What goes around comes around…
To chart the rise and fall of the Loyds group of electronic stores 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 retail and rental stores throughout 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 partly owned by Ekco, Pye or other Pye/Ekco group companies.
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 owned by them (with the exception of 100 stores in the Midlands trading as Alex Owen and collis, respectively). .
As a substantial proportion of these organizations remained in partial 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 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 objectives:
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 heavily involved in the second of these main objectives: marketing… From being the advertising agent for just one of the subsidiaries, I found myself caught up 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, 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 trading name was agreed upon as Loyds.
The changeover took place almost seamlessly overnight on a Friday in August 1970 and champagne corks were uncorked at area offices across the UK as sales soared over the following weeks.
Although the euphoria did not last long…
A few months later, sales returned to pre-launch levels.
Worse yet, and contrary to the dictates of the master rationalization plan, spending has skyrocketed out of control. In mid-1971, Philips belatedly activated a damage limitation exercise and restructured Loyds’ top management.
The renowned company doctor Len Govier was hired in Granada and appointed CEO.
Len quickly stabilized the ship by slashing overall operating costs, and once the dust settled, he embarked on the restoration expansion program, bringing in Alex Owen and Collis.
Its 100 aggregate stores were rebranded in the fall of 1972 as Loyds…
Len Govier’s final act was to bring Philips’ retail division to the burgeoning out-of-town hypermarket bazaar, and he did it by putting one of the old brand names 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 in Century House London.
In March 1973, Len parted ways with Philips to establish 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 renamed Loyds Rentals.
Again, management was reshuffled and the group floundered for a while, but it became increasingly apparent that Philips had grown disenchanted with its retail division.
In 1975, allotments of stores were sold to Currys and a closure program began for the remainder.
However, Eclipse continued to thrive and expand until 1976, when Philips finally lost 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…
I was an active participant in all of these initiatives and while Loyds was a disaster for Philips, it turned out to be a boon for me, transforming my fledgling ad agency into a major player. Saatchi & Saatchi bought it outright in 1974 and renamed it Saatchi Green.
What goes around comes around…