree of Britain’s supermarket chains. With over 3,400 stores across the UK and a presence in around a dozen countries worldwide✱, Tesco pulled in revenue in 2017 to the tune of £55.9B. The retailer’s origins though, way back at the end of the Great War, were of course much more humble. Like fellow high-flying UK retailer, Marks and Spencer, it began with one man and a market stall operation.

Jack Cohen got the business ball rolling in 1919 with a basic stall✥ in the Well Street Market, Hackney, London…for start-up capital Cohen (born ‘Jacob Kohen’) had a £30 stipend from his recent WWI service. From his barrow and stall operation, the antecedent of Tesco, the 21-year-old started off selling matzos (unleavened Jewish crisp bread) and other army surplus food he had purchased. On opening day Cohen made a princely £1 profit from a grand total of £4 in sales [‘A History of Tesco: The rise of Britain’s biggest supermarket’, by Tim Clark and Szu Ping Chan, The Telegraph, 04-Oct-2014, www.telegraph.co.uk].

Genesis of the business name In the early days, a big-ticket item that Cohen sold was tea from T E Stockwell (in fact the first product sold by Cohen under the Tesco brand). From the Stockwell name Cohen simply took the first three initials ‘T E S’ and added the first two letters of his own name ‘C O’ on to the end of it – thus forming the business’s famous name, ‘TESCO’ (and unsold “Stockwell Tea” got repackaged and rebranded as “Tesco Tea”).

From North London to the nation Cohen opened his first shop in Burnt Oak, near Edgware, North London, in 1931. Within a short period he had built the company headquarters and a central warehouse also in North London (Edmonton). The London retailer’s strategy was twofold – to expand by gradually buying out smaller grocery stores, and to buy the unsold merchandise other grocers couldn’t sell, which he would repackage and rebrand and then on-sell it to the public cheaper than anyone else (earning himself the nickname ‘Slasher Jack’) [‘Tesco UK, brief history and overview’, www.eeph.org.uk].

Cohen’s business motto, and therefore the company’s motto, was “pile it high and sell it cheap”, a straight-forward business philosophy of “low cost and high volume”✪ along the line of the large Woolworths chain. One of Cohen’s “bargain basement” product mainstays was ‘Snowflake’, a New Zealand canned milk which accounted (together with Tesco Tea) for much of the early Tesco sales [Sarah Ryle, The Making of Tesco: A Story of British Shopping (2013)]. By 1939 there were in excess of 100 Tesco shops all round the United Kingdom. Where Cohen chose to locate a Tesco, seems according to his daughter (the future Conservative MP Dame Shirley Porter) to have been something of an intuitive hunch. As she later explained, they’d be driving around town and “he’d suddenly say ‘this looks like a good place for a shop’ and he’d leap out and chat a few people up”. This was the very hands-on way Cohen would conduct market research [Ryle, op.cit.].

First with self-serve Jack Cohen’s introduction to the idea of self-service grocery outlets came on a visit to the US in 1935…Cohen was initially not impressed. The immediate postwar period in Britain was characterised by a hike in wholesale costs of goods, which could not be passed on to customers due to the burdens of postwar austerity. Cohen made a return visit to the US at this time, accompanied by his son-in-law Hymon Kreitman who was enthusiastic about the American self-serve concept as typified by the pioneering Piggly Wiggly supermarkets. Cohen, influenced by Kreitman, eventually opened Tesco’s (and Britain’s) very first self-service shop at St Albans (Herts.) in 1948 as a way of countering the rising costs of commodities. Another first for Tesco was the first supermarket in the UK, opened in 1958, located in Maldon, Essex (it featured separate counters for meat, butter and cheese) [‘Jack Cohen (businessman)’, Wikipedia, http://en.m.wikipedia.org].

Maldon supermarket (interior) ⬇️

Expansionary growth The 1950s and ’60s for Tesco was marked by unbounded expansion through the acquiring of many smaller grocery shops. Among the scalps of small retail outlets claimed by the burgeoning company were Burnards stores, Williamson’s shops, Harrow stores, Irwin’s shops, Charles Phillips’ shops and the Victor-Value chain (this last concern was unloaded by Tesco in the Eighties). Between 1955 and 1960 alone, Cohen bought over 500 new shops across the country [‘Tesco: How one supermarket came to dominate’, (Denise Winterman), BBC Magazine, 09-Sep-2013, www.bbc.com].

After Jack died in 1979 Tesco’s expansionary trajectory continued unabated…there was a hostile takeover of Hillards supermarket chain in 1987, the acquisition of William Low shops in 1994 gave them a greater market concentration in Scotland, as did the snaring of Associated British Foods three years later for Ireland and Northern Ireland. The Safeways/BP shops, and a move into convenience stores T&S Stores and Adminstore followed. The opening of Tesco’s Leicester “super-sized” store in 1961 made it, at that time, the largest grocery store in Europe. By the 1990s Tesco had overtaken Sainsbury’s as Britain’s largest food retailer. So extensive has been the spread of Tesco shops, it is thought that only one postcode in the entire UK – Harrogate in North Yorkshire – doesn’t have a Tesco in it! [Clark & Chan, op.cit.].

Diversifying Tesco From the Sixties Tesco started to diversify in a big way! To the traditional staple of grocery lines were added clothing, books, furniture, software, internet services and in 1974 the sale of petrol. The Tesco Bank (financial services) was launched in a joint venture with the Royal Bank of Scotland, and later gained a foothold in the communications field with the advent of Tesco Mobile [‘Tesco’, Wikipedia, http://en.m.wikipedia.org].

Diversification also meant a dilution of Slasher Jack’s traditional retail philosophy of providing only the cheapest of the cheap. This change-up saw Tesco for the first time add upmarket quality items to its catalogues. The physical nature of Tesco’s retail outlets diversified during this period. To the standard supermarket format was added hypermarkets (called Tesco Extra) at one end of the spectrum, and “one stop” shops/neighbourhood convenience stores (Tesco Express) at the other. In between these polarities were Tesco Metro and Tesco Superstores. Such market manoeuvrability by Tesco has drawn praise from business analysts – Citigroup’s David McCarthy acknowledges Tesco’s capacity to “appeal to all segments of the market” [‘Tesco: Supermarket Superpower’, (Hannah Liptrot), 03-Jun-2005, www.bbc.com]. It has also been (reluctantly) commended by a critic of the grocery Goliath for its “clinical efficiency with which it carries out its business plan” [Andrew Simms, Tescopoly: How One Shop Came Out on Top and Why it Matters, (2007)].

Tesco Malaysia

Internationalising Tesco Inevitably, growth and profitability at home meant external expansion for Tesco, a move towards globalisation. The company acquired various overseas market footholds with majority stake holdings in established Turkish supermarket chain Kipar and in Polish Leader Price wspanialy-rynki (supermarkets), among others. The overseas results however have tended to fall well short of Tesco’s stellar domestic performance. A 2006 move into the US market with the Fresh & Easy chain was unsuccessful, resulting in a £1.2B loss and in 2013 Tesco completed their pull-out from North America [‘Wikipedia’, op.cit.].

Inverness high street

Too big, too damaging? The phenomenal retail success of Tesco ⌖ is encapsulated by the popular phrase in Britain, “£1 in every seven went into a Tesco till!” Inverness in the Scotland Highlands (known locally as ‘Tesco Town’) personifies the dominance of Tesco – 50p in every £1 spent on food, it is calculated, is derived from one of Tesco’s three shops in the northern city [Liptrot, loc.cit.; ‘The supermarket that ate a town’, (Lorna Martin), The Guardian, 01-Jan-2006, www.theguardian.com]. Other cities and towns across the UK share Inverness’ concerns of urban domination by the retailer…Seaton in Devon’s east is staring at the prospect of becoming another “Tesco Town”. Tesco has flagged plans to build a superstore, hundreds of ‘Tesco’ homes and a hotel in the small town, triggering determined local opposition to the scheme [‘This town has been sold to Tesco’, (Anna Minton), The Guardian, 05-May-2010, www.theguardian.com].

Ultimately, it is Tesco’s size that courts the company’s most strident criticism and opposition. Increasingly, the sheer size and scale of the supermarket empire gives it a disproportionate degree of bargaining power with manufacturers. Since 2000 the British authorities have sought to address the uncompetitive nature of the status quo, a code of practice was enacted in that year to try to curb Tesco’s (and other large retail players’) market dominance to the serious detriment of small traders in the UK (the National Consumer Council has described Tesco as “the Marmite of British business”). Interestingly, consumer surveys in the UK point to the consumer public’s “Janus-headed” take on Tesco, it ranks as both the “most trusted” and the “least trusted” of companies in the country! [David Gray (Analyst, Planet Retail), quoted in Winterman, op.cit.]. The recent Tesco takeover of Booker Wholesale Group (2017/18) for £3.7B, given the green light by the UK’s competition watchdog (CMA), has however provoked widespread disquiet within those in British society concerned at what they see as yet another monopolistic move for the retail behemoth [‘Tesco’s £3.7bn Booker takeover waved through by competition regular’, (A Armstrong & J Torrance), The Telegraph (UK), 20-Dec-2017, www.telegraph.co.uk].

Ripples in the Tesco ocean The hostility of small retailers at Tesco’s strangulation of competition in the supermarket field❅ is not the only discordant note in Tesco’s recent history. Its high public profile has prompted at least two attempts at extortion using the threat of letter bombs…in 2000-2001 an individual tried to extort £5M from the supermarket giant (he was subsequently caught and jailed for 16 years); later a former tax inspector demanding £1M from Tesco, tried the same method (also apprehended and imprisoned). Tesco has tended to court controversy on occasions, eg, quantities of horsemeat were discovered in burgers and spaghetti sold by Tesco, and of course almost a by-product of runaway commercial success, there has been a slew of charges over the years that Tesco was engaging in tax avoidance schemes, tax minimisation, etc. Tesco was heavily criticised by the CEO of UNICEF UK in 2009 for appropriating the children’s charity’s slogan “Change for Good” and crassly using it for commercial advantage in company advertising [‘Unicef accuses Tesco of misusing charity slogan’, (Marie O’Halloran), The Irish Times, 25-Jul-2009, www.irishtimes.com]. As well there have been isolated incidences of individual Tesco shops discriminating against blind people (especially barring entry) [‘Tesco’, Wikipedia, op.cit.]. Tesco’s corporate response after such periodical outbreaks of bad PR has been to launch charm offensives aimed at the public (such as its “Good neighbour” policy in the 2000s) [Simms, loc,cit.].

Until very recently Tesco has experienced seemingly unstoppable success. However things troughed for the retailer during financial years 2013-14 and 2014-15, in the latter year Tesco lost £6.4B, its worse fiscal performance in 20 years! [Clark & Chan, op.cit.]. Since then the supermarket chain (boosted by acquiring the Booker cash and carry group) has to no one’s surprise bounced back, in 2018 recording its strongest growth in seven years (UK and Irish sales rose 3.5%). It has also just introduced Jack’s stores which it hopes will wrest back losses in the discount store market from front runners, German supermarket heavyweights, Aldi and Lidl [‘Tesco posts highest growth in seven years’, (Sarah Butler), The Guardian 15-Jun-2018, www.theguardian.com].

PostScript: Tesco to (super)market leader What makes Tesco a cut above its rivals? Enormity of size and utter ruthlessness and aggression in business dealings has been a factor, but according to some observers, the key to its success has been its ability to read customer behaviour: going way back Tesco has been meticulous about collecting raw data on what consumers were buying, invaluable information for anticipating future patterns, staying ahead of the curve! Tesco introduced loyalty schemes, personalised discounts and rewards for its customers, above all the Tesco Clubcard (“Every little helps”) – the card was an immediate hit, within a year of its debut (1995), Clubcard holders were spending 28% more at its stores and Tesco was number 1 with a bullet in the rankings of British grocers [Winterman, loc.cit; ‘The card up their sleeve’, The Guardian 19-Jul-2003, www.theguardian.com].

~~〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦~~ ✱ including stores in Ireland, Poland, Hungary, the Czech Republic, Slovakia, Malaysia, India, South Korea, Japan, Taiwan and Thailand (and previously in the US) ✥ his precise start in the world of retail sales was in fact as a barrow boy ✪ to which he added an internal one, actually a motivational pitch for sales staff, “YCDBSOYA” (You Can’t Do Business Sitting On Your Arse”) [‘Shirley Porter: Rich, flashy and corrupt with it. She’s nothing like a Dame’, (Sean O’Grady), The Independent, 16-Dec-2001, www.theindependent.co.uk] ⌖ fifth biggest grocery chain in the world, biggest UK retailer by sales, biggest UK employer (>330,000 staff) [Winterman, loc.cit.] ❅ for instance, the Office of Fair Trading investigated the company for allegedly forming a cartel of supermarkets (with Safeway, Asda, Morrisons and Sainsbury’s) to fix the price of dairy products

Marks and Spencer: From a Kirkgate Penny Bazaar to London High Street Heavyweights

Posted by E Curb Nottus on November 4, 2018

Tags: Kirkgate Market (Leeds), London bombing raids - WWII, M&S Marble Arch flagship store, Marks & Spencer Ltd, Michael Marks, Simon Marks, Tesco, Thomas Spencer

Before the principals of Marks and Spencer teamed up, the entity was singular, just the one aspiring retailer, Michael Marks, and of material necessity he started very small. A late 19th century immigrant refugee from the Russian Empire’s Byelorussian region, Marks launched his first penny bazaar stall in Central Leeds’ Kirkgate Market with start-up funding amounting to one £5 note – which he had borrowed! Marks met his future partner at this time, Thomas Spencer, and eventually went into business with him after the latter, a Yorkshire cashier, invested £300 for a half-share in what became Marks and Spencer✱.

Early days: Establishing a chain of “penny bazaars” Michael Marks kicked off with a very basic business model: his initial stall in Leeds was a “one penny stall”, hence the business’ motto, “Don’t ask the price, its a penny”⊡. The early stall commodities focused on household goods, haberdashery, toys and a sheet-music business (note the early spelling of the store name with an errant plural ‘s’ in ‘Spencer’ in the photo at left). Marks (the more dynamic and “hands-on” of the partners) immediately set about expanding the business, first up establishing a shop in Manchester. By 1894 Marks and Spencer had graduated to a permanent stall in Leeds’ covered market (in 1904 they opened their first Leeds shop) and in 1901 concentrated its open market operation in Birkenhead on Merseyside.

Forging a regional retail identity The two partners initially focussed locally, concentrating on Yorkshire and Lancashire, a new warehouse in Manchester (1897) became the early centre of the M&S business empire which numbered 36 branches by that time…the firm accumulated stalls (later on, shops) in towns and cities across the North of England (Manchester, Liverpool, Hull, Sheffield, Middlesbrough and Sunderland) as well as further south (Birmingham, Bristol, Cardiff, Swansea, etc) [‘The History of Marks and Spencer’, (h2g2, 2008/2012), www.h2g2.com].

By the early 1900s Marks and Spencer was starting to yield a very tidy surplus, becoming a limited company in 1903. At this juncture Thomas Spencer decided to cash in and retire from the partnership with a nice “nest egg” of £15,000 (for his initial outlay of £300) [‘Thomas Spencer (Marks and Spencer)’, Wikipedia, http://en.m.wikipedia.org]. Sadly for both Spencer and Marks, neither got to enjoy their monetary success long – Spencer died in 1905, followed by Marks in 1907. Nonetheless the prestigious company name has long outlived the two founding principals, thriving into the 21st century.

The end of “British-only” and “home-brand only” In the early 20th century M&S, entering into long-term relationships with British manufacturers, emphasised a policy of selling only British-manufactured goods, clothes and food were sold under the famous “St Michael” brand (named after founder Michael Marks). The fluctuating commercial fortunes of the company in the 1990s led to M&S relenting somewhat on this policy.

Textiles and food By the Twenties M&S had moved into the sale of textiles in a big way (launching its own laboratories to commercially produce new fabrics for the British market). In 1931 it added food to its portfolio of products…M&S’s own food technology department (from 1948) allowed it to offer chilled poultry to customers, instead of the hitherto frozen or pre-cooked options (courtesy of a new technology it called “cold chain distribution”) [‘What 130 years of M&S history can teach us about innovation”, (Hannah Jenkinson, 2018), www.about.futurelearn.com].

By the 1960s these two commodities, textiles and food, were firmly ensconced as the staples of Marks and Spencer. M&S were forerunners in introducing retail practices that enhanced customer satisfaction, such as the “money-back, no questions asked, no time limit” policy.

Marble Arch – M&S flagship store ⬆

In 1930 Marks and Spencer established itself in the United Kingdom’s financial capital, opening a mega-sized London store at 458 Oxford Street, W1. The Marble Arch store which was to become the company’s flagship store, would go on to compete with those other leading retailers of quality merchandise already with abase in Oxford Street, Selfridge’s and John Lewis’. Marble Arch wasn’t in fact M&S’s first retail outlet in London, that honour went to the one in nearby Edgware Road (which is actually closer to the Marble Arch monument than the Marble Arch M&S!). The Edgware Road store began as a penny bazaar in 1912 with additional floors added in the 1920s. During World War II the building was damaged by German incendiary bombs (as was Marble Arch tube station in an earlier Nazi air raid). In 1959 the original store at Nº228 Edgware Road was closed and replaced by a new, much bigger store at 258-264 Edgware which opened just six days later [‘The History of Marks & Spencer Edgware Road’, (Jan. 2017), www.marble-arch.london].

Nº228 Edgware (Source: M&S Co Archive) ⬇

M&S shift of strategy in an increasingly volatile retail market At the turn of the 21st century Marks and Spencer’s prospects appeared fairly sanguine…in 1998 it became the first British retailer to achieve a pre-tax profit of over £1B.

But in the first decade of this century, M&S, sensing the need to compete for more of the market, made some seismic changes. The standard–bearer St Michael’s brand was dropped, other longtime lines were rebranded. The company moved away from its emphasis on “British quality goods”, starting to sell big-name grocery lines like Marmite, Kellogg’s Corn Flakes and KitKats in its stores [‘Marks and Spencer to start selling top brands’, (G Hiscott), The Mirror (UK), 04-Nov-2009, www.mirror.co.uk] (previously it had concentrated on ‘luxury’ food products exclusively). This marks the recognition by Marks and Spencer that the falling trend of clothing sales needed to be heavily supplemented by popular food items.

Marks and Spencer (colloquially and affectionately known on the street as “Marks and Sparks”) as at April 2017 could list a total of 959 operating stores across the UK✣, 615 of which traded in food only (the “Simply Food” label), evidence of how food products had come to prop up the other traditional areas of the business. Future prospects for the major British retailer remain somewhat nebulous after the company signalled in 2018 its intent to close around 100 M&S stores in the country by 2022. Retail finance watchers have also questioned, with such a reliance on food items, whether M&S can ultimately match it with the UK’s food and groceries powerhouse Tesco [‘M&S online food delivery service will be no piece of cake’, Robert Plummer, BBC News, 28-Apr-2017, www.bbc.com]. Still, Marks and Spencer remains in majority British hands (unlike its rival heavyweights Harrods and Selfridges).

⬆ Commemorative M&S clock in Leeds market

━━━──━━━━──━━━━──━━━━──━━━━──━━━━──━━━ ✱ the foundation date for the company is traditionally given as 1884, however the exact date the partnership began between Marks and Spencer seems conjectural – other candidates are from 1894 (the Leeds permanent stall) or from 1901 (the Birkenhead market) ⊡ product inexpensiveness was not to stay the M&S catch cry – by the late 1920s Simon Marks (the founder’s son who had assumed the reins) placed a 5/- limit on items. Long before this M&S had made the store focus one of quality over cheapness ✣ plus over 200 overseas stores in at least 40 countries

John Lewis, Senior and Junior: A Contrast in Pathways Up the Retailing Ladder

Posted by E Curb Nottus on November 1, 2018

Tags: (John) Spedan Lewis, Harrods, Harry Gordon Selfridge, John Lewis Snr, Lord Howard - Baron de Walden, Peter Jones - Chelsea, Selfridge & Co, Waitrose Ltd

The path taken by John Lewis in scaling the heights of retail commerce was typical of many embryonic and aspiring owner-drapers in mid-Victorian Britain. Somerset born and raised, Lewis started his first modest shop in Nº132 (later re-numbered) Oxford Street, London, in 1864 (taking the sum of 16s & 4d on opening day). His first twenty years in business for himself were far from glamorous, a period dominated by hard and dreary ‘yakka’ and slow piecemeal accumulation and consolidation. The tortoise approach – slow and steady Lewis took a conservative, uncomplicated (“keep it simple”) approach to retailing and only slowly moved his lines from silks, woollens and cotton fabrics to dress fabrics and clothing and later to furnishing fabrics and household supplies like China and ironmongery (but never food!). His philosophy was sell cheap and no ads (for nearly a century the John Lewis company continued a practice of minimal advertising!)✱. Unsurprisingly for a man described as “a Victorian curmudgeon” [‘John Lewis (1836-1928)’, Geoffrey Tweedale, Oxford Dictionary of National Biography, 06-Jan-2011, www.oxfordnb.com], his management style was rigidly autocratic, he often had abysmally poor relations with his staff and was prone to effecting arbitrary and sometimes wholesale dismissals. In 1920 Lewis’ “pig-headedness” and anti-union stance triggered deleterious industrial conflict…in 1920 the unaddressed grievances of Lewis’ shop-girls led to a strike by 400 staff. Lewis simply sacked the strikers and replaced them, but his arbitrary action brought him discredit and caused commercial ruptures adversely affected the company’s competitiveness vis-à-vis its retailing rivals in the long-term. ‘How John Lewis was the original store wars: As the retail empire celebrates 150 years, we tell its fascinating story’, (Brian Viner), The Daily Mail (UK),, 04-Jul-2014, www.dailymail.co.uk]

ef=”http://www.7dayadventurer.com/wp-content/uploads/2018/11/image-1.jpg”> Flagship store 1939 (Source: John Lewis Memory)[/cap

Lewis adopted an habitually “penny-pinching” stance when it came to running the store’s finances. In this he was the diametrically opposite of his Selfridges contemporary, the ostentatious, big spending, big advertising Harry Gordon Selfridge. In the eyes of Lewis, Selfridge must have seemed absolutely criminally profligate! Nonetheless Lewis did earn “brownie points” with London consumers for his straight dealing and commitment to the purveyance of quality goods, and profits grew accordingly. Sales for the ‘John Lewis’ stores rose from an underwhelming £25,000 in 1870 to a commendable £921,000 in 1921.

http://www.7dayadventurer.com/wp-content/uploads/2018/11/image-2.jpg”> Peter Jones[/caption

Another instance of Lewis’s circumspect approach was his reluctance to expand the business. It was not until 1906 that he made a move in this direction, purchasing the ailing Peter Jones store in Chelsea after the death of the store’s original Welsh owner✧. During his long lifetime John Lewis made no further expansionary attempts. The company during this period was clearly hamstrung by a lack of dynamic vision under its founder – losing vital retail ground to the likes of Whiteleys and Owen Owen [Tweedale, loc.cit.].

Father v son Lewis’s innate caution also showed itself in his hesitancy in passing even a portion of control of the firm over to his sons, especially his eldest son John Spedan Lewis. When Lewis’s sons came of age, he gave them a limited role only…Spedan (as he was universally called) was put in charge of the newly acquired Peter Jones store (presumably to keep him from interfering with the central operation of the business). Spedan increasingly clashed with Lewis Senior over their fundamentally different approaches to business, with Spedan in charge of Peter Jones and JL Senior holding sway in Oxford Street HQs, relations between father and son deteriorated alarmingly (characterised in some quarters as equating to intra-family “store wars”) [Viner, loc.cit].

After the founder’s death in 1928 Spedan was free to fully implement his more progressive management ideas – in the area of staff relations these were often light years away from his father’s outmoded views and intransigent bellicosity…once at the helm Lewis Junior started by cutting working hours and introduced tea-breaks for the staff…Spedan envisaged further, more radical, plans for modernising ‘John Lewis’ and propelling it forward in the Thirties.

Under Spedan’s watch – JLP up and away! Spedan wasted no time in taking ‘John Lewis’ in a very different direction to his late father’s ultra-cautious, steady-as-it-goes approach. In 1929 he reformed the enterprise into a public limited company, John Lewis Partners (JLP). Staff were rebranded ‘partners’ and made shareholders in the firm. Spedan diversified and pursued an expansionary route that Lewis Senior had so long doggedly eschewed. Smaller, less profitable chains were acquired – from 1933 on Spedan widened the John Lewis Partnership dramatically, adding purchased stores for the first time outside of London – Nottingham, Weston Super-Mare, Portsmouth and Tyrrel, Southampton, etc. [‘The 1930’s; a period of growth’, (Johnathan Blanchford), (‘John Lewis Memory Store’), www.johnlewismemorystore.org.uk]. One of JL Junior’s ideas was to create a chain of John Lewis hotels, and to supply these hotels he bought a chain of grocery shops, known as Waitrose, in the Thirties. Waitrose proved a spectacularly profitable acquisition for John Lewis’⊛. As of 2016 there were some 353 Waitrose supermarkets across the UK, collectively worth more than £1B (one of only five such successful food and drink brands in Britain) [‘Waitrose’, Wikipedia]http://en.m.wikipedia.org.

In the Forties John S Lewis bought up some of the failing Selfridge business concerns after the former high-flying company plummeted and Harry Selfridge was forced out to pasture and into retirement. Other (overseas) business moves into South African draperies however turned out to be unsuccessful ventures [‘John Lewis’, Wikipedia, http://en.m.wikipedia.org].

▼ Spedan Lewis

Although Spedan was less autocratic, and certainly less confrontational✣, than his father, he was no democrat when it came to running the John Lewis business empire. Some observers (including insiders), recognising an inherited family trait, saw Lewis Junior as a “my way or the highway” type of business leader. Recollections of some ex-staff and associates point at a Spedan inclination to public losses of temper and the arbitrary and unfair treatment of staff on occasions, with a suggestion of a peculiar bias against staff (including managers) with ginger hair [‘Memories of Spedan – not all sweetness and light’, (Margaret Cole), (‘John Lewis Memory Store’), www.johnlewismemorystore.org.uk].

Today JLP remains an employee-owned British company (consistent with the “worker-cooperative” entity (the ‘Partnership’) as initiated by Spedan Lewis in 1929). According to the Sunday Times it is the third largest private UK company by sales – £3.78B revenue in 2017 [“The Sunday Times HSBC Top Track 100 league” (2016)]. As a retail operator JLP maintain its traditional market position as a chain of high-end✫ department stores⊡, competing with its historic, equally upscale rivals in the merchandising field, Harrods and Selfridges.

FN: the corporate colours of retailing John Lewis’s store colours have traditionally been green and white – supposedly because Spedan Lewis wrote his memos exclusively in green ink (the auditor’s colour!) on white paper [Tweedale, loc.cit.]. Interestingly, green seems to be the preferred colour of successful London-based retailers…Selfridges’ salient business colour is also green, and both Harrod’s and Marks and Spencer’s traditional hues are green and gold.

2013: John Lewis presence in Westfield’s Shepherds Bush mall ∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸ ✱ the John Lewis motto (dating from 1925) characteristically is “never knowingly undersold” ✧ the sale was the stuff of legend in London retailing – Lewis reportedly walked the distance from Oxford Street to the Sloane Square, Chelsea, Jones premises, with bank notes in his pocket to the value of £20,000 to complete the purchase in person. Today, Peter Jones is the ‘posher’ sibling of the John Lewis store ⊛ Waitrose is an upmarket grocer in line with the general emphasis of John Lewis merchandising ✣ JL Senior’s quarrelsome, confrontational nature was often fraught with consequences – a protracted turn-of-the-century legal dispute with Lord Howard, Baron de Walden, saw Lewis being sentenced to three weeks in gaol in 1903 for contempt of court [‘How John Lewis ended up in prison. A new century same old Mr Lewis’, (J Blanchford), (‘John Lewis Memory Store’), www.johnlewismemorystore.org.uk] ✫ a monumental departure from the early days of JL Senior’s “sell cheap” strategy ⊡ currently around 30 JL stores in England, Scotland and Wales and concessions in the Republic of Ireland and Australia

The Selfridges Story: The Making and Unmaking of Harry (or Several Lessons in Cultivating Customer Satisfaction)

Posted by E Curb Nottus on October 28, 2018

Tags: Daniel Burnham, Harrods, Harry Gordon Selfridge, John Lewis & Partners, John Musker, LCC (General Powers) Acts of 1908 and 1909, Marshall Field & Company, Oxford Street W1, Selfridge & Co, Suffragette Movement

“People will sit up and take notice of you if you will sit up and take notice of what makes them sit up and take notice.” ~ HG Selfridge

⊹⊹⊹ ⊹⊹⊹ ⊹⊹⊹

Before I ever visited the UK I wasn’t at all familiar with Selfridges. I knew about Knightsbridge and Harrods and its preciously preserved pedigree all right…we’ve done that! My first time in London I was on a bus travelling (make that crawling) down Oxford Street heading towards the West End when I was enlightened as to the existence of the second-best known upmarket London department store. As the bus idled stationary I spotted a sign in front of a building that said ‘Selfridges’, my first thought, I remember, was “strange name!”…but when I think about it now I vaguely recall that I had previously heard the name Selfridges, but without inquiring further at the time I sort of formed the literal impression that it was a store as the name sounded that “sold fridges”, ie, a purveyor of domestic white goods! So when I did eventually get my beak inside the store’s doors at 400 Oxford Street I was surprised to see lines and lines of (pricey) fashion wear, shoes, accessories, skin care products, bags and more – but not one refrigerator in sight! (in its time it has apparently sold most everything!)

Even without visiting Selfridges’ flagship Oxford Street store, you may well be aware of it or of its US-born founder Harry Gordon Selfridge thanks to the recent ITV television series Mr Selfridge (first aired in 2013). The series was a period drama about the flamboyant, visionary retailer and the interactions that take place around him in his eponymous London department store✱.

A Marshall Field blueprint for London Wisconsin-born Harry Gordon Selfridge initially earned his business ‘spurs’ working for Chicago department store Marshall Field & Company (right), this segued into him purchasing his own department store in Chicago. In hardly any time at all the mercurial Selfridge abruptly re-sold the business, making a quick profit and retired to play golf. In 1906 while holidaying in London, Selfridge sensed a new retail opening for his entrepreneurial talents in the British capital. For £400,000 he purchased land and surrounds for a novel custom-built, mega-department store in the then unfashionable, western end of Oxford Street [‘Harry Gordon Selfridge’, Wikipedia, http://en.m.wikipedia.org].

“The American Invasion of London” The London press was not initially warm to the notion of the American’s incursion into the world of London commerce. The City’s daily and drapery trade press described it as an “American Invasion of London” [Lawrence]. Selfridge’s loud in tone and bombastic approach to selling the project didn’t help in endearing him to the newspapers (described in some publications as being “aggressively big in scale”). Selfridge’s efforts to make the store a reality were driven by an unwavering vision: creating a “monumental retail emporium” was in his eyes the key to elevating “the business of a merchant to the Dignity of Science” (as he grandiosely put it). Selfridge believed to achieve that, he had to construct a gigantic “technologically advanced department store”, hence the massive amount of money, time and effort he put into the project [LAWRENCE, J. (1990). ‘Steel Frame Architecture versus the London Building Regulations: Selfridges, the Ritz, and American Technology’. Construction History, 6, 23-46. Retrieved from http://www.jstor.org/stable/41613676]. A ground-breaking, landmark modern steel-framed building Construction of the Selfridge store was something of an architectural coup in itself. It won praise in its day from British building journals for its innovative construction methods…built with steel frames and reinforced concrete allowing for much narrower than usual walls, the frames permitted a far greater window area, so very large plate-glass windows could be installed (12 of which were the largest sheets of plate-glass then in the world!) – making for much more interior natural light and brightness (designed by famed US architect Daniel Burnham and associates). Originally comprising a 250′ x 175′ site, Selfridge’s had nine Otis passenger and two service lifts and six staircases. 100 separate departments were spread out over eight floors. While the physical construction of the Oxford Street store took only 12 months, Selfridge had first to overcome London City Council’s raft of objections (unprecedented size of the commercial structure, fire danger, etc). Selfridge and his engineers’ lobbying of the LCC Committee eventually resulted in the passing of two local building acts – LCC (General Powers) Acts of 1908 and 1909 – necessary for the Oxford Street project to be completed [Lawrence, ibid.]☯.

Rigid building regulations weren’t Selfridge’s only impediment to making his dream store a reality. Half-way through the project funding became a pressing issue when his partner and main backer Sam Waring, frustrated by Harry’s “grandiose and reckless approach” to the venture (Selfridge had grievously underestimated the complications of the project), withdrew his financial backing. The economic downturn in London (and in the US) at the time made alternative sources of funding a very grim prospect, and disaster was only narrowly avoided when a new backer, millionaire tea tycoon John Musker stepped in to rescue Selfridge [Gayle Soucek, Mr Selfridge in Chicago: Marshall Field’s, the Windy City and the Making of a Merchant Prince, (2015)]. After the big opening Selfridge remembered to make sure the store’s product lines included everything to do with tea-making (teapots, cups and saucers, sugar bowls, etc) [‘Selfridges: 7 things you (probably) didn’t know about the department store’, (History Extra), www.historyextra.com].

Selfridge, customer-centred strategies ahead of the curve Harry’s approach to retailing was characteristically innovative on many fronts. Selfridge placed tremendous faith in advertising, the 1909 campaign leading up to the store’s opening cost a reported $500,000 in 1909 money [‘Selfridge Dies: Ripon Lad Who Jolted Empire’, The Milwaukee Sentinel, 9-May-1947 (online fiche)] (Britain’s biggest ever ad bill to that point) and he used it imaginatively together with ingenious publicity campaigns. Selfridge was the first retailer to make popular the idea of “shopping for pleasure”, rather than it being solely a functional task undertaken for necessity (as people conceived of it prior to Harry’s advent). In-store activities and arrangements often were original and novel (eg, displaying the monoplane used by aviator Louis Blériot in the first cross-English Channel flight at Selfridge’s (1909)✜). Another interest-generating feature in the store was Logie Baird’s television prototype shown on display in 1925.

Those specially designed wide windows were put to optimal use, Selfridge was the first to utilise window dressing where he could show off the latest fashions and utensils in open display [‘Selfridges 7 things’, loc.cit.]. The staff at Selfridge’s Oxford Street store (initially comprising 1,400 employees) were instructed to assist customers in their purchases, not to pester or use any “hard-sell” tactics on them⊟. Harry’s philosophy was “first get them in, then to keep them there. Thereafter they would buy” (Woodhead). One of Selfridge’s more forward-thinking moves was to locate the goods where they were visible and accessible to customers all around the store’s interior (a practice he devised while at Marshall Field’s in Chicago), rather than hiding them away from sight under counters (as had been the practice in most retail stores hitherto). He also introduced the concept of the “bargain basement” to retailing, a section where shoppers could find regularly discounted commodities [‘Innovation Lessons From The World’s First Customer Experience Pioneer — Infograph’, (Blake Morgan), Forbes Magazine, 26-Jun-2017, www.forbes.com ; Lindy Woodhead, Shopping, Seduction & Mr Selfridge, (2012)].

A visceral, holistic experience Selfridge’s vision was to make the department store more than just a shop where you went to buy goods, he continued to introduce new features to Selfridges…elegant (moderately priced) restaurants, a library, reading and writing rooms and special reception rooms for French, American and ‘Colonial’ clientele. There were cookery demonstrations in the kitchenware section. All this marked a radical departure from the practices of other department stores which employed floorwalkers to ‘shoo’ people out of the store who were just hanging around and not actively engaged in buying an item! Even the store’s roof was put to productive if curious usage (a shooting range for an all-girl gun club as well as an ice rink✧) [Lawrence, loc.cit.].

The female shopper as an identified demographic Selfridge saw the role of the department store in macrocosmic terms – “the store should be a social centre, not merely a place for shopping”. Unlike the conservative establishment of the day and much of the mainstream, Selfridge endorsed the Suffragette Movement…the new store was (in part) “dedicated to woman’s service”. In a 1913 advertisement Selfridge described the store thus: Selfridge and Co: The Modern Woman’s Club-Store” [‘Suffrage Stories/Campaigning for the Vote: Selfridge’s and Suffragettes’, Woman and her Sphere, (Elizabeth Crawford), 16-May-2013, www.womanandhersphere.com; ‘Selfridge Lovers: The Secret behind our house’, www.selfridge.com]. Astute businessman that he was, Harry popularised shopping as a leisure activity specifically for women…to make it a more welcoming and conducive place for them to spend time (and money!), he displayed freshly scented floral arrangements and had open vistas in the store, he employed musicians to perform and added beauty and hair salons (Paris-inspired) and art galleries. And he introduced public restrooms for women to the store (the first time ever done!)❅ [Forbes, loc.cit.].

The H.G.S. leadership style As retail magnate go, Selfridge went against the grain for his day by not being an authoritarian business leader. He was temperamentally inclined towards fairness with regard to remuneration, increasing the wages of his staff, elevating them above “wage slavery”, treating them as employees as opposed to ‘servants’ (cf. Harrods) [ibid.]…not to overstate it, Selfridges shop floor staff were still exposed to long, long hours of drudgery but they were paid a livable wage for their arduous labours. A sample of the quotes attributed to Selfridge reflect his anti-dictatorship approach to business and interpersonal relations: “The boss drives his men, the leader coaches them” ; “The boss depends on authority, the leader on good will” ; “The boss says ‘I’, the leader says ‘We'” ; “The boss inspires fear, the leader inspires enthusiasm” ; “The boss fixes the blame for the breakdown, the leader fixes the breakdown” ; etc.✥ [‘Harry Gordon Selfridge’, Wikipedia, op.cit.]

Tower folly Selfridge’s thrived, prospered and grew after the Great War (the store size doubled). Things didn’t always go the Wisconsin-born retail magnate’s way however…a couple of commercial reversals suffered by Harry during the decade concerned his plans for erecting a massive tower from the building which was rejected by the LCC Committee because of excessive height, and possibly also because it would have vied with the iconic St Paul’s Cathedral for attention (a fortunate outcome perhaps as the model drawings for the tower suggest the result would have been an incongruous coupling of architectural forms and a hideous eyesore!) [Lawrence, op.cit.]. The other setback was Selfridge’s proposal for a tunnel between the store and the nearest tube station, Bond Street, the plan ultimately got kiboshed!

Harry on the downslide By the late Twenties Selfridge & Co was at the top of its game, the name was synonym with quality merchandise and Selfridge took its place as a stellar institution on the London commercial scene. Some time after the onset of the Great Depression things started to turn badly pear-shaped for Selfridge, as for businessmen as a whole. Harry Selfridge contributed to his own decline however by persisting in his flamboyantly extravagant spending. He squandered money on his womanising ways for which he earned a certain notoriety, for instance, $4M was wasted on his dalliances and affairs such as with the Dolly Sisters (Hungarian jazz dancers) – a part of his story that the TV series was quick to focus on) [Forbes, loc.cit.. By 1940 the company owed £250,000 in taxes and Selfridge was deep in debt to the bank, forcing him to sell out and retire from the business (retaining a modest annual consultancy stipend) [‘Harry Gordon Selfridge’, Wikipedia, op.cit.; Milwaukee Sentinel, op.cit]

Selfridges’ Birmingham Bullring store ▼Selfridges post H.G.S. Selfridge & Co’s reversal of fortunes signalled a move from its circling competitors…rival department chain John Lewis & Partners acquired some of Selfridges’ provincial stores in the Forties, which was a preliminary move to John Lewis’ eventual takeover of the flagship Oxford Street store (1951). In turn John Lewis was itself acquired by the Sears Group in 1965. Its current owners, the Anglo-Canadian Galen Weston company bought Selfridges in 2003 for a reported £598M. Today the store name ‘Selfridges’ survives on the Oxford Street building, and in the three other regional branches in the counties (Trafford Centre and Exchange Square, both in Manchester, and the Bullring in Birmingham).

FN: Harry Selfridge from when he first arrived was perceived widely as a Trans-Atlantic “blow-in”, splashing his (and his wife’s) money around, vociferously determined to show the established home-grown retailers what a ‘superior’ type of modern department store looked like. Selfridge displayed a talent for polarising opinion…to his dazzled admirers he was “the Earl of Oxford Street”, the flashy Midwest American merchant was “as much a part of the sights as Big Ben” (as one columnist waxed lyrically), but to his detractors (including many of his competitors and much of the London press) he was merely a “vulgar American tradesman” or worse [Milwaukee Sentinel, loc.cit ; Woodhead, op.cit.].

PostScript: ‘Selfridges gets Sixties hip In 1966, Selfridges, by now under Sears Holdings boss Charles Clore, recognised the youth market with a separate outlet for young women, Miss Selfridge (forming a link back to Harry Selfridge’s traditional focus on female customers). The new store in Duke Street signalled Selfridges’ wholesale embrace of the Sixties’ fashion revolution. Miss Selfridge used mannequins based on the straight line form of 1960s iconic model Twiggy and sold the latest in Mary Quant and Pierre Cardin fashions. In the early 2000s Miss Selfridge was acquired by the Arcadia Group [‘Selfridges 7 things’, op.cit.].

“The Queen of Time” AKA Ship of Commerce Statue ▼ ~~⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎~~

✱ described as “Downton Abbey with tills” [” ‘Mr Selfridge’: It’s ‘Downton Abbey’ with tills…”, The Telegraph, (Daphne Lockyer), 15-Dec-2012, www.telegraph.co.uk] ☯ the impressive Selfridge facade, personifying power and permanence, was later complimented by the addition of a decorative Art-Deco motif – the ‘Queen of Time riding her Ship of Commerce’ (clock-statue by Gilbert Bayes) ✜ around 12,000 visited the store to view the displayed history making French monoplane…no doubt plenty of these visitors also made spontaneous purchases while they were in Selfridge’s premises [Forbes, op.cit.] ⊟ Selfridge possibly was quite consciously also trying to make his front-line staff as unlike Harrods’ staff – who had a reputation for ‘snootiness’ and stiff formality – as he could! [Milwaukee Sentinel, loc.cit] ✧ recently the roof was again used in idiosyncratic fashion, by being turned into a “boat lake” and a “putt-putt” mini-golf course for customers ❅ in return, when protesting suffragettes smashed shops windows in Oxford Street, Selfridge’s was one of the few left unscathed ✥ other (very famous) attributed ‘Selfridgeisms’ are “the customer is always right” and “only xx shopping days till Christmas”

Harrods: Haunt of the Self-consciously Posh, the Shopaholic and the Curious in Search of a Luxury Fix

Posted by E Curb Nottus on October 20, 2018

Tags: Charles Digby Harrod, Charles Henry Harrod, Christian the lion cub, Endangered Species Act 1976, Great Exhibition of 1851, Harrods, Harrods Buenos Aires, Knightsbridge SW3, Mohamed Al Fayed, Pet Kingdom/Harrods, Qatar Holdings, Richard Burbridge, Tiara Triangle

If you mention the name Harrods today to any self-respecting ‘shopaholic’, don’t be surprised to see them salivate at the prospect of exploring a shoppers’ paradise which boasts 330 different outlets – names such as Adidas by Stella McCartney, Armani, Christian Lacroix, Givency, Hugo Boss, Polo Ralph Lauren, R.M. Williams and Yves Saint Laurent all on the one site! It’s an appeal that has massive international traction too, visitors to London with just a minimal amount of shopping curiosity in their DNA will ink in a trip to the Knightsbridge SW3 store on their “must do” lists (even if only to pick out the least expensive souvenir gift they can find, or failing that the green and gold Harrods carrier bag!). But Harrods is more than a high street mega-store, it is an institution with staying power and expensive tastes – its intriguing backstory reaches nearly 170 years into the past to the early days of Victorian Britain.

Harrods was the brain-child of London draper Charles Henry Harrod…from the 1820s he had small drapery and grocery businesses in the East End but the salient year for the company’s future trajectory was 1849. In this year Harrod moved his business to Brompton Road (Knightsbridge), its present and ultimate location. Harrods’ mid-19th century relocation to Knightsbridge was strategic in its timing and advantageous to the company. Knightsbridge and Western London were areas just being opened up to development at the time. Most opportune, the Great Exhibition of 1851 was held in nearby Hyde Park and Henry Harrod was able to capitalise on its drawing power to increase the store’s trade. After some formative years on Brompton Road, the Harrods business bounded ahead especially after the founder’s son Charles Digby Harrod succeeded him in the 1860s. Under the energy and drive of Digby’s leadership Harrod expanded in piecemeal manner, accumulating neighbouring properties and land through astute purchases. A fire in 1883 razed Harrods to the ground, a calamity which Digby turned into an opportunity to rebuild the department store on a larger scale. Architecturally, the new Harrods was palatial in style with a terracotta tile facade decorated with cherubs and swirling Art Nouveau windows and a Baroque-style dome [‘Harrods’, (Civitatis London), www.londonbreak.com].

Control of Harrods stayed in the Harrod family until 1894✱ when Richard Burbridge took over the running of the department store. Among Burbridge’s store innovations was the introduction of the first escalator in England in 1898. The escalator caused quite a stir among patrons, shock and horror even for some perhaps…so much so that precautionary measures were taken by staff, Harrods shopmen would perch themselves at the top of the escalator ready with brandy and smelling salts at hand for any customers who found the strange and novel experience of riding on the “moving staircase” (as it was oft called in the early days) too much! [‘Harrods’, Wikipedia, http://en.m.wikipedia.org].

It was under Burbridge’s reign that Harrods’ profitability escalated⌻ and the business established its brand and retail style…high-end quality, expensive products but the best quality and value for money. And it was during this time that Harrods gained a reputation for the purveyance of goods and merchandise that was not easily obtainable elsewhere, hence the firm’s motto, Omnia Omnibus Ubique (Latin for “All things for all people, everywhere”). The other constant in the Harrods ethos and credo is service, the retailer has always prided itself on the advice and assistance given to customers, as the tag-line on Harrods’ home page seeks to stress: “Enjoy exemplary personal service and an experience that can only be found at Harrods.”

Pets are us! That penchant for providing the unusual and unexpected led Harrods to diversify into the pet supply business in 1917, but not just offering the commonplace, suburban garden-variety “moggies and mutts”. Harrods’ Pet Kingdom went for the real exotica in animals. For those exclusive customers who could afford it, Harrods acquired tigers, panthers, camels and the like. Who wanted such an exotic pet? In the main customers tended to be politicians, actors and celebrities. Noël Coward was the recipient of just such a gift, a friend purchasing an alligator for the playwright/composer/director/ actor/singer. Ronald Reagan, when running for California governor in the 1960s, contacted the store seeking a baby elephant (elephants being the symbol and mascot of the US Republican Party). Harrods’ legend has it that the staff assistant who took the call from America, replied to the future US president’s enquiry with the words, “Would that be African or Indian, sir?”✥ [‘Harrods’ pet department to shut after nearly 100 years’, (Pat Sawer), The Telegraph, 10-Jan-2014, www.telegraph.co.uk]

Pet shop boys By far the most celebrated of Harrod pet stories is that of Christian the lion cub. Spotted by two young Australian backpackers in a cage in Harrods in 1969, the three-month-old lion ended up back in the boys’ trendy Chelsea flat. A year later through the agency of actors Virginia McKenna and Bill Travers, the rapidly growing lion was repatriated to Africa and set free by wildlife conservationist George Adamson in Kenya. Most people are aware of the story as a result of the video made documenting the two backpackers’ later reunion with Christian in Kenya (see also Footnote).

The extraordinary state of affairs that created Harrod’s zoo of wild animals could not last for ever. The passing of the Endangered Species Act in 1976 signified the end of this trade. After that, Harrods’ Pet Kingdom had to satisfy itself with selling more conventional household pets, cats, dogs, hamsters, guinea pigs and the like. In 2014 Harrods’ management pulled the plug altogether on the pet shop, the space was given over to an expansion of the store’s womenswear department [Sawer].

Harrods of Manchester and Buenos Aires After WWI Harrods entered an expansion period, acquiring other smaller retail outlets, most notably Kendals in (Deansgate) Manchester. After the takeover the name was changed to Harrods Manchester, but this met with strong disapproval from Mancunians, both staff and customers, and the name reverted to Kendals Milne in the 1920s [‘Kendals name dropped forever’, (David Ottewell), Manchester Evening News, 28-Oct-2005,www.manchestereveningnews.co.uk. Harrods no longer own Kendals, in 1958 ownership passed to department chain House of Fraser, and as of 2018, is owned by Sports Direct. Before the venture in Manchester, Harrods opened its one and only overseas outlet in Buenos Aires (1914). The Downtown BA store stayed in Harrods’ hands only until 1922 when it was bought by Argentinian retailers. Harrods Buenos Aires continues to operate independently under that name but a legal injunction prevents it from using the name ‘Harrods’ outside of Argentina [‘Harrods Buenos Aires’, Wikipedia, http://en.m.wikipedia.org].

Ownership passes offshore As the 20th century progressed, Harrods’ rising prestige and continued growth made it a desirable retail takeover target (despite a terrorist attack by the IRA outside the store in 1983 which killed six bystanders). In 1985 Egyptian shipping magnate Mohamed Al Fayed and his brothers gained control of the House of Fraser group which included Harrods (at a cost of £615M). Under Fayed Harrods’ growth proceeded and added his own personal touches to the store, nothing more personifies that than the (some would say) garishly lavish and cluttered Egyptian Hall✫. An even more personal touch is Fayed’s staircase memorial to his son Dodi and (Lady) Di (replete with a bronze statue of the couple with symbolic seagull). In 2010 Fayed sold Harrods to another foreign concern, Qatar Holdings (ie, the Qatari Royal family) for £1.5bn, citing as his reason ‘frustrations’ over government delays re a Harrods “pension scheme” [Mohamed Al Fayed reveals why he sold Harrods’, (Andy Bloxham), The Telegraph, 27-May-2010, www.telegraph.co.uk].

The Harrods dress code In 1989 Harrods introduced a dress code to the store (in Harrodspeak its called “Visitors’ guidelines”). The code specifies that the following are not permitted within the store – beachwear, Bermuda shorts, ripped jeans, bare mid-rifts or revealing clothing, uniforms of any description, thongs or flip-flops, cycling gear✦. In addition no visible tattoos are allowed, nor are clothing which have lettering with “objectionable language or design” (not exactly a formula to maximise Harrod’s sales potential with Gen-X’ers and Gen-Y’ers!). Backpacks must be carried in front of visitors, not worn on the shoulders⋇. Harrods a beacon of good deportment and presentation seeking to keep out the “riff-raff”? Wanting its patrons to all look like posh, debonair types? Snobbish elitism aside, management’s decision was arguably a rational response (albeit with a degree of overkill!) to the views expressed by Harrods’ core clientele (traditionally 60 per cent of Harrods customers live within three miles of the shop in the so-called Tiara Triangle of affluent Knightsbridge and Kensington). Harrods’ feedback from local clients, its rich ‘sophisticates’, was that they were increasingly unhappy shopping side-by-side with people who were dressed scruffily or in bad taste [‘Don’t come as you are: There is only Harrods dress code’, (Louise Levene), The Independent, 18-Jul-1994, www.independent.co.uk]. The Chinese are coming By 2017 the basis of Harrods’ profitability had shifted – internationally. The firm’s efforts in courting the growing Chinese Middle class over the previous decade had paid off (managing director Michael Ward has been making four trips a year to China over that period to develop the budding relationship). Chinese shoppers, with their focus firmly on high-end fashion and accessories, were now outspending British ones in this most English of department stores, Ward disclosed that the Chinese made more than £200M worth of purchases at Harrods in 2016 [‘Chinese customers heralded as Harrods’ biggest spenders’, (Bo Leung), China Daily, 28-Nov-2017, www.chinadaily.com.cn].

Safe in Harrods’ hands A less well-known service that Harrods has provided for over 120 years is located at basement level in the store. Since 1897 the mega-rich of different nationalities (foreign royals, VIPs, movie stars, etc) have entrusted Harrods with their money and their assets – works of art, antiques, collectibles and other valuables. These are held in secure safe deposit boxes and strong rooms within the Harrods building [‘What You Don’t Know About Harrods (But the Rich and Famous Do)’, (Michael Levin), Huffington Post, 22-Feb-2017, www.huffingtonpost.com].

Harrods as you see it today in 2018 is five million square feet of department store, eight levels x 330 individual departments and 5,000 staff, with additional outlets in Greater London (airport stores at Heathrow and Gatwick). As well as the Egyptian Hall, there is a Crystal Room, a large and showy Food Hall (the Arts and Crafts tilework is a standout), a Wellness Clinic, 28 separate dining and drinking establishments, interior decorators, a travel shop, Waterstone’s book shop et al, Bespoke tailoring, a Floral Couturier, a Toy Concierge (who will help you source out the world’s most expensive toys – of course!) and much, much more.

PostScript: A skeleton in the merchant’s cupboard One aspect of the Harrods story that doesn’t get a mention whenever Harrods promotes its long tradition of luxury merchandising and commodity versatility, concerns a dark chapter in the founder’s early career. In 1836 (when the business was still at Cable Street, Whitechapel) Charles Henry Harrod was convicted of receiving stolen goods (and of trying to bribe a policeman) and sentenced to transportation to Van Dieman’s Land (Tasmania) for seven years. Fortunately for Harrod, the court defence presented by his lawyer and a raft of supporting character references got the grocer’s sentence commuted to one year in Millbank Prison. Had Harrod been transported to the Tasmanian penal colony, the illustrious retail history of Harrods would never have come to fruition [(Robin Harrod) ‘A brief history of Harrods’, BBC History Magazine, 23-Mar-2017, www.historyextra.com].

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