What goes around comes around …
Charting the rise and fall of the Loyds electronics store group is to uncover a retail conundrum on a complex scale. Based in the North West of England, the original Loyds Retailers was a Philips-owned Ada Halifax subsidiary.
Philips used Ada (Associated Domestic Partnerships) as a holding company and in the 1960s a handful of retail and rental stores across the UK and Northern Ireland joined Loyds as subsidiaries of Ada Halifax.
This merged chain of around 300 (mainly independent) outlets had been owned or partially owned by Ekco, Pye or other companies in the Pye / Ekco group.
When Philips took over the Pye / Ekco consortium, they added additional concerns that had previously been acquired, in whole or in part, by Philips or other companies they owned (with the exception of 100 stores in the Midlands marketing as Alex Owen and Collis respectively ). .
As a substantial proportion of these organizations remained partially owned, the operators were able to exercise considerable autonomy and stock whatever branded merchandise they preferred.
Clearly, this presented a cumbersome, complicated and wasteful retail scenario, and Philips decreed that further streamlining was required.
They began the reorganization to increase efficiency and profitability by directly purchasing the stores that are still partially owned.
Next for deliberation was the development and implementation of an overall rationalization plan to understand these core goals:
1. Standard trade name
2. Standard marketing program
3. Standard purchasing policy
4. Standard pricing policy
5. Standard distribution policy
It was around this time that I became heavily involved in the second of these core objectives: marketing … From being the advertising agent for only one of the subsidiaries, I found myself mired in the whirlwind of activities that led to the rebranding. launch, with personal responsibility for the advertising and merchandising requirements of all existing outlets.
During the pre-launch phase, the standard centrally controlled policies for marketing, purchasing, pricing and distribution were smoothly relaxed while the subsidiaries were still trading under their original names.
After due consideration, the standard trade name as Loyds was agreed upon.
The switch was made almost seamlessly on a Friday night in August 1970, and champagne corks appeared in area offices across the UK as sales soared over the following weeks.
However, the euphoria was short-lived …
A few months later, sales fell back to pre-launch levels.
Worse still, and contrary to the dictates of the master rationalization plan, spending skyrocketed out of control. In mid-1971, Philips belatedly activated a damage limitation exercise and restructured the top management of Loyds.
The renowned company doctor, Len Govier, was hired in Granada and appointed CEO.
Len quickly stabilized the ship by drastically reducing overall operating costs, and once the dust had settled, he embarked on restoring the expansion program, bringing Alex Owen and Collis into the fold.
Its 100 stores added were renamed in the fall of 1972 as Loyds …
Len Govier’s final act was to bring Philips’ retail division to the burgeoning hypermarket bazaar out of town and he accomplished this by putting one of the old trademarks to work – this time Eclipse.
He opened the first of these outlets in Halesowen in 1972.
Despite measurable progress, cracks were beginning to appear in the relationship between Len Govier and the meddling mandarins at Philips UK headquarters in Century House London.
In March 1973, Len parted ways with Philips to create his own television rental company.
Later that year, and in a desperate attempt to inject new life into the ailing High Street retail chain, around 50 still underperforming outlets were restructured and rebranded as Loyds Rentals.
Once again, the management reorganized and the group faltered for a time, but it became increasingly apparent that Philips had become disenchanted with its retail division.
In 1975, bundles of stores were sold to Currys and a closure program was instigated for the rest.
However, Eclipse continued to thrive and expand until 1976, when Philips finally lost patience, threw in the towel, and abandoned outlets in Halesowen, Glasgow, Manchester, Bristol, Cardiff, and elsewhere. The buyer was Comet.
Could Philips have succeeded with Loyds if they had persisted?
I doubt it.
Retail and Philips were awkward bedfellows from the start …
Postscript:
I was actively involved in all of these initiatives, and while Loyds was a disaster for Philips, it turned out to be a blessing for me, transforming my fledgling ad agency into a major player. It was purchased directly by Saatchi & Saatchi in 1974 and renamed Saatchi Green.
What goes around comes around …
