Part 7: The Good Old Days…

1974 - Matthew James is now located at Upton Lane and sales, clients, product ranges, and depth of stock were growing all the time. There had never been any capital introduced into the business. It was growing thanks to the increasing credit limits from an expanding number of suppliers, and tight control over the credit extended to customers. The ever increasing “stock base” however made for a constant juggling act regarding who to pay on time and who to keep waiting. At one stage we had a “stock loan” arrangement with a company in Birmingham called “Siddiqui” but I thought I needed capital. The problem was how to get capital without losing shares, and thus control.

However I was introduced to a lady called Penny Jolly - a financial consultant - who suggested “Bills of Exchange”. I had never heard of these, but she explained these were what top “Blue Chip” companies used all the time. In a way they seemed very old fashioned - it was “my word is my bond” and basically you could have as much credit as you want, but you MUST PAY on whatever day you had agreed.

For the supplier the deal was also great because they received payment from the Bill of Exchange holder on the day it was issued - so we would be transformed into CASH CUSTOMERS - perfect!

The interest charges were largely offset by settlement discount.

Normally a supplier would offer “End of Month following delivery” so an average of 45 days credit. Our cashflow would be transformed if we could have 90 days fixed. The only problem was that to get this “trusted status” could take forever, building up from a low amount over many years.

However, Penny had a solution for this, which we managed to sell to our key suppliers Braun, Moulinex, & Philips.

We would have a nominal amount of “Bills” in our sole name to “prove ourselves, but unlimited amounts where the Bills were countersigned by the supplier.

So if for example we purchased ￡20,000 of Philips small appliances on June 1st, Philips would be paid that day the full amount - but would countersign the Bill.

In theory (and practice), this put them back “at risk” if we did not pay on time, but as they were already willing to offer the credit, and were getting cash on day one, they agreed this represented a good way to continue to trade. We would pay the “B of E” on the last day of August. The process would then repeat itself.

This B of E facility was soon up and running, and allowed us to trade on an even bigger scale.

A new larger delivery vehicle was purchased, as was Nixdorf 820 accounting machine.

We now started to import vacuum cleaners from a company called “Tornado” in France and we also “borrowed” the Tornado name and logo to put on a range of Freezers we also imported from France.

Freezers are large items and we really had run out of space, so we rented a large barn in Wisbech in Cambridgeshire to store them. We had a deal whereby in lieu of spare parts we got 5% free freezers. One dark windy night, we received a full lorry load of chest freezers and I remember a very large freezer turning itself “back into parts” by falling off the forklift truck from a great height!

This “branding” arrangement was all working well until Electrolux acquired the Tornado vacuum cleaner company and once they realized we were selling in the UK, they stopped the supply and “requested” we cease to use the name on other products.

Around this time, I started to subscribe to trade magazines from the USA and I found that trends happening there would arrive in the UK a few months later. The Rival Crock-Pot with removable stoneware insert was one item I was ready to jump on when it arrived in the UK.

Opportunistic buys were a major way of winning new customers. During power cuts we sold portable gas lanterns, (not electric, but a great seller) whereas in a hot summer, having electric fans in stock was vital. This could be quite high risk, buying container volumes of something that “if the weather changes” nobody wants, but on the whole we were quite expert at judging “when to stop” and clearing our remaining stock.

In these magazines, I also became aware of franchise chains in the USA such as Ben Franklin & Coast to Coast stores. I was intrigued (and a little jealous) of the fact the franchisor’s client shops (franchisees) could not “shop around” as my customers did, and they had to try new lines introduced by head office, even if their natural instinct would have been to give them a miss. I was blissfully unaware of what the future held for me.

You may have noticed in the last (pictorial) issue, that we now had full time representatives covering London and a telephone sales team initially at Upton Lane and then London road. Ted Toni had been in the trade for years and brought with him a loyal following of clients. Rob, Ian and Gary were new to the trade but full of enthusiasm. Rob (Bob Hawkes) was an Australian, (no relation I assume to Bob Hawke the 23rd prime minister of Australia). Gary was a real character (hi Gary if you ever read this) he was a “night person” a regular at the top London discotheques and clubs, rarely seen in the mornings!

It became so bad that one day (after many warnings) he came in late and I had to tell him - that was it - however he explained his father had died two days before, and he was trying to sort everything out - so he kept his job.

A few months later his father called to speak to him…..

The Sting

At Upton Lane we were based in what were ex shop premises - actually the premises had been a Ladbrokes betting shop before we took it over. So although we were now 95% wholesale we had an open door / trade counter and anyone could benefit from basic trade prices. So no one thought anything of it when one day in the spring of 1977, a young guy in a suit came in and enquired about a few products.

In fact he was there on a mission to “way up” how many doors (escape routes) and staff we had, and the general layout of the place.

A few days later shortly before 9am, we were getting ready for the day ahead. Actually I had a suit on that day (very rare), as I was due to visit our bank manager. At that time we banked in Faversham, Kent, with a friendly bank manager known to Ian Kyle.

Suddenly a bang on the door and what seemed like 20 guys and a couple of girls swarmed in. This was Her Majesty's Customs and Excise. No one was allowed out (or in), a guard was placed at both the front and rear doors. We were all separated into different areas of the building as their different teams started a full stocktake (not easy - the place was packed), and an accounts team took over the NEW Nixdorf to analyse the recent trading. All day long, Ian, Jeff, and I (and everyone else in the business whatever their job were) “interviewed” by a team of investigators.

There was no explanation as to what lay behind this traumatic encounter which was followed by individual interviews “under caution” in a London office. I spoke to Jeff recently to get his recollection about this amazing “display of interest” in the company and his recollection is that we had recently set up a new company in which we had all agreed to new shareholding arrangements. This entailed selling the entire stock holding of the company to the new entity and a very large VAT return for each one. One would be a payment and the other a refund claim. I think it was something about the timing of the VAT registrations of the two companies that led to the refund becoming due before the VAT was due to be paid by the other company, and this had set alarm bells ringing at HMRC. Anyway no further action was taken, and (apart from some disruption due to various papers that had been seized taking a long while to be returned) no harm was done.

Whisky in the Tea!

Another memorable event from the Upton Lane days was a Philips promotion for electric blankets.

Philips came up with what they thought would be a great promotion for wholesalers to sell Electric Blankets in to retailers. This consisted of a bottle of whisky for every so many blankets purchased. We must have purchased a lot of stock because we had crates and crates of Whisky stacked up everywhere. We sold all the Electric blankets but somehow the Whisky stayed with us. We gave it to the staff, and friends and some clients but we still had a mountain of the stuff.

The (perhaps unhealthy) solution was that for months we took to having Whisky in our tea, and we consumed a lot of tea!

Hard to imaging a promotion like this getting of the drawing board nowadays….

Around this time I can remember saying to the staff: These are the good old days!

The Bomb

Most years various members of the team would visit the Daily Mail’s Ideal Home Exhibition at the London Olympia.

Many new products were launched at the exhibition over the years.

Do you remember the Breville toasted sandwich maker, the Swan Teasmade, the Soda Stream, Hostess trolleys, and the stand mixer?

My favorite was the Swan Electric Frying Pan, it was my main appliance for many years (sad really), I must get another one!

The 1976 exhibition was memorable for a more sinister reason. I was helping to man the Candy Domestic Appliances stand in 1976 when the IRA bomb exploded on our floor.

Immediately after the explosion, a special coded tannoy announcement instructed exhibitors to search their stands for suspicious objects. All around was a scene of panic and people desperately trying to exit the halls, many covered in blood.

A 2 lb (0.91 kg) IRA bomb had exploded in a litter bin at the top of an escalator. At the time the exhibition was crowded with 20,000 people attending the show. 85 people were injured and 4 people lost limbs. One lady died a few days later.

New Location

In the Spring of 1977 we moved to 111 - 113 London Road E13. These modern premises gave us two floors of warehouse and two floors of offices.

At around this time we started to move into non-electric Houseware Products such as Addis Plastics in addition to our electrical ranges, as these offered higher margins for both ourselves and our retailers.

In 1978 Brian Boatwright joined the company full time to control all the financial aspects of the business , he also joined Ian Kyle and myself to live at the rented company’s house.

Van der Molen

Matthew James was never a big player in what are called “Brown Goods” radios hi-fi etc. We did sell a limited range however including products from Van der Molen.

We negotiated an “export” price with VdM and Jeff Frankling was despatched to France to find customers. A mad mission really as not only Jeff did not speak French. It turned out the translator we employed to go with him barely spoke the language either. However after a trip that took him all over France and into Monaco, a few orders were obtained and then the real fun began!

Our research had told us we could pay the import duty at the customs in France and Jeff took cash for this purpose. However the French customs just waived the vehicle through but it seemed obvious that problems would come up later so it was back to the customs office to insist on paying. Needless to say this was not a straightforward process the French officials were not best pleased with this “unauthorized” import.

DanAir - Engine Fire

One year (sorry I do not remember which) Braun invited their major wholesalers to visit the Cologne Trade Exhibition where they had a stand. We were on an early morning DanAir flight from Gatwick. Immediately after takeoff an air hostess (who must have missed the “stay calm under all circumstances” class, came running from the front of the plane “SCREAMING” The Plane is on FIRE! The Plane is on FIRE!

She was right of course, one of the engines was blazing away and we were obviously full of fuel! It was announced that we would return Immediately to Gatwick - followed by - Gatwick is closed due to FOG! We had only just taken off how could it now be closed - speculation quickly circulated they wanted to take the pending accident to another airport.

We then were sent to Stansted airport - same news - closed due to fog…..

Bournemouth was now our new destination - by this time alcohol purchased at duty free was widely circulating, plus jokes about all the new underwear Braun would need to buy when we finally got there. At some stage on this leg the visible fire was finally extinguished.

At Bournemouth the Fire engines and other emergency vehicles were lined up and followed us down the runway. We had been in the air longer than the original planned flight time - what next ?

A few travel mates had had enough, but most of us waited for a replacement plane and continued to Germany. I never flew DanAir again - I imagine neither did the air hostess mentioned earlier.

If anyone can tell me the date (or at least the year) of this Dan Air flight, do please get in touch.

Next Issue: How it all went wrong for Matthew James

Future Issues: Unlocking Franchising