All posts by T Farrell

Food

Dunkin’ Donuts enters the UK market

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So Dunkin’ Donuts has entered the UK market, with two locations so far, and plans for expansion to 100 outlets in five years. The locations of the first two outlets, Harrow and Chelmsford (with plans for a third in Cambridge) make me feel confident about the chances for the chain’s future success in the UK. Not too flashy, with low rents. The mistake of many US food chains has been to occupy high profile central London outlets, with very high rents, and this rarely works out. This lack of arrogance on the part of DD may seem refreshing, but their humility stems from the fact that this is their third attempt to crack the UK market.

Harrow Dunkin' Donuts outlet
The first Dunkin’ Donuts site in the UK, in Harrow

Despite media claims about the “battle of the donuts”, Krispy Kreme will not be DD’s major rival in the UK. DD will compete primarily with Greggs, supermarkets, McDonald’s, and to a lesser extent the likes of Costa and Starbucks. Greggs is the company that has the most to fear from DD’s expansion, although Greggs is a wily competitor. Greggs did not emerge as the sole national bakery chain by falling asleep at the helm.

DD’s main customer base will be commuters, particularly during the lunchtime period. I haven’t been a DD either in the UK or elsewhere, so I can’t comment specifically on the food quality, but as it looks to be similar to McDonald’s and Greggs standard. If this is a case, it will be difficult for DD to succeed without matching their competitor’s prices. Due to its obvious initial cost disadvantage to its competitors due to its lack of scale, DD’s American parent company will have to be prepared to absorb sustained losses for at least a few years before the chain becomes profitable. The question is, how badly to DD want to gain a slice of the UK market?

Industrial

On the skids: Dunlop Rubber

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Dunlop Rubber was one of the leading rubber manufacturers in the world. Its presence at Fort Dunlop in Birmingham ended after almost 100 years in 2014.

Establishment and growth of the business
John Boyd Dunlop (1840 – 1921) was a Scotsman who developed the pneumatic tyre. Harvey du Cros (1846 – 1918) established a company in Dublin to manufacture bicycle tyres based on Dunlop’s discovery in 1889. Dunlop himself was sceptical of the commercial potential of the product, and took a relatively modest 20 percent stake in the venture.

Dunlop’s first pneumatic bicycle tyre. Image from Wikimedia Commons.

The Dunlop tyre was tested by the greatest cyclist of the era, Willie Hume (1862 – 1941), who won seven races out of eight in a trial of the new product.

Manufacture was relocated from Dublin and Belfast to Coventry, the heart of the British cycle industry, from 1893. The business grew rapidly.

Dunlop becomes a public company
John Boyd Dunlop divested his shareholding in 1895, and the company was sold to the financier Ernest Terah Hooley (1859 – 1947) for £3 million in 1896. Within a matter of months, by bringing on aristocratic directors and garnering press attention, Hooley was able to publicly float the company for £5 million.

Additional factories were established in the United States, France and Japan.

Dunlop produced its first tyre for a motor car in 1906. The first rubber estates in Malaysia were acquired, in order to ensure a supply of raw material, in 1910.

Dunlop employed 30,000 people by 1916. That year construction began on the 400-acre Fort Dunlop headquarters and production site at Birmingham.

Fort Dunlop in Birmingham (2007). Image from Wikimedia Commons.

Dunlop was the fourteenth-largest manufacturing company in Britain by 1918, and its only large-scale tyre manufacturer. It had a market value of £8.9 million in 1919.

Dunlop began to diversify from tyres from 1924. It entered the sports market in earnest when it acquired the tennis racket manufacturer F A Davis. Charles Macintosh, the raincoat manufacturer, was acquired in 1926.

The Malaysian estates were expanded over time, and Dunlop was the largest single landowner in the British Empire by 1926.

Dunlop remained the largest tyre manufacturer in the world. Dunlop was the eighth-largest public company in Britain by 1930, with a market value of £28.2 million.

All of the 61 official world records for car speed had used Dunlop tyres by 1933.

Dunlop was a major industrial supplier for Britain during the Second World War, producing the bulk of rubber tyres and boots for the war effort.

Dunlop had 70,000 employees, and sales outlets in nearly every country in the world by 1946. Dunlop  was the tenth-largest British company by 1948, with a market value of £55.9 million.

The fortunes of Dunlop were closely interlinked with the British car industry. Britain was the second-largest car manufacturer in 1950, and the largest exporter of cars in the world. Many of these cars were fitted with Dunlop tyres. Dunlop accounted for almost half of all tyre sales by value in Britain in 1950.

Dunlop employed 100,000 people by 1955, and was the second-largest private employer in Britain after ICI. Dunlop was the twelfth-largest company in the world outside the United States in 1959.

Slazenger, the sporting goods business, was acquired in 1959.

Dunlop enters into decline
Dunlop was slow to adapt to the new market for steel-belted radial tyres, and had begun to decline by the early 1960s. Performance was also undermined by the decline of the British car industry.

A lengthy strike at Fort Dunlop resulted in a loss of £3 million at the group’s British operations in 1970: the first in its history. As a result, the largest British car manufacturer, British Leyland, which had previously acquired all of its tyres from Dunlop, adopted a policy of dual-sourcing in order to ensure supply.

Dunlop was the 35th-largest company outside of the United States in the late 1960s. Dunlop was the eleventh-largest British industrial company in 1973, with a turnover of £495 million and capital of £290 million.

Merger with Pirelli and break-up of the business
Dunlop merged with Pirelli of Italy to form the third-largest tyre manufacturer in the world, after Goodyear and Firestone, in 1971. The combined group had a turnover of almost £900 million.

The merger was to prove a disaster: the Pirelli branch lost money every year until 1980. The merger was undone in 1981, but it was too late: Dunlop had amassed massive debts and was almost bankrupt. Dunlop reduced its workforce by over 19,000 between 1978 and 1982.

A modern Dunlop tyre. Image from Wikimedia Commons.

Dunlop’s tyre manufacturing operations ran at an increasing loss by 1978. Of eight European sites, only the Washington plant near Newcastle upon Tyne remained profitable by the late 1970s. The tyre operations lost £22 million in 1980.

Dunlop sold its 51 percent stake in its Malaysian rubber estates to Multi-Purpose Holdings, a Chinese-Malaysian group, for £60 million in 1981. The Dunlop estates represented the sixth-largest plantation group in Malaysia, covering over 55,000 acres.

Dunlop’s loss-making European tyre business was sold to Sumitomo, its former Japanese subsidiary, for £82 million in 1983.

The Dunlop workforce was reduced by half between 1970 and 1983, from 107,000 to 53,000 people.

The remnant of Dunlop was acquired by BTR, an industrial conglomerate, for £101 million in 1985.

BTR sold the United States tyre business to its management for £142 million.

Dunlop was the fourth-largest tyre brand in 1988, with sales of $3.45 billion.

BTR sold the remaining Dunlop businesses to various interests around the world in 1996. The sporting arm, Dunlop Slazenger, was sold to Cinven, a private equity firm, for £372 million. Dunlop Standard, the aerospace group, was sold to private equity firm Doughty Hanson for £510 million.

The bulk of Sumitomo’s sales came from the Dunlop brand in 1999. Dunlop was the largest tyre supplier to Toyota and Mercedes-Benz, and one of the principal suppliers to Honda and Nissan.

Retail

W H Smith and Woolworths: a cautionary tale

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Tired stores, confusion over what the shops sell, high prices. No, it’s not Woolworths, its W H Smith’s.

W H Smith currently occupy the position that Woolworths held maybe ten years before its demise. The Smith’s stores desperately need a makeover. Too many of the stores are dirty and untidy, and reminiscent of a jumble sale.

Smith’s actually did quite well from the demise of Woolworths. It likely picked up some of the stationery, toys and confectionery business from its rival. But it’s struggling in the face of intense competition on the high street, online, and from the supermarkets.

The travel concessions are actually pretty good. They offer the traveller all that he or she needs for a journey: books, chocolate, magazines. But I don’t see much reason to visit a high street Smith’s. Waterstones do books better, Amazon do books cheaper. Okay, their magazine range is good. I might consider them for cards if there isn’t a Clinton’s nearby. Their stationery is quite good, but nothing fancy, and is overpriced. And why do I need stationery? People don’t really buy stationery that often, do they? It’s no surprise to read that the travel concessions are keeping the entire business afloat.

http://www.retail-week.com/companies/whsmith/whsmith-trials-franchising-to-expand-its-store-network/5050816.article

Smith’s seem to sell a lot of children’s toys and games these days. It’s just a confusing premise. Why does a newsagents sell toys? I don’t think W H Smith why I need to buy a toy. One gets the impression that they’re just trying to fill some of those massive stores.

The whole situation reminds me of Woolworths. Both are (were) brands with enormous recognition and presence on the high street. But people found fewer and fewer reasons to pop in. Then they got embarrassed to be seen in one. Then Woolworths closed.

I read that Smith’s are trialling franchising their brand to newsagents. Some trialists report a 20 percent rise in sales as a result. Smith’s main problem is their store size. They’d be better off with more small locations that trade on their convenience. Smaller stores would result in lower rents.

Leisure

Sonic boom: the saga of SegaWorld London

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SegaWorld London opened as the largest indoor theme park in the world. It was closed after just three years. What went wrong?

Background
Nigel Wray (born 1948) and Nick Leslau (born 1959) acquired the Trocadero, a large building on Piccadilly Circus, London, for £96 million in 1994. A profile in the Evening Standard described Wray as “the nearest British equivalent to American investment genius Warren Buffett”, whilst Leslau was “a chunkily-built North London Jew with all the elegance of a natural street trader”.

Although sited on one of the busiest thoroughfares in Europe, the Trocadero had historically failed to prove profitable. Tenants included a Planet Hollywood restaurant, a cinema, and retailers such as HMV, but 110,000 square feet across seven floors remained unused.

The Trocadero building at Piccadilly Circus

Development
Nick Leslau negotiated with Sega to open an indoor theme park in the unused space. Sega, along with Nintendo, dominated the video gaming market, and the Sonic the Hedgehog mascot was at the peak of its popularity. Sega would have full managerial control and operate the park rent-free, with the landlords receiving a half-share of profits.

The family-friendly SegaWorld concept had already undergone a soft launch with “Sega Park”in Bournemouth in July 1993. The largest video game arcade in Europe had been opened at a cost of £3 million.

The London site was to be modelled on Sega’s Joypolis theme park in Yokohama, Japan, and would include many of the same rides. Joypolis had been the largest indoor theme park in the world when it was opened in 1994.

Sega claimed to have invested £650 million in research & development for its theme parks. James Bidwell, head of marketing for Sega Europe, was confident that “the return on investment will be very high”.

SegaWorld London
SegaWorld London was the largest indoor theme park in the world. An initial investment of £45 million included six rides which combined traditional and virtual reality elements. The focus on virtual reality was partly due to constrained space at the site. Each ride cost around £2 million to construct. The rides were complimented by over 400 coin-operated arcade machines.

“We’ve designed it to have at most a 30 minute queue time for special attractions”, commented Peter Searle, operations and development director for Sega Amusements Europe.

SegaWorld also contained the longest above-ground escalator in Europe. Customers embarked upon it at the park entrance, and it took them up all seven floors in a single run. It was so large that it had to be lowered through the Trocadero roof in five sections during installation.

SegaWorld launch and press reactions
James Bidwell described SegaWorld as, “the most sensational new tourist attraction in the world”.

SegaWorld London opened in September 1996, with a launch party featuring pop star Robbie Williams. Nick Leslau witnessed over 100 people queuing for a ride that could handle just 40 customers per hour. He would later describe how his “heart just sank” as he realised that his partnership with Sega was “a mistake”. He prepared himself for a media evisceration.

The initial reviews of SegaWorld were as unforgiving as Leslau had feared. Charles Spencer of the Daily Telegraph described the park as “little short of a disgrace” and “the most joyless tourist trap in London”. The park was “prosaic and tacky”, according to Cosmo Landesman of the Sunday Times. Tom Whitewell of The Guardian claimed, “it’s not all that different from your local shopping centre”, and criticised the ride technology as “nearly always obvious and unsubtle”. The Economist dismissed SegaWorld as a “vast video game arcade”. Several reviewers pointed out that one ride was simply a dressed-up dodgems.

SegaWorld London was overpriced (£12 entry for adults), rides broke down, the queues were lengthy, and it failed to live up to the marketing hype. The coin-op machines cost £1 a time, and were already available elsewhere without an entrance fee. Leslau later described his disappointment:

Sega could not deliver what they said they’d deliver… It looked amazing, but their rides were not capable of delivering the number of people they needed to deliver to support the operation. People were queuing for ages … It was a question of over-anticipation and under-delivery.

Later media reviews continued to criticise SegaWorld. For Paul Gogarty of the Daily Telegraph the park was “a hot, exhausting, dark experience”. John Tribe of The Times described the attraction as a “glitzy con-trick”.

SegaWorld London was subject to a relaunch in December 1996. The entrance fee was reduced to £2, but ride fees of between 50p and £3 were introduced in an attempt to reduced the hour-plus queues that developed during busy periods. Leslau explained that “cultural mistakes” by Sega had underestimated the tolerance of British and European guests for lengthy queue times.

SegaWorld London is closed
It was reported that SegaWorld London had attracted 1.1 million visitors by February 1997, but this, as well as average customer spend, was about half what had been anticipated. Leslau accused Sega of trying to run the park “by remote control from Tokyo”, and criticised the lack of basic facilities such as a bar, cloakrooms or seating areas.

In July 1997 Gervase Webb of the Evening Standard wrote that the park was “echoingly, cavernously empty … a vast white elephant”. Sega claimed an average attendance rate of 3,500 people a day.

Wray and Leslau stepped down as chairman and managing director of the Trocadero in the summer of 1997. Wray commented, “we had not realised that SegaWorld would do so badly and it is a great disappointment”. John Conlan was appointed as chairman. He accused Sega of lacking “any coherent plan that could improve profits to levels that would begin to mitigate the rental obligations for the space it occupies”.

SegaWorld London received a £650,000 facelift in December 1997, and admission fees were removed. Conlan admitted:

We have realised that this is not an indoor theme park. It is an amusement arcade and you would not normally pay to go to an amusement arcade.

Unfortunately the removal of admission fees resulted in a reduced customer average spend of just £1.70.

Closure of SegaWorld London
Sega was evicted from the Trocadero in September 1999. The disorganisation, mechanical failures and lack of market research at the park reflected poorly on Sega’s management. Conlan described the SegaWorld concept as “fundamentally flawed”.

Sega quietly reversed plans to open 100 Sega Worlds across Europe and the United States. A Sega World was opened in Sydney, Australia in 1997, but failed to attract sufficient guests, and closed down in 2000. The Yokohama Joypolis was closed in 2001.

Subsequent tenants
The SegaWorld site was taken over by Family Leisure Group, who had operated the Funland video game arcade on the ground floor of the Trocadero. Michael Green, the managing director of the group, commented on SegaWorld, “once I saw it, I knew it couldn’t last long. It didn’t have the right mix for this market and I don’t think they had a clear vision for the property”. The old SegaWorld attractions, with the exception of the Aqua Planet 3D simulator, were closed down.

Funland was gradually reduced in size, before it was closed in 2014. A large part of the Trocadero was reopened as a budget hotel in 2020.

Comparisons
The promises of interactivity, optimism for the future, over-expectation and consequent media cynicism that defined SegaWorld also characterised the launch of the Millennium Dome in London. Further parallels can be made between SegaWorld and DisneyQuest, a similar indoor theme park with virtual reality elements which also over-promised and failed to deliver.

Confectionery

Cadbury Dairy Milk

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Cadbury Dairy Milk

Cadbury is the second highest selling confectionery brand in the world after Wrigley’s chewing gum. Similar to the Coca-Cola Company, much of Cadbury’s success has been driven by a single product, the Dairy Milk bar. When someone says Cadbury, you instantly think of Dairy Milk, it’s purple packaging, and the famous “glass of milk and a half” slogan.

The Cadbury Dairy Milk chocolate bar was introduced in 1905. Developed by George Cadbury Jr, it was the first milk chocolate bar to be mass produced in the UK. By 1914, it was the highest selling Cadbury line. The economies of mass production combined with rising incomes meant that the working classes could afford chocolate for the first time.

However, other manufacturers such as Fry and Rowntree soon caught up with Cadbury’s mass production methods. So why were none of their own product lines as successful as Dairy Milk? There is first mover advantage, yet it took seventy years for a product to seriously challenge Dairy Milk in the UK market. The Rowntree Yorkie bar made inroads in the 1970s, but has since faded somewhat. The Mars Bar built market share throughout the 1970 and 80s, largely because it retailed for half the price of Dairy Milk, so it was hardly battling on equal terms.

Why has Dairy Milk been so successful? There are two consistent brand selling points: Quality/Healthfulness and Luxury.

The brand has always been advertised as affordable luxury. Purple has been the dominant colour in the packaging since 1920. When you see purple on the shelf of the supermarket, you can be almost certain that it’s a Cadbury product. Purple reinforces the brand image: purple is regal and elegant and represents luxury. By dressing their product in purple regalia, Cadbury are expressing their confidence in the quality of their product. The packaging implies “Fit for Kings”, without the arrogance of explicitly saying so.

There is also an implicit ego boost associated with consuming a product that is “fit for royalty”. “You are good enough to consume this regal product”. The brand is egalitarian, which ties into the egalitarian nature of the Quakers, of which the Cadbury family were members.

This ties in with the original context of the product, which was offering the once luxury product, only affordable for the few, to the masses.

The luxury connotations of Dairy Milk reinforce the notion of a chocolate bar as a form of self-treating. The idea of chocolate as a reward, which is a powerful one, as consuming chocolate triggers the release of endorphins into the brain, which are the body’s “reward mechanisms”.

Since 1928, the product has been represented by the famous slogan, “A glass and a half”. This refers to the amount of milk (426ml) that a half pound (227g) bar of Dairy Milk contains. The slogan represents quality: no other competitor claims to contain as much milk, and milk is a simple, pure, quality ingredient.

Milk also suggests a certain amount of healthfulness. Milk grows bones and is/was given to schoolchildren. Milk is also a natural product, which counteracts the natural suspicions the individual may have regarding processed food.

Meanwhile, the name “Dairy” conjures up wholesome, rural imagery. The countryside has healthy and natural connotations. Interestingly, the second most successful Cadbury product after Dairy Milk is the Creme Egg, which also uses the double “dairy” imagery.

Dairy Milk line extensions continue to reinforce this image. To the modern consumer, “Fruit and Nut” and “Whole Nut” sound more like health bars or healthy cereals than high calorie confections. Again, fruits and nuts are products with healthy and natural connotations that professionals are always recommending we eat more of.

This healthfulness connotations help to allay the individual’s principal reason for not buying chocolate: it’s not good for you as it has a high sugar and fat content.

Leisure

Bouncing back: Dunlop Slazenger

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How did Dunlop Slazenger become one of the largest manufacturers of sporting equipment in the world?

Dunlop was established as a rubber goods company in 1889. In 1909, it moved into sporting goods when it began to manufacture 144 golf balls a day at Manor Mill in Birmingham. In their first year, Dunlop balls won five of the major British golf tournaments.

The success of the Dunlop golf ball led the company to enter into tennis ball production from 1924. Tennis rackets were introduced from 1925. F A Davis, sports manufacturers, was taken over in 1925 in order to acquire a distribution network.

One third of British open tournaments used Dunlop tennis balls by 1926.

Gardner Brothers of Waltham Abbey in Essex was acquired in 1929. Production of rackets was transferred to the site. Waltham Abbey was the largest producer of tennis rackets in Europe within a few years.

The decade saw Dunlop established as a leading sporting goods supplier due to a mechanised production line, which reduced costs, as well as a strong commitment to research and development. It was considered the foremost manufacturer of golf balls.

Dunlop was the largest manufacturer of sporting equipment outside of the USA by 1933. More than three million golf balls, three million tennis balls and 80,000 rackets were produced in 1936.

Production of golf balls was temporarily discontinued in 1941 due to war work and a lack of rubber supply.

After the war, Dunlop transferred production of golf balls and tennis balls from Fort Dunlop to Speke, Liverpool, where it had leased a former aircraft factory.

Dunlop’s Fort Maxply tennis rackets were used by more than half of the competitors at Wimbledon in 1952.

Slazenger, a major English sporting goods rival, was acquired in 1959.

Dunlop Sport exports amounted to £1.6 million in 1960. The business was a world leader in golf and tennis.

Dunlop and Slazenger ranked alongside Wilson and Spalding as the leading manufacturers of quality tennis rackets.

Carlton Sports of Saffron Walden, Essex, manufacturer of badminton rackets and shuttlecocks, was acquired in 1968.

By the end of the 1960s Dunlop Slazenger had established nearly 30 factories across Britain, Ireland, France, Germany, the USA, Canada, Australia, New Zealand, South Africa, Japan, the Philippines, Malaysia and Indonesia.

Astronaut Alan Shepard used a Dunlop 65 ball when he played golf on the moon in 1971.

A golf ball and club factory was established at Normanton, Yorkshire, in 1973.

62 percent of all tennis rackets used at Wimbledon in 1973 were made by either Dunlop or Slazenger.

A new tennis ball factory was established in the Philippines in 1977.

The Speke factory was closed in 1979. Golf ball production was concentrated at Normanton.

Rationalisation saw Dunlop Slazenger exit niche categories such as table tennis and archery.

Production of rackets at Waltham Abbey in Essex fell prey to cheaper imports produced overseas, and the factory was closed in 1979, with production concentrated on the Slazenger site at Horbury in West Yorkshire.

Dunlop Slazenger supplied twice as many Wimbledon competitors in 1980 as its nearest rival, Wilson. Graphite rackets were introduced from 1980.

From 1981 to 1988, Dunlop Sports sponsored John McEnroe in the most expensive tennis sponsorship deal in the world, worth $500,000 annually, plus commissions on McEnroe branded rackets.

More tennis Grand Slams have been won with Dunlop rackets than any other brand.

By 1982 Dunlop Slazenger had annual sales of £100 million, but it was struggling to remain profitable. In 1983 the company lost £6 million. Alan Finden-Crofts was appointed chief executive, and identified the company weaknesses as a local (as opposed to international) outlook, weak marketing and a lack of a global strategy. By 1986 he had turned around the company to make an annual profit of £16 million.

Wooden tennis racket production ended in 1984 as customers increasingly preferred lightweight graphite equipment.

The Slazenger factory at Horbury, Yorkshire was closed in 1986. The majority of production was transferred to the Far East.

Dunlop Slazenger was acquired by Cinven, a private equity firm, for £372 million in 1996. Cinven sold Dunlop’s rights to the Puma sports brand in Britain back to its German parent. Cinven invested heavily into the business to make it profitable.

Much of the Dunlop Slazenger sports equipment was manufactured in China by the turn of the century.

Dunlop Slazenger held 15 percent of the United States golf ball market by 2000.

Cinven “struggled with outdated management systems, missing orders and overlapping sales teams, competing to sell Slazenger golf balls and the upmarket Maxfli range to the same customers”.

The Normanton factory was closed with the loss of 69 jobs in 2000. Production was relocated to the United States.

Dunlop Slazenger was taken over by its lenders, led by Royal Bank of Scotland, in 2001.

Sales of tennis, golf and squash balls, as well as shuttlecocks, accounted for almost 70 percent of sales by this time, with annual sales of nearly 150 million units.

The Maxfli golf brand was sold to Adidas for £20 million in 2002.

A large tennis ball manufacturing plant in Barnsley, Yorkshire was closed in 2002, and the machinery was shipped to a facility outside Manila in the Philippines. Token production in Germany and South Africa also ended, and the Philippine plant became the sole supplier of Dunlop Slazenger tennis balls. Due to Dunlop Slazenger’s high market share, the company estimated that 60 percent of the world’s tennis balls and 90 percent of squash balls were manufactured at the site.

Dunlop was producing around 250,000 golf balls every day by 2003.

RBS returned the business to profitability and sold the company to Sports Direct for £40 million in 2004. Sports Direct closed the head office at Camberley with the loss of 37 jobs.

Sports Direct sold Dunlop Sport to Sumitomo Rubber Industries of Japan for £112 million in 2017. Sports Direct retained control of Slazenger, thus reversing the effects of the Dunlop Slazenger merger in 1959.

Leisure

A history of Donnay Sports

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Donnay is best known today as a low-cost clothing brand available from Sports Direct stores.

Donnay_Logo_1

Donnay was established in Belgium in 1913. The business became involved in sporting goods when it began to manufacture wooden tennis rackets from 1934.

Donnay was the largest producer of tennis rackets in the world throughout the 1970s.

Donnay was buoyed by its sponsorship of Bjorn Borg, the superstar tennis player of the era, between 1979 and 1983. As the company did not have a marketing manager until 1987, the company image during that era was very closely tied to Borg.

Donnay first ran into trouble in 1973 when Wilson Sporting Goods dropped the company as its contract tennis racket manufacturer in favour of cheaper production in Taiwan. The Wilson contract had accounted for 1.3 million rackets out of an annual production figure of two million.

Donnay was also slow to make the switch from the increasingly obsolete wooden rackets to the lightweight graphite models. The company manufactured just 3,000 graphite rackets in 1980, against 1.8 million wooden rackets.

When Bjorn Borg retired from tennis in 1983, it was the final nail in the coffin for Donnay. The company had tied its fortunes too closely to a single figure, and had maintained production in Belgium whilst competitors moved production to the Far East. Its production line was ten times longer than rival manufacturers.

The company lost money every year after Borg’s retirement, until it declared bankruptcy, with $35 million of debt, in 1988. It was purchased by Bernard Tapie, a French singer turned businessman, who later acquired Adidas.

Donny finally ended wooden racket production towards the end of the 1980s.

Tapie had a major success when he signed an 18 year old Andre Agassi between 1989 and 1992. Despite this, the company struggled to maintain profitability. The local government in Belgium acquired it to save it from bankruptcy in 1993. The factory in Belgium was closed down, and a company that had employed 600 people now employed 25 at a distribution centre. Mike Ashley, the owner of Sports Direct, acquired the global rights to the brand for $3.9 million in 1996.

Ashley originally supported the brand as a leading tennis company. However in 2004, he acquired Dunlop Slazenger. Dunlop-Slazenger became the prestige tennis brand, and Donnay became the marque for cheap rackets and clothing.

Hospitality

A history of TGI Friday’s in the UK

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TGI Friday’s was one of the first American casual dining chains to expand overseas.

Background
Alan Stillman, a perfume salesman, established TGI Friday’s on the east side of Manhattan in 1965. At a time when New York pubs and bars were aimed at men, Stillman made his bar brighter, cleaner and more domestic in order to make it more attractive to women. Stillman recalled, “there were really no good places for singles to hang out. No places where a single girl felt comfortable going into a bar area.” The venue quickly developed a reputation as a singles bar, popular with airline stewardesses and junior executives.

Stillman also pushed the food offering, with large portions at reasonable prices. In the first full year the 60 cover venue took over $500,000.

Stillman soon opened more outlets across New York City.

The flamboyant bartenders became the direct inspiration for the Tom Cruise movie Cocktail (1988), which was filmed in the original Friday’s.

Franchise outlets were opened in the Midwest. The Dallas branch became the most successful restaurant in the chain, with annual sales of $2 million by 1972.

TGI Friday’s became the first chain of themed casual dining restaurants. The restaurant claims to have invented loaded potato skins in 1974, and helped to popularise nachos. From the mid-1980s the business was repositioned from a singles bars to a restaurant.

Whitbread establishes the franchise in Britain
Whitbread had established the Beefeater restaurant chain in Britain in 1974. Eager to replicate its success, Whitbread experimented with a number of new restaurant concepts in the 1980s. A 50 percent stake in the British franchise for Pizza Hut was to prove highly successful from 1982. The franchise for Quick, a Belgian fast food chain, was acquired, but the concept failed.

Whitbread opened the first TGI Friday’s in Britain in Birmingham in 1986. A former Wendy’s in Covent Garden, London was converted in 1987. The site enjoyed a £1 million makeover, and was an exact replica of the American model. By the end of the 1980s further outlets had been established at Fareham, Reading and Cardiff.292px-TGI_Fridays_logo.svg

The chain was an instant success in Britain. Whitbread had insight into the mindset of the British public, and knowledge of the property market.

The Covent Garden site was the busiest TGI Friday’s in the world by 1992, and reputedly the busiest restaurant in Europe. In one week, its 260 seats yielded a turnover of £180,000.

There were 12 sites in Britain by 1993, and the average annual turnover was £2.5 million. According to Sally Dibb and Lyndon Simkin, Friday’s altered the UK dining scene “beyond recognition” due to its vitality, enthusiasm and tight quality control standards. The company hired staff with extrovert personalities, and the restaurants provided a theatrical experience. From the beginning, TGI Friday’s was an early example of a company that tried to be “nice”, to treat its employees fairly and to be a good corporate citizen.

The chain grew to 41 outlets by 2004. At this time, Whitbread indicated that it would divest the business if profits failed to improve. Sales remained disappointing throughout 2005. Whitbread felt that they had grown the chain as much as they could, and sold the chain to the American parent company, Carlson, for £70.4 million in 2007.

Electra Private Equity acquired the business for £99 million in 2014. Electra spun off TGI Friday’s as Hostmore, a listed company, in 2021.

Hospitality

Squaring off: Wendy’s Hamburgers in the UK

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Wendy’s is the third largest hamburger chain in the world. It has failed twice in the British market- will it succeed on its third attempt?

Wendy’s and Grand Metropolitan
Wendy’s entered the British market with a flagship restaurant on Oxford Street in 1980. For trademark reasons it was called Wendy, not Wendy’s. The operation was a joint venture with Grand Metropolitan, a large British hospitality concern. Grand Met was an experienced local operator, having already enjoyed great success with the Berni Inn casual dining chain. Plans were announced to open 500 outlets across Britain, with an over-25s target demographic.

Grand Met exited the joint venture after just six months. Wendy’s International assumed full control of the British operations.

A second outlet was opened on the Strand in 1981.

Wendy expanded to 16 restaurants. However high rental costs at its central London sites, menu problems, and a weak economy left the business struggling to make a profit.

The sites, all of which were located in London and the South East, were sold to Whitbread for £6.8 million in 1986. Whitbread converted the sites into Quick, the Belgian fast food brand, and Pizza Hut outlets.

Denny Lynch, vice president of communications for Wendy’s, explained:

we were doing so well in the US, we just kind of assumed that it would carry over. But it’s a lot harder to do than just putting up a restaurant. It takes a better understanding of the nuances of each one of these countries you’re going into.

Wendy’s returns to the British market
Wendy’s returned for a second attempt at the UK market in 1992. The first two branches were at Shaftesbury Avenue and Oxford Street. Outlets were now branded as “Wendy’s”, and featured salad bars. Sites were concentrated at London and West Yorkshire, with plans to expand to 70 outlets.

There were twelve restaurants by 1996, including eight company-owned and four franchise sites. Wendy’s retreated from the British market for the second time in 2000. Some of its most prominent sites were taken over by McDonald’s, including Oxford Street, Shaftesbury Avenue, York Way near King’s Cross and Briggate in Leeds. Wendy’s blamed high property and operating costs for its failure in the British market.

Wendy’s announces plans to return to Britain
Wendy’s returned to Britain in 2021, with an outlet in Reading.

Hospitality

A lot on their plate: Fatty Arbuckle’s

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Fatty Arbuckle’s was one of the largest casual dining chains in Britain during the 1990s.

Pete Shotton (1941 – 2017) and Bill Turner (died 1993), two friends from Liverpool, opened the first Fatty Arbuckle’s outlet in Plymouth in 1983. Shotton had been a member of the Quarrymen alongside John Lennon, later of Beatles fame.

Fatty Arbuckle’s was modelled on American diners, and had a retro Hollywood theme. There was a focus on large portions served on 13-inch plates. The restaurant was named after Roscoe “Fatty” Arbuckle, one of the most successful silent film actors in the 1910s.

A second Fatty Arbuckle’s restaurant was opened in Bournemouth in 1985. Adrian Lee and his wife were appointed managers of the Bournemouth restaurant.

Adrian Lee was promoted to managing director of Fatty Arbuckle’s in 1988.

Bill Turner died in 1993, and Pete Shotton acquired his stake in the business.

Each new Arbuckle’s outlet was to prove an immediate success. Franchise outlets were opened from 1991, which allowed the chain to rapidly expand to 22 restaurants by 1995. Arbuckle’s was the largest American-style restaurant chain in Britain by 1997, with 42 outlets.

Arbuckle’s, with its focus on beef burgers and steaks, was hit hard when a BSE-epidemic struck Britain in 1996. 70 percent of its sales had been burgers. Pete Shotton sold his majority stake in the business to the turnaround experts, Alchemy Partners, for £5 million.

Alchemy was widely credited with reviving the fortunes of Arbuckle’s. More profitable leisure park sites were pursued over high street locations, and the chain peaked with 58 restaurants by 1999. “Fatty” was dropped from the name in order to appeal to health-conscious diners from 2000.

After making heavy losses, Arbuckle’s entered into receivership with debts of £6.8 million in July 2000. The loss-making majority of outlets were immediately closed down.

The brand and ten outlets were acquired by the Noble House Group, headed by investor Robert Breare (1953 – 2013), for a rumoured £1 million. Breare was charismatic; a hyperactive, shambolic and disorganised man, who enjoyed the good life. He was adept at acquiring companies, but lacked managerial skill.

The ten remaining outlets were closed down in 2006. Two former managers acquired the rights to the name and opened a revamped Arbuckle’s at Downham Market in Norfolk from 2008.

The American-style restaurant is still represented in Britain by TGI Friday’s, Frankie & Benny’s and Chiquito (Tex-Mex), but other American-style restaurant chains such as Henry J Bean’s and Old Orleans have since closed down.