Category Archives: Business history

Farewell Lloyds Bank.

I am the stupid type of person who maintains loyalty in the face of indifference. For over 30 years I have banked with Lloyds and, in that time, have seen over £13,000,000 go through my various accounts. The measure of my stupidity can be judged by various incidents which have occurred. The first was the manager who did a deal with a liquidator to close a company of which I was a shareholder. We wanted to close the company. We owed £750,000 and had assets of 800,000. After the liquidator mismanaged the affair, there was just over £100,000 left to settle with the creditors. Surprisingly, the fee the liquidator awarded himself was just over £100,000 and so there was no money for the creditors. And still I persisted.

When I offered Lloyds £500,000 in assets against loan of £200,000 for a building project the computer said no. In mitigation I would say that it was 2009 and they probably didn’t have any money to lend,  and so I stayed.

Move on to 2017 and a call to them to enquire about an account for a small company I own. After 20 minutes waiting on phone I gave up. I tried again. This time the call was answered after 12 minutes but I needed to be transferred twice so it took almost 30 minutes before I was finally connected to the right person, who then told me that, because I was on a speaker phone, they couldn’t speak to me.

On the recommendation of my accountant I called a different bank, a comparative newcomer to the UK. The call was answered in just over 1 minute. I was immediately given the details of my closest branch with name and phone number. I called him, immediately was answered, and arranged an appointment. This is looking good and I will report further when I meet him next week.

And did I mention NatWest? My little company banked with them handling a £ and a € account. What they didn’t tell me was that when I wanted to make a payment from the € account, I had to write a letter to them, put it in the post and wait for them to act on it. Just like it was in the 1970’s!

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End of the year oil

We close 2014 with a very big question mark. What is happening to the price of oil? Fuel has a huge impact on transport costs and the fall in price we have seen over the past month is already reducing pump prices. Where will it end? Two weeks ago “experts” were predicting prices of $75 per barrel yet already it is at $60 and media speculation indicates that prices could go much lower. In any market change there are winners and losers. In the short term costs for the logistics industry will be lower and market forces will ensure that these lower costs are passed on to the customers.

The potential is that this will stimulate the European economy and move us into growth again. The alternative scenario is that it is a harbinger of a further contraction. Meanwhile climate change issues mean that, what ever the price, burning oil will ultimately be consigned to the dustbin of history, much as coal fired steam trains have been. When this finally happens depends on many things but for now, with lower prices, the impetus for change has moved from partly economic to purely environmental.

Amazon

Yesterday I was planning a campaign agains Amazon “Amazon, but only if you really need to”.  My basic premiss is that the company is destroying the economy by closing shops which pay taxes in favour of not paying taxes.  I could add that in addition it is replacing interesting, human contact jobs with Zombie jobs which, in any case will son be replaced by further unstoppable automation. No bad thing, you might say, freeing up people for more leisure time except that in this context, leisure time is synonymous with poverty. But I, as usual, digress. Today I am not planning that campaign since an article in todays Guardian in the UK indicates that Amazon’s place at the top of  selling tree, will soon be over.

My immediate reaction, stupid to admit, is one of sympathy. As soon as the transition from superpower to underdog occurs, I am genetically programmed to feel sorry at this reversal of fortune. And it seems I am not alone. Brits all have the same gene, love of the underdog!

So hopefully Jeff Bezos, Wladimir Putin, Nuri al-Maliki and all the others can sleep easier knowing that I feel for them. Remember, when you’re up, there is only one way to go!

My Biggest Deal

In 1999 I was working as a freelance salesman for a Taiwanese company with a factory in China. The factory had been a new start up for finished goods created by a company with a long history of producing textiles.

In my search for business I read all the relevant trade magazines (mostly sports related) and in one of these came upon a new start up, Kooga Rugby, based in the capital of UK Sports, Manchester.

Though lived in the south, I had no problem in driving north and meeting one of the directors. We got on well and soon I had them as a customer. With them I developed the then brand new helmet for Rugby and it was the sight of this on the field really launched the brand into the comparative, big time.

The business and the friendship continued and as part of their development they were able to raise finance from the venture capital company 3i’s. Part of the deal was the they would have the power to appoint a chairman, which they did. I met him a few times and talked to the founders and from this concluded that the chairman was going to take the business over, cutting the founders out.

I can’t be certain how I arrived at this conclusion. Though I have had a lot of experience of people I don’t think I possess any special powers but actually the founding directors agreed with me. What to do?

Of course the business was short of money and needed further capital but clearly this would not come from 3i’s who had just announced that their minimum investment would be £5,000,000 and not the £3,000,000 that had from 3i’s.

With this knowledge I approached a contact I had in corporate restructuring and formulated a plan to put the company into receivership and buy it from the receiver. I calculated that the deal could be made for £500,000 and set out to raise the money.

The richest person I knew was the boss of the Taiwanese company I was working for so I set out to meet him and propose a deal. The initial mistake I made was to brief him by email. He wan’t interested but didn’t say so. I flew to China but was told he had just left for Taipei. I flew to Taipei only to be told he was in Tainan. So I took a plane again, caught up with him and told him that we should buy Kooga, that I would put in £200,000 and that he should put in £300,000. After a few questions, he agreed and with the finance in place I moved the plan forward.

Reporting back to my soon to be partners in Kooga, it became their job to put the company into receivership, using my contacts as the people to do it. Not unnaturally, the Chairman was all in favour, figuring that he could get his corporate restructuring people in place and that then he could manoeuvre to get control. However, they resisted his efforts at persuasion, stuck with me and the rest as they say “is history”

I will tell the rest of this story, which is still unfolding, at a later date. Questions for clarification are welcome.Image