What goes around comes around…
Charting the rise and fall of electronic stores group Loyds is to uncover a retail enigma on a complex scale. Based in the North West of England the original Loyds Retailers was a subsidiary of Ada Halifax owned by Philips.
Ada (Associated Domestic Alliances) was used by Philips as a holding company and in the 1960s a clutch of retail and rental stores throughout the United Kingdom and Northern Ireland joined Loyds as subsidiaries of Ada Halifax.
This amalgamated chain of around 300 outlets (mainly independents) had been owned or part 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, fully or in part, by Philips or other companies in their ownership (with the exception of 100 stores in the midlands trading as Alex Owen and Collis respectively).
As a substantial proportion of these organisations remained in part ownership, the operators were able to exercise considerable autonomy and stock whatever branded merchandise they preferred.
Clearly this presented a cumbersome, convoluted, and wasteful retail scenario and Philips decreed that major rationalisation was required.
They kicked off reorganisation for increased efficiency and profitability by buying outright those stores still in part ownership.
Next for deliberation was the development and implementation of a plan for overall rationalisation to comprise these core objectives:
1. Standard trading name
2. Standard marketing programme
3. Standard purchasing policy
4. Standard pricing policy
5. Standard distribution policy
It was around this time that I became heavily engaged in the second of these core objectives: marketing… From being the advertising agent for just one of the subsidiaries I found myself pitch forked into the maelstrom of activities leading up to the re-branding launch, with personal responsibility for the publicity and merchandising requirements of all existing outlets.
During the pre-launch phase, centrally controlled standard policies for marketing, purchasing, pricing and distribution were gently eased in while the subsidiaries still traded under their original names.
After due consideration the standard trading name was agreed as Loyds.
The change was effected almost seamlessly overnight one Friday in August 1970 and champagne corks popped in area offices throughout the UK as sales rocketed during the weeks to follow.
The euphoria was short lived though…
A few short months later sales dipped back to pre-launch levels.
Worse still and contrary to the diktat of the rationalisation master plan, expenses soared out of control. In mid 1971 Philips belatedly activated a damage limitation exercise and restructured the senior management of Loyds.
Acknowledged company doctor Len Govier was recruited from Granada and appointed Chief Executive.
Len rapidly steadied the ship by dramatically reducing overall operational costs, and once the dust had settled, embarked on restoring the programme of expansion, bringing Alex Owen and Collis into the fold.
Their aggregated 100 stores were re-branded in the autumn of 1972 as Loyds…
Len Govier’s final act was to take Philips retail division into the burgeoning out-of-town hyper mart bazaar and he accomplished this by putting one of the old trademarks to work again: this time Eclipse.
He opened the first of these outlets in Halesowen in 1972.
Despite quantifiable progress, cracks were starting to show in the relationship between Len Govier and the meddling mandarins at Philips UK headquarters in Century House London.
In March 1973 Len parted company with Philips to set up his own TV rental company.
Later that year and in a desperate attempt to pump fresh life into the ailing high street retail chain, around 50 outlets which still under-performed were restructured and re-branded as Loyds Rentals.
Once again the management was reorganised and the group tottered along for a time but it became increasingly apparent that Philips had become disenchanted with their retail division.
In 1975 parcels of stores were sold off to Currys and a programme of closure instigated for the remainder.
Eclipse though continued to prosper and expand until 1976 when Philips finally lost patience, threw in the towel, and hived off the outlets in Halesowen, Glasgow, Manchester, Bristol, Cardiff and elsewhere. The buyer was Comet.
Could Philips have made a success of Loyds had they persisted?
I doubt it.
Retailing and Philips were uncomfortable bedfellows from the outset…
I was an active participant in all of these initiatives and while Loyds was a disaster for Philips, it proved a godsend for me, transforming my fledgling ad agency into a major player. It was purchased outright by Saatchi & Saatchi in 1974 and re-branded Saatchi Green.
What goes around comes around…