Work force management for the retail and leisure industry
Failing retailers need to look at their numbers.
The papers remain full of stories about struggling retailers, Dixons, Blacks, HMV, Peacocks, Barratt Shoes and Hawkins Bazar are all under pressure and many high street chains are falling into the hands of the banks or private equity businesses or worse.
We have had a bit of experience with this, one of the big banks that the UK Taxpayer has given a huge amount of help to recently appointed a friend of Shopworks to look at a couple of leisure businesses. One of them went into administration last week and it got me thinking, how well managed are the bank and private equity businesses and will being taken charge of by a bank make any difference.
Let me explain, the friend of Shopworks who was asked to look at this soon to be extinct leisure business asked me to look at their staffing and reporting. They were both in a shocking state, with an average of 25 employees per outlet and a dozen outlets the management didn’t have an accurate view of the P&L and staff costs varied between 35% and 78% of turnover. We suggested that the management put in our Work Force Management and Reporting models and this would have given the management and the bank the accurate data that a company needs to get on top of its problems. The management knew better and refused, the bank didn’t know any better and accepted this position. We parted company and the next I heard of the company the papers were announcing their bankruptcy.
There are plenty of businesses out there that grew in the good times and got away with slack management, the Private Equity companies and Banks who financed them didn’t seem to impose rigorous accounting disciplines on these firms and the results are there for all to see now times are tougher.
We supply a couple of chains of betting shops who are regularly acquiring smaller chains of independent bookmakers and the first action they take when they acquire a new shop is the imposition of our Staffing and Reporting systems. This allows the acquiring firm to quickly get the staff costs under control, get accurate week by week P&L numbers at the touch of a button and set the tone for the staff of the acquired business that they are now part of a highly professional organisation.
Maybe there would be less failures on the high street if more Banks and Private Equity firms took the same approach when a retailer comes into their control.