What goes around comes around…
To chart the rise and fall of the Loyds e-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 subsidiary of Philips-owned Ada Halifax.
Philips used Ada (Associated Domestic Alliances) as a holding company, and in the 1960s a group of rental and retail stores across the UK and Northern Ireland joined Loyds as Ada Halifax subsidiaries.
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 taken over, in whole or in part, by Philips or other companies they owned (with the exception of 100 stores in the Midlands trading as Alex Owen and Collis, respectively). .
As a substantial proportion of these organizations remained part-owned, the operators were able to exercise considerable autonomy and stock any branded merchandise they preferred.
Clearly this presented a cumbersome, convoluted and wasteful retail scenario and Philips decreed that further rationalization was required.
They began the reorganization to increase efficiency and profitability by buying out the stores that were still partially owned.
The next step for deliberation was the development and implementation of an overall rationalization plan to include these core goals:
1. Standard trade name
2. Standard marketing program
3. Standard purchase policy
4. Standard pricing policy
5. Standard Distribution Policy
It was at this time that I became very involved in the second of these main objectives: marketing… From being the advertising agent for just one of the subsidiaries, I became involved in the maelstrom 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, standard centrally controlled marketing, purchasing, pricing, and distribution policies were relaxed while subsidiaries were still trading under their original names.
After due consideration, the standard trade name was agreed upon as Loyds.
The switchover was effected almost seamlessly overnight on a Friday in August 1970 and champagne corks were popped in area offices across the UK as sales soared over the following weeks.
Although the euphoria was short-lived…
A few months later, sales returned to pre-launch levels.
Worse yet, and contrary to the dictates of the rationalization master plan, spending spiraled out of control. In mid-1971, Philips belatedly activated a damage limitation exercise and restructured Loyds’ top management.
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 the restoration of the expansion program, bringing in Alex Owen and Collis.
Its 100 added stores were renamed in the fall of 1972 as Loyds…
Len Govier’s final act was to bring Philips’ retail division into the burgeoning bazaar of out-of-town hypermarkets, and he did it by putting one of the old trademarks up and running again: this time Eclipse.
He opened the first of these outlets in Halesowen in 1972.
Despite measurable progress, cracks were beginning to show in the relationship between Len Govier and the nosy mandarins at Philips UK headquarters at Century House London.
In March 1973, Len parted ways with Philips to set up his own television rental company.
Later that year and in a desperate attempt to breathe new life into the ailing high street retail chain, around 50 still underperforming outlets were restructured and renamed Loyds Rentals.
Once again management was reshuffled and the group floundered for a while, but it became increasingly apparent that Philips had become disenchanted with its retail division.
In 1975, parcels of stores were sold to Currys, and a program of closure was initiated for the remainder.
However, Eclipse continued to prosper and expand until 1976, when Philips finally lost its patience, threw in the towel and got rid of outlets in Halesowen, Glasgow, Manchester, Bristol, Cardiff and elsewhere. The buyer was Comet.
Could Philips have been successful with Loyds if they had persisted?
I doubt it.
Retail and Philips were awkward bedfellows from the start…
Postscript:
I was an active participant in all these initiatives and although Loyds was a disaster for Philips, it turned out to be a blessing for me, transforming my fledgling advertising agency into a major player. Saatchi & Saatchi bought it outright in 1974 and renamed it Saatchi Green.
What goes around comes around…