Good Buying or Goodbye

I've already posted about one firm that went bust because of bad buying decisions, now I want to tell you another story about my time working in retail.
I was working as manager of a large bookstore in Northampton in the late 1980s. The store was set up by the Goldsteins when they were directors of Kingfisher Plc. They d sold Superdrug to Kingfisher a few years before and wanted to try something new. Volume One Bookshops was a new concept in retailing and a complete change from the "libraries with tills" look that characterised bookselling at that time.
Our shops were bright, had acres of space to display books with the covers out rather than spine-on, and sold videos as well. Sell-through video was a very recent concept. Up until that time videos were rental only. No-one foresaw the potential, or that legions of Dr Who or Startrek fans would buy every episode of their favourite shows to watch at home over and over again.

Volume One were one of the first to sell videos alongside books and in time the business grew so that half our turnover came fom selling VHS cassettes. We ordered our stock from a wholesaler called Parkfield. They were the main wholesaler in the UK. We could ring our order in on a Monday and it would be delivered the next day. This meant that we could keep our stockholding to a minimum and reduce our exposure to bad purchases clogging up the shelves.

Sell through video was like pop music with a very short shelf life. A film would be released on a Monday, sell for a week or two and never sell another copy. It made sound economic sense to keep our stocks at a minimum, although the margins were lower than if we had bought direct from the publisher. Using a wholesaler made such good economic sense. The wholesaler held the stocks and we could replace our sales within a couple of days. Constant stock-turn more than compensated for the lower margins. This was good buying.
We started having problems with our video supplier soon after we read in the press how they planned to become the largest video wholesaler in Europe. Each delivery would have lines missing. This went on for week after week. I found out that the firm were taking in so much stock for the Christmas rush that the staff didn't have time to pick the orders going out to the customers. The problem of short deliveries got so bad that we had to change suppliers. Needless to say the video distribution company went bust soon after, having filled numerous warehouses with stock that they couldn't dispatch to their customers.
The firm failed because of bad buying.
We used a couple of wholesalers for buying books. One of them was a small family firm on the South coast. Nothing was too much trouble. You could get in your car and pay them a visit, walk around the warehouse and choose some stock which was then scanned, an invoice/delivery note printed there and then, and the books packed into a box which you could either take away or have delivered the next day.
Our other supplier had a huge brand new state of the art warehouse, and a computer system that was unable to update fast enough to keep up with the business. Every book had a bar code, yet the warehouse lacked bar code readers to input the stocks, which had to be input manually. The stock levels were only updated each evening, so they never knew what stocks they had. The computer said one figure, but the reality was always different. We d place an order and their computer system was unable to distinguish whether the books were on the shelves ready to be picked, in the loading bay ready to be unpacked, or already picked and waiting to go to a customer. Once again we were faced with unacceptable shortages in our deliveries and we switched supplier. They went bust soon afterwards. They had no control over their stock.

Bad information equals bad buying.
Bad buying equals goodbye.

A few years ago I worked in a warehouse that supplied tenpin bowling equipment to the various bowling complexes in the UK. If you bowl regularly you will soon buy your own ball.
The technology of bowling balls is very complex.The normal ball you use when you go bowling for fun is a far cry from the highly complex balls that are used by the serious players. Everything from the shape of the core (the middle of the ball) to the type of material that covers the ball will have an effect on how it moves down the lane. Serious bowlers buy their ball from the bowling pro in the same way that the golfer buys from the golf shop at his course. When you buy a bowling ball it comes without holes. The pro will measure your hand and will cut the holes so that it fits you exactly. You can choose the weight of the ball. Years ago the serious players would use a heavy 16lb ball in order to get the swerve and power to score consistently high. As the technology developed and the players got older they found that they could get the same power and control with a 15lb ball. To all extents and purposes the 16lb ball was obsolete. My friend and work colleague was responsible for ordering the stocks of balls and although he knew as well as everyone else in the industry that 16lb balls were obsolete, he would still order "a few" each time.
Every time a new ball was introduced we would sell out of 14 and 15lb balls, leaving the 16lb balls unsold. Eventually we had a warehouse full of 16lb balls that no-one wanted. We ended up giving them away,although it might have been better to send them to landfill.
The company is no more. Bad buying contributed to their downfall.

Money money money

My last post about being mugged on the way to the bank reminded me of the time that I was involved in a bank raid. I don't think I mentioned this before, but it was when I worked at the Westminster bank in about 1968. We were having new strongroom doors fitted in the basement, and being the most junior male staff member I was assigned to watch over the workmen as they drilled and hammered away.
One Monday morning at about 10.30 I was in the basement when I heard a commotion from upstairs in the banking hall. A few seconds later one of the bank clerks rushed downstairs looking a bit scared. He had an imprint of a size ten shoe on the side of his face.
I should point out that we had no security screensin front of the tills. The powers that be thought that they were an unnecessary barrier between the bank and the customer. Well, several robbers thought that a four foot high counter was no barrier to them helping themselves so they ran in, spraying ammonia everywhere. Ammonia was the bank robber's weapon of choice. It was easy to get hold of from your hardware store. You used a squeezy washing up bottle and sprayed it into people's faces, causing minimal damage as long as the victim was able to wash the ammonia out of their eyes. What it did was immobilise the bank clerks while they scooped the cash.
Anyway, one of the cashiers had seen them come in and was turning away as the thief jumped the counter, catching him with his foot. By the time he got downstairs and we knew what was happening it was all over.
That didn't stop me almost wetting myself with fear. What if they'd heard that the strongroom was open and they were coming down the stairs? We all hid where we could. It was a bit like that scene in The Life of Brian, where the Roman soldiers search the place and can't find the rebels, even though you can clearly see them behind the curtains and under the table.
After a few minutes we ventured out and upstairs. The bank had been cleared and the doors closed. The police were there within minutes- yes minutes, no more than five.
Someone from head office came and made us a cup of tea and went there, there. No-one was seriously hurt. A few people were splashed with ammonia and had stinging eyes. One of my colleagues saw what was happening and his mouth fell open, in time to catch a mouthful of ammonia. He burped for the rest of the day.
We were all sent home after lunch. The contractors came in the next day and fitted security screens. Then it was business as usual. The robbers were caught before they had a chance to dispose of the money. No CCTV, no DNA database, just good policing.


Down the years I had to handle a lot of money. Some firms used security vans to collect the takings while other firms left it to the manager to bank the cash.
I used to smile at the advice given by head office. It was all about varying the time and the route you took to the bank. However, there was one flaw. Whether I left the shop by the front door or the back, whether I took the long route or the short cut, I still ended up at the front door of the bank. Anyone wishing to jump me only had to wait there.....


After I'd been mugged in Corby the company arranged for a security firm to collect the takings each day. I still had to go and get the change from the bank, but if anyone fancied their chances at grabbing two bags of coin and outrunning me while carrying it, I'd have said, go on, make my day.


By the late eighties and early nineties I was working in a bookshop where the average sale was £5 rather than the £1 or so in a drugstore. We were taking more and more credit card payments and we'd installed EPOS and credit card terminals. However, half of our takings were still in cash, and one of the stores I managed had an annual turnover in excess of £1m. In the run-up to Christmas the turnover would increase by 50% each week, then double each week, until we took more than a week's takings each day. The week before Christmas' takings amounted to 10% of the total turnover for that year.
My day revolved around counting money. We opened the shop at nine, and empty the tills every hour or so. At about eleven my chief cashier and I would start counting the money that we'd taken from the tills. As soon as we'd finished counting, we'd go and get some more, and so on,
By Christmas Eve I was sick of the sight of money. My hands hurt to hold the notes and my fingers ached from counting them. It was not uncommon to count £15,000 in used fivers and tenners in the course of a busy day.
That store is no more. I doubt whether the firms that took over the business ever approached the levels of turnover that we achieved. The end of the Net Book Agreement and the stupidity of selling a premium product at a loss put paid to that.

That sinking feeling

It's 1988. We moved back from Somerset the year before and we've just moved house again. Sue had bought a house in Kettering so that we had somewhere to live while we sorted ourselves out. It was a nice mid terraced house overlooking a park and we paid £34,000 for it, having sold our house in Shepton Mallet for £37,000. House prices were rising fast and we decided to move while we could, so, one year after we bought our home, we sold it for £46,000 and bought another one on the outskirts of the town. It was slighly larger and had a garage. We paid £48,000 for it.
It's worth noting that our house earned more in that year than I did. I was on about £11,000 as I recall.
As well as moving house, I was in line for the new store in Corby that was due to open later that year. The company still had plans to continue expanding and had a brand new state of the art distribution centre in Southampton. It was then that we began to hear rumours that the company was up for sale. The rumours were confirmed. Everything went on hold and I had to continue commuting to St Ives.
Then the news came through that the company had been bought by Superdrug.


Oh joy.

There were a few ex-Superdrug managers working for Share and none of us felt secure. We were called to a meeting to meet the new owners and I came face to face with my nemesis who by now had been promoted from Area Manager to Regional Director. I recognised a few of the Area Managers as well. Superdrug only appointed from within so they'd been managers when I was kicking my heels as an assistant manager.


After that meeting which seemed to go OK (there were no promises made that we would automatically keep our jobs) I recived a letter stating what I could expect if I decided to accept redundancy. It wasn't a lot and I'd just moved into a new more expensive house. I agonised over this for a week or two and finally and reluctantly accepted the new contract from Superdrug.
Share had already appointed a new manager for St Ives, so I was once again a spare manager. I went around the various local stores to re-acquaint myself with the systems, which hadn't changed much, only evolved and then I heard that Superdrug had taken over the lease that Share had signed on the new store at Corby, so I applied for the position and was given the OK.


Once again I was recruiting, and training staff, fitting out and stocking the store. The store opened and we started trading. I can only remember a few things about it.
One was the silly lift from the warehouse to the shop floor. It was only about 3 feet high and just big enough for one stock trolley.
Then there was the steady stream of toerags who had nothing better to do than to stand outside taunting me. They were all barred from entering, but that didn't seem to stop them. They thought it was a game. They'd intimidate the younger staff and openly shoplift unless I stood in front of them. I wish I'd had a cattle prod.
The next was the staff's accents. Although Corby is less than ten miles from Kettering, the people speak with an entirely different accent, a strange almost scottish accent. This derives from the huge influx of Scottish and Irish families to work at the steelworks in the 1930s, when the population increased from 1500 to 15,000 in a little over eighteen months.
Finally there was my chief cashier. She lived on one of the more notorious estates. She knew everyone who came into the store. OK so far, but then she didn't turn up for work one Saturday and rang in sick. This meant that I had to cash up the tills on my own and at that time we used to take the banking to the local bank and deposit it in the night safe. We closed on time and I asked a couple of Saturday staff to wait and walk with me to the bank. As we rounded the corner I was jumped from behind by a young man who tried to grab my briefcase which looked like a security case. I fell to the floor and we had a tug of war for a second or two. I managed to kick him hard in the balls but in doing so broke my hold on the case. He ran away with my case which contained my wallet, some papers and the remains of my lunch. The night safe wallet was inside my jacket, tucked under my armpit. My glasses were broken and I was bleeding from a cut above my eye. I placed the wallet in the night safe and went to a call box, rang home and then called for an ambulance. The cheque cards were cancelled before the lad had stopped running. The police later found my briefcase in the local river and no, I didn't get it back.
I rang the area manager and he arranged to meet me early on Monday morning. When I arrived at work I looked a sight. I had a huge black eye and swollen face. We sat at the checkout to greet the staff as they came in. I kept my back to each one and turned to face them in order to gauge their reaction.
Only one person didn't register shock.
Guess who?
My chief cashier.
We suspected that she'd tipped off her boyfriend and he'd mugged me. Only there was no proof.
She put in her notice a few weeks later.
Funny that.


About nine months after the store opened I was on the move again. I was asked to take over an existing Share store in Northampton.
And I went on a training course. My first proper training course since I'd left school over twenty years before. Ah, well, it's never too late to learn.

On the move again

I worked for Superdrug and Share drugstores in the late 70s and 80s. Both businesses used the same model of having a central distribution centre where suppliers delivered, and minimal stocks in the branch. We kept accurate stock and order records (this was pre- EPOS and computers) and we ordered what we needed every week.
It meant that the companies didn't have their cash tied up in slow selling stock in the branches, which was the downfall of Lewis Meeson's.
I left Meesons after they'd been taken over by Martins and moved up the High Street to Share Drug Store, a company in the same mould as Superdrug. It was a brand new shop, and I was sent to another store for training while the builders fitted the store out. I enjoyed working there, it was a much better atmosphere than Superdrug, and they were expanding.
We'd been living in Somerset for about three years. I loved our house but the towns were all a bit small for an ambitious retail manager. After a succesful Christmas I was ready for a change.
Share had about 140 stores, mostly in the southern counties, with a distribution centre in Southampton. One day I was looking at the list of branches when I noticed thatthey were proposing to open a branch in St Ives. It was a few weeks after we'd been to Cornwall on holiday, and we'd spoken about the possibility of moving down there. In the end we decided against it, because of the lack of alternative employment should the job not work out.
Suddenly the company was opening a branch in St Ives. I looked long and hard and then realised that it was St Ives in Cambridgeshire!
We'd lived in deepest Somerset for three years, and the locals were only just acknowledging our presence. I'd always treated the move as temporary, and we'd visited every tourist attraction within 30 miles, so I was ready to return to the Midlands.
I talked it over with my wife and we agreed that I should apply for the post. I heard back within a few days. I'd been successful. All I had to do was train my successor and I could move up in time to recruit the staff and fit the store out. However, the company would not be paying my relocation costs.
We put our house on the market. We'd been there for three years and had turned a very run-down property that lacked a kitchen or central heating into a nice comfortable end of terrace home with a very large garden, not overlooked, on the edge of town and with views out over the Mendips. We'd paid £22k for it 9in 1984) and sold it for £37.5k in 1987.
However, it still wasn't enough to buy a house anywhere near Cambridge. St Ives was about ten miles from Cambridge and the most we could afford there was a tiny two bedroom quadrant home. We decided to move to Kettering and I would commute, although the A604 wasn't the best road to travel on.
I moved up to stay with Sue's relatives and began the job of getting St Ives store open. She rang me one day to say that someone had agreed to buy the house. I said that she should get in her car and come up and buy us a house in Kettering.
So she did. She put Chris in the child's seat, sent Jayne to school and drove the 150 or so miles to Kettering. She walked into an Estate Agent just as a couple were placing their house on the market. She had a look around and did the deal there and then. She then drove back home and told me what she'd done when I rang her later that night.

Sue packed everything and arranged the move while I worked to get the store open. She moved on the day I opened the store. We had to stay in her parent's spare bedroom that night, as we couldn't get the keys until the following morning.


St Ives was a succesful store that made money right from the start. We had a good team of staff and we all got on well. It was a bind travelling 35 miles each way each day, with only the last few miles on dual carriageway. I began to look around for somewhere a little closer to home.
As luck would have it, the company had signed a lease on a shop unit in Corby, just down the road. I was all set to transfer there when the news came through that the owner of the company had put it up for sale- and the new owners were- Superdrug.


Four years on and I had come full circle. I was going to be working for Superdrug again.
Oh bliss. Not.

Psychometric testing

I'm no fan of psychometric profiling. In my experience it's only used in firms where the management are remote from the workforce. Rather than interview the staff themselves, they employ intermediaries called Personnel, or the even more arcane and forbidding Human Resources.
When I worked for Superdrug and Volume One a few years later, I was interviewed by the Managing Director and he employed me on the basis of that interview lasting half an hour or so.
Recruiting staff is like weather forecasting. No matter how sophisticated or expensive the methods used, the results are statistically no more accurate than pine cones or seaweed.
In my long career I've interviewed a lot of potential employees, and attended a good few interviews as well. There's an old saying- "First impressions last", and psychometric profiling is a poor substitute for a face to face interview. When a vacancy occured in one of my shops I interviewed the applicants with an eye to what the job entailed and how they would fit in with the team I'd assembled.  When I was in retail the staff turnover averaged about eighteen months, that is, you'd have a new member of staff in every position every eighteen months or so. This meant that the manager would be forever recruiting and training staff, knowing full well that they'd only stay for a month or two. This often meant that he spent less time training his staff and that brought even more problems. So the answer lay in keeping your staff for as long as possible. In my experience profiling was no more effective in achieving this, and cost a whole lot more.
For the record, my last management position was as manager of a bookstore in Northampton. I was there for five years and when I was made redundant by the incoming owners, more than 90% of the full and part time staff had been with me from the start. That was way, way, way above the industry average. My record of recruiting and training and retention of staff speaks for itself.


The first time I encountered profiling was when I was interviewed for a management position with Lewis Meeson, a subsidiary company of Barker & Dobson, maker of Everton Mints. I was working at Superdrug and anxious to get out. I'd been there too long and my reputation meant that my career was stalled. I'd just got married again and we were happy to move almost anywhere in the country in pursuit of my retail career.
I saw the advert in the Grocer and applied and in due course went for an interview. I passed that initial interview and received a profile test in the post. The test involved answering a load of stupid questions, most of them variations on the same theme. I had to fill  it in and return it before my next interview with the Managing Director at head office in Liverpool. I can't remember everything the profile was supposed to reveal about me, but they went ahead and hired me anyway.
The salient point was that the profile test was as an adjunct to the two face to face interviews I undertook. The face to face interviews took precedent, and the profile was just background.


Fast forward twenty years and I'm working as a temp in a call centre. A good temp has to be able to walk into any job and pick it up straight away. I'd done a lot of call centre work, both inbound and outbound. I prefer inbound, where you respond to calls from customers.
This call centre was run by a large photo copier manufacturer and distributor. Everyone has used a photocopier at some time, but my recent jobs hadn't involved any contact with them. All of a sudden I was answering calls from customers whose copiers had packed up. I'd identify the customer and the machine using the AS400 software on the computer in front of me, and I'd try and find out what the fault was. Some faults can be cleared over the phone. I had diagrams and photos of the various models on the computer, and together with the customer we'd try and find the fault. We had a couple of skilled engineers that we could refer the difficult calls to, and if all else failed we'd get an engineer out to them. The object was to keep their copier working, although that wasn't always possible if some burley policeman had broken the glass while trying to photocopy his private parts (It happened more than once).
After a week or so I was approached by the call center manager who had been listening in on my calls and monitored my success rate. He wanted to know if I wanted a permanent job.
I was temping because there were no permanent jobs around, so I said yes. As part of the interview process I was given a psychometric test to complete.
One look at the form and I despaired. It was more psychobabble and arcane nonsense devised by people who don't like dealing with people face to face. I completed it and handed it in.
Up until that moment my joining the firm was cut and dried. I was good at the job, good with customers, good telephone manner, good clear up rate.
The call centre manager never mentioned my joining the firm again. I stayed as a temp for another couple of months. Other people, less able joined the permanent staff while I continued as a temp, so why did I not get the job?
The answer had to be the profiling. The company, a huge Japanese multi-national had several sites in the UK, with a head office in Feltham. The Human Resources department were based there. I never ever saw anyone from that department at our site. They had worked out the requirements for the job and devised a profile. My form arrived on their desk and it didn't match their profile, so no job for me.

In time I came to realise the short-sightedness of profiling.
If a company only recruits staff according to profiles, it means that there is no possible career path, no opportunities for promotion in that company. It is impossible for someone to join the company at the ground level and work their way up. Their profile wouldn't match the junior jobs if they were executive material, and individual job profiling would prevent them advancing through the company.
If every company adopted profiling it would mean that your job was assigned to you when you entered the job market and all you could expect was to do the same job in different offices for the rest of your working life.
That's my idea of hell.


And all those heroes of business who started at the bottom and worked their way up? Forget it. It would never happen. Profiling will squeeze every ounce of creativity and originality out of a company. In time companies that employ profiling will not have the talent to adapt, to be original, to spot new ideas and opportunities and will ultimately fail.
Good.

Good buying

I worked in retail for about twenty years and I learned that good buying is much more important than good selling.
I moved to Somerset in the mid 1980s to open and manage a 3000 sq ft CTN (Confectionary, tobacco, news) in Wells. I was responsible for most of the buying, with the exception of the promotional items. The company used a separate firm to negotiate deals and import goods from the Far East.
Less than eighteen months after joining the company the buyers had destroyed the company, one that had  a history going back over 100 years.
Some examples.
Easter Eggs. The company decided to take on Tesco and Woolworths and sell Easter Eggs at silly prices. Bear in mind that most of the shops were small newsagents less than 1000 sq feet, that is, a fraction of the size of an average supermarket, with a correspondingly smaller number of customers, no advertising budget and tiny windows to display your goodies.
Not looking hopeful is it?
The company were persuaded that it was a good idea and we went ahead. We received deliveries of eggs that filled every nook and carnny of the store. We pile the eggs high and sold them cheap. Come Easter Monday we'd sold thousands at great expense of energy and stress. However, we still had thousands left over, so we had to reduce them in price still further in order to clear them.
Then we sat down and worked out how much profit we'd made by selling all those eggs at give away prices.
None. Nothing. Zilch.


Then  there was the toys and fancy goods. Every month I'd drive up the country to a presentation where the buyers would show us what they'd bought for us. They made a great play of how much margin these goods would produce. (assuming that we could sell them).
Then the goods would arrive. Lorry loads. Every shop had more stock than it could display. Each month we'd remove all the unsold items from the previous month's special promotion and put them in the stockroom along with all the other unsold items. Each month we'd get more stock and the backrooms would be bulging with unsold goods.
The ultimate insult came in 1985, when the buyers decided that we should be selling Acorn Electron computers. Just the hardware. There was no software available. I received ten of these misbegotten follies to sell and set one up on the counter. Remember that this was a W H Smith type of outlet. We sold newspapers and magazines, greetings cards, tobacco and confectionery and some toys and gifts. We also sold records and cassettes and outsold the Woolworths next door.  Wells is a tiny city of about 5000. There is a tourist season but the winters are very quiet. And I had to sell computers without software and without any training. I'd never seen a computer let alone operate one.
I went without saying that the company's financial situation became dire. We were on stop with all our suppliers,and had to pay cash on delivery for cigarettes. The margin on cigarettes is tiny, less than 5%, so it was clear that we couldn't survive.
And we didn't. We were taken over by Martins, part of the Guiness empire at that time.
I hated working for them. In some respects they were worse than the other shower. But at least they had their buyers under control.


I learned that potential profit margins are only potential. Until the cash in in the till, the product is either a liability or an asset. Good buys are an asset, bad buys are a liability.


I left the company in 1986 after about two years. The new management treated us like criminals. It wasn't the fault of the store managers that the buyers were out of control, but we got the blame. I kept a tight control of the items that I was responsible for buying. I kept waste to a minimum and kept a close eye on the shrinkage. I sacked one member of staff for underringing on the tills and that dissuaded the others from trying it on.
What did it for me was when the chief executive of Guiness awarded himself a 10% rise. The Martins staff got 5% and those of us who'd been taken over after our firm had gone bust had to be content with 2%.
It was time for a change again.