RE: Onerous Debt29 Apr 2021 17:50
HSS - How to make a simple business complicated!
Strategy 1 - expand the number of stores and have one near every Screwfix - failed (Lose Chief Exec)
Strategy 2 - remove all vehicles from branch network and lose all fitting staff relying on Unipart to fulfil these activities centrally in 1m sq ft unit in Oxford - failed big exceptional cost of £40m (lose Chief Exec)
Strategy 3 - scale down the branch network by 134 branches and service customer base from 40 locations and a selection of builders merchants - sit the branch managers from the closed branches in their bedrooms and ask them to maintain relationships with customers - this will also fail as those relationships will deteriorate as mgrs. get snapped up by competitors and customers will follow - this will lead to revenues diminishing and wipe out cost savings made
this was once a market leading business with a simple operating model - mismanagement over the years has led to the business shrinking year on year, continually writing off past errors and searching for a new modus operandi
It is a crying shame - no profit over the last 8-10 years, a ridiculous finance charge and a management team set to benefit handsomely from an earn out that may see an improvement in share price but no long term future for the business