Black cab drivers in London are quite good sources of gossip. Last year one told me "Lehman Bros is in trouble". I had a geezer in the cab last night saying watch out for a big problem with Lehman". That was 9 months before it failed."What's your game then Guv"? Said one avuncular cabby this week, "turnaround and insolvency" says I. "Oh you mean like that Harvey-Jones geezer"?Once we had the usual FAQ, he said he felt that soon real-world companies would start falling over and he was sure retailers were next after banks, builders and estate agents."So mate, who do you think will be the next big name failures"?As per my August post re MFI I said that we felt MFI was close to tipping point. I also stated that we thought Mike Ashley's Sports World was a prime failure target. So he, not unreasonably said "why"?The stores are full of rubbish stock, poorly designed layout's, untrained staff, lots of sale items, big rents and the whole shebang strikes me as totally unprofessional retailing. Oh and no-one gets to know what's going on coz Mr Ashely doesn't like the city. That was my little rant, every time I have been into one of those stores I have left disgusted and, as a former retailer, wondering how it manages to make money.Today Deloitte announced that they had qualified the accounts of JJB Sports and it felt the company was in breach of its bank covenants. That looks a similar organisation, indeed a better run company altogether. So will I be right about Sports World and Mr Ashley?The cabby didn't think so, but he was wearing a cheap Arsenal shirt, need I say more?
Keith and the London Cabby's tips for retailer failures
26 September 2008