Category Archives: Retail

Suite success: Maple & Co

Maple & Co was the largest furniture retailer in the world.

John Maple establishes the business
John Maple (1815 – 1900) was born in Greenhurst, Sussex, the son of a small farmer. He served an apprenticeship at a general store.

Maple partnered with James Cook to form Maple & Cook, furnishers and drapers of Tottenham Court Road, London, with a capital of £500 in 1840.

Cook left the firm by mutual consent in 1847, and the business traded as John Maple & Co.

Maple managed the business on a low-margin principal. He claimed to have the largest furniture showroom in the world by 1850.

John Blundell Maple grows the business
John Blundell Maple (1845 – 1903) entered his father’s business from 1861. He was made a partner in 1867.

Hundreds of salesmen were employed at Tottenham Court Road by 1874.

John Blundell Maple had taken control of the business by 1880. A dapper, yet modest, kindly and genial man, the subsequent growth of the business was mainly to his credit. Maple had “unbounded energy, enterprise and commercial genius” according to the Leeds Mercury.  An obituary would later describe his “great shrewdness and energy, and capacity for acquiring a complete mastery of all the details of the business”.

John Blundell Maple in 1901

At J B Maple’s initiative, the firm furnished many of the great hotels and houses throughout the British Empire and Europe. One furnishing bill for a great London hotel amounted to £100,000.

Maple & Co was the largest furniture retailer in the world by 1885.

The Tottenham Court Road premises covered four acres by 1888. Maple & Co directly employed 2,051 people.

In order to meet demand, the vast majority of production was subcontracted. John Crossley & Sons, a carpet manufacturer, represented one of the largest suppliers.

Maple & Co furnished all the Courts of Europe. Most members of the British Royal Family had been supplied, including Queen Victoria.

Maple & Co becomes a limited liability company
Maple & Co was converted into a limited liability company with a capital of £2 million in 1891.

J B Maple paid for the reconstruction of University College Hospital at a cost of £120,000 in 1896.

John Maple died with an estate valued at £892,503 in 1900.

3,000 people were employed at the Tottenham Court Road premises by 1903. The Daily Mail commented that Maple goods furnished “half the palaces of Europe, and the bulk of the best modern mansions in Great Britain”.

John Blundell Maple died in 1903. He ranked as one of the richest British businessmen of his era, and his estate was valued at £2.2 million. Maple had been a generous philanthropist throughout his life.

An Argentinian subsidiary was established in 1906.

Subsequent owners and demise
Maple & Co was acquired by Macowards of Cardiff for £14.4 million in 1972. That year the Tottenham Court Road head office and flagship store was closed for redevelopment. The resulting fiasco saw shares plummet to ten percent of their 1972 value by 1977.

There were 45 British and two French stores in 1977.

Maple & Co was acquired by Waring & Gillow, a furniture retailer, for £9.7 million in 1980.

Waring & Gillow was acquired by Asda, a supermarket chain, in 1989. Maples was subject to a management buyout in 1993.

Maples entered into receivership in 1997, a result of high debts and poor trading. The company targeted the upper mass market, and had 24 stores including nine larger out-of-town sites, and a staff of 340.

The Tottenham Court Road location was acquired by Furniture Village. Eight stores were sold to Allders.

Thomas Furness & Co

Thomas Furness & Co was one of the largest grocers and provisions merchants in Britain.

John Furness (1808 – 1885) was a coal trimmer from Boroughbridge, Yorkshire. He married the daughter of a colliery owner, Averill Easter Wilson, and established a grocer’s shop in Hartlepool in 1850.

His son, Thomas Furness (1834 – 1905), served apprenticeships in Stockton and Manchester before opening his own grocery business on Church Street, Hartlepool in 1854. In 1861 the business employed two men and one boy. It was normal for grocers to work 90 hours per week.

A trade was soon established between Hartlepool and wholesalers in Denmark and Sweden. This venture was to prove immensely profitable.

In 1870 his brother Christopher (1852 – 1912) joined the firm as a sales representative. He was made partner in 1872.

Christopher Furness (1852 – 1912) in 1902

In 1877 the firm bought its own ships. By 1878 the firm had become the first in the North East of England to directly import produce from America, initially with Boston, and also later New York.

Christopher left the partnership in 1883, in order to develop the shipping side of the business.

John Furness died in 1885, and his Northern Daily Mail obituary hailed him as “one of the fathers of West Hartlepool”.

Thomas Furness was a Methodist and a temperance advocate. A staunch Liberal, in 1891 he became the first native of the borough to become Mayor of Hartlepool. He was not considered a particularly gifted man, but he was hard-working, conscientious and shrewd.

By 1891 the business was one of the largest provisions merchants in Britain.

In the mid 1890s the firm acquired the Shipowners’ Stores Supply Association of London.

In 1895 the firm was established as a limited company called Thomas Furness & Company’s Stores Ltd, with a capital of £200,000. Sir Christopher Furness was chairman of the directors, and Thomas and John Thomas Furness (1861 – 1932) were joint managing directors.

By this time the firm had offices at West Hartlepool and Newcastle upon Tyne, and shops at West Hartlepool, Darlington, Stockton, Saltburn, Thornaby and Richmond. In 1899 a branch was opened at Castleton, North Yorkshire.

In 1897 the firm established a small manufacturing arm called Northern Counties Manufacturing Co. Based at Mainsforth Terrace, it produced jams, cakes and biscuits. Plant, machinery and edifice cost £15,000.

Thomas Furness & Co sales in 1902 were a “disappointing” £477,116.

In 1903 James Newton Reid (1876 – 1923) of Liverpool joined the firm, which from 1909 began trading as Furness Brothers & Reid.

Thomas Furness died in 1905 and his estate was valued at £26,478.

Northern Counties Manufacturing Co was liquidated in 1908. The Castleton branch closed in 1909.

J T Furness’s only son, Guy Haswell Furness (1887 – 1952) was placed in charge of the business.

In 1924 Furness Brothers & Reid was entered into voluntary liquidation.

Cash cow: Maypole Dairy

Maypole Dairy was easily the largest retailer in Britain by 1913.

The Watson brothers and George Jackson
George Watson (1861 – 1930), Charles Henry Watson (1863 – 1927) and John Alfred Watson (1865 – 1931), were brothers born just outside Coventry to a prosperous farming family. They served as apprentices and later as assistants to George Jackson, a Birmingham dairy merchant.

Jackson had pioneered the sale of pure dairy butter at affordable prices by importing the product directly from Danish farmers. Jackson sold 30,000 tons of butter every year by 1893, and was the largest retailer of butter in the world.

Establishment of Maypole Dairy
Jackson’s strong reputation for butter meant that he was reluctant to branch out into margarine, which although gaining in popularity, was hampered by a downmarket image. However George Watson was free to take the chance, and he established the Maypole Dairy Company, with a margarine shop in Wolverhampton, from 1887. He was soon joined by his brothers, and outlets were opened across the Midlands. The shops also began to sell cheese and butter.

Maypole Dairy was a high volume, low margin business, and outlets were concentrated in working class areas.

Charles Watson was largely responsible for the expansion of the Maypole chain into Lancashire and Yorkshire.

George Watson introduced a profit-sharing scheme for management from 1890. Shortly afterwards, in a pioneering move, the scheme was extended to all employees.

Maypole Dairy was the largest retailer of margarine in Britain by 1895. The business had 60 shops, eight creameries in Ireland and one in England, and purchasing offices in Denmark and Sweden.

Maypole merges with George Jackson
Maypole and George Jackson underwent a merger in 1898, and the company was incorporated with a share capital of £1 million. George Watson became chairman. The company had 185 retail shops and 17 creameries.

Maypole acquired a margarine factory in Godley, Manchester, from Otto Monsted Ltd, a Danish company, in 1902. It was capable of producing 200 tons of margarine every week.

Maypole had 560 retail shops by 1908, and was the largest retailer of tea, butter and margarine in the United Kingdom.

maypoles-dairy-shop-in-lynn-stret_large
A Maypole Dairy Store in Hartlepool

Maypole reported a net profit of over £550,000 (£425 million in 2015) in 1912, of which all but £50,000 was distributed among shareholders as a 212.5% dividend.* By this time there were 712 stores across the United Kingdom, and the leading lines were margarine and tea. That year, George Watson was appointed a baronet.

Maypole was the largest retail chain in Britain by a substantial margin by 1913, with over 800 shops.

Maypole, and the Dutch producers Jergens and Van den Bergh produced most of the margarine sold in Britain, with Maypole producing almost as much as the other two combined by 1913.

The Manchester margarine factory was sold to Lever Brothers in 1914.

Maypole acquired Otto Monsted’s margarine factory in Southall, Middlesex, and an edible oils refinery in Erith, South East London in 1915. The Southall factory covered 22,500 square yards, employed around 650 people and was the largest margarine factory in the world. It had a weekly output of 700 tons of margarine.

southall
The Southall factory

Maypole margarine differed from competitors in that it was produced from tropical nuts and seeds rather than animal fats. Maypole established a groundnut operation in West Africa to provide raw material for margarine production in 1915. 25,000 to 30,000 tons of groundnuts were produced annually by 1919.

Maypole dominated the sale and manufacture of margarine in the United Kingdom, with a 50 percent market share by 1918. The Southall site produced over 2,000 tons a week. Margarine accounted for 85 percent of Maypole sales.

maypoleinterior
The interior of a Maypole Dairy shop

Acquisition by Home & Colonial
Maypole capital amounted to £3 million (equivalent to just under £1 billion in 2015) in 1919. Turnover exceeded £36.5 million (£13.8 billion in 2015) in 1921.

However shortly afterwards the company began to struggle with increased Dutch competition and the failure of its West African business. Six directors retired in 1924, including the chairman, George Watson, and they sold their stakes to Home & Colonial. Now the majority owner, Home & Colonial was itself controlled by Jurgens.

Maypole increased its product lines to include jam, marmalade and lard from 1925. In 1928 biscuits were added, and cheese was re-introduced in packaged form.

Maypole is absorbed into Unilever
Maypole had over 1,040 retail outlets and a total capitalisation of over £9 million by 1929. That year, Jurgens and Van den Bergh merged with Lever Brothers of Britain to form Unilever. Maypole was now contractually obliged to purchase all of its margarine from Unilever. The Maypole manufacturing site at Southall was rendered redundant by the Unilever purchase, and was re-appropriated for the production of Wall’s sausages and ice cream. The Erith refinery was also closed.

Unilever created a holding company for its grocery chains; Lipton, Home & Colonial and Maypole Dairy, called Allied Suppliers, in 1930. Allied Suppliers had a capital of £13.3 million, and was the largest grocery retailer in the world. Each retail company continued to be run independently, but there was co-operation in wholesale acquisitions and distribution.

George Watson died in 1930, leaving an estate valued at over £2 million (about £805 million in 2015).

Maypole’s West African venture was sold to the United Africa Company, which was controlled by Unilever, in 1931.

Maypole sold over 200,000 eggs in 1938.

There were 977 Maypole stores and 6,334 employees in 1939. Rivals such as Tesco, which utilised bulk purchasing from suppliers, began to challenge the vertical integration model practised by Maypole.

By 1943 all but two company directors, and practically all senior executives, were men who had started at the bottom ranks of the company and worked their way up.

Faced with continued rationing after the war, Maypole began to extend its product range to include additional staples such as bacon from 1947.

The Maypole name is phased out
The independent management of Maypole ended in 1964. The Maypole name was phased out in the 1970s, when increased competition from supermarkets saw Allied Suppliers decide to concentrate on their Home & Colonial brand. Allied Suppliers eventually morphed into Safeway (UK), and the rights to the Maypole brand are now owned by Morrisons Supermarkets.

Unilever continued to hold a 30 percent share of the global spreads market, until the divested their spreads unit in 2017.

* Currency conversions are calculated by measuring wealth relative to the total output of the economy at the time. All calculations are from measuringworth.com

Meat the House of Vestey

Vestey Brothers was the largest meat retailer in the world.

The company controlled one third of the refrigerated storage capacity in Britain and two thirds of multiple butchers shops. It accounted for 20 percent of all meat imported into Britain.

The Vestey family became the wealthiest in Britain, after the Royal Family.

Origins and early growth
William Vestey (1859 – 1940) and Edmund Hoyle Vestey (1866 – 1954) were born to Samuel Vestey, a Liverpool provisions merchant.

William Vestey was sent to Chicago to scout for opportunities in 1876. He was surprised at the amount of meat that was wasted, and a factory was established to can this surplus as corned beef and export it to Britain.

William Vestey
William Vestey (1859 – 1940)

William Vestey relocated to Argentina in 1890 where he utilised the new refrigeration process to export frozen partridges. Later, beef and mutton were added. Being among the first to realise the potential of the new technology gave Vestey Brothers an advantageous head-start on its rivals.

Vestey Brothers established Union Cold Storage as a subsidiary from 1897 to handle their meatpacking and distribution network.

Vestey Brothers began to import eggs and chicken from China from 1906. Eggs had previously had poor availability, and Vestey’s low-cost frozen egg mix was a major factor in the subsequent growth of catering companies such as J Lyons.

Vestey built up its own fleet of refrigerated vessels, Blue Star Lines, from 1909.

The First World War
The business grew rapidly during the First World War, following a surge in meat prices.

Vestey Brothers acquired ranches and freezing works in Brazil, Argentina and Venezuela between 1913 and 1920.

Blackfriars Lighterage & Cargage Co was acquired in 1914, to give full control over distribution in London.

Six million acres of land in the Australian interior were acquired during the First World War.

The Vesteys relocated their business from Britain to Buenos Aires in 1915 in order to avoid income tax, which had been increased in order to fund the war in Europe.

During the First World War, Vestey Brothers provided cold storage facilities free of charge for British supplies at Havre, Boulogne and Dunkirk.

Inter-war period
Vestey Brothers had operations all over the world, and a capital of over £20 million by 1919. It was one of the largest British industrial concerns, and larger than all the other British freezing and cold storage companies combined. In meat-packing, only the American concerns of Armour and Swift were larger.

Vestey acquired £7 million of beef from the British government in a single deal in 1920. Also that year, Eastmans Ltd, with a chain of butchers shops in Britain, was acquired.

Union Cold Storage was the largest cold storage company in the world by 1920, with a share capital of £4,780,000. The Blue Star Line was the largest refrigerated fleet in the world.

William and Edmund became so rich that they didn’t live off the interest of their wealth, but the interest of the interest. William was raised to the peerage in 1922.

Union Cold Storage spent £4 million to acquire the subsidiaries of the Western United Investment Company in 1923. This included the British Argentine Meat Company, James Nelson & Sons and Fletcher’s butchers shops.

Vestey Brothers acquired the Liebig company’s freezing facility at Fray Bentos in Uruguay in 1924.

Vestey Brothers was the largest retailer of meat in the world by 1925, with a chain of 2,035 butchers shops in Britain. Vestey was responsible for 25 percent of the meat that was exported from South America.

Union Cold Storage employed over 30,000 people, with a capital of £9.6 million, in 1925. It had over 450,000 cattle on ranches in Australia, South America and South Africa. The company handled 20 percent of Britain’s frozen meat imports, and operated a third of the country’s cold storage capacity.

Vestey Brothers opened a new refrigeration plant in Buenos Aires, Argentina in 1927. With an annual capacity of 1.5 million cattle and 2.5 million sheep, it ranked among the largest in the world. The plant employed 3,000 people.

Vestey Brothers acquired the William Angliss & Co meatpacking company of Australia in 1934.

Deaths of the founders
William Vestey conservatively valued Vestey Brothers at over £90 million in 1940. The family became the richest in Britain, after the Royals.

William Vestey died in 1940, and was remembered as a modest and benevolent man. During the height of the Blitz he had continued to put in a full working day in London.

Edmund Vestey never retired. He collapsed at his office desk in 1954 and died the following day. Remembered as a shy and reticent man, he left an estate valued at £737,738.

The latter half of the twentieth century
The company retained its position throughout much of the rest of the century. In 1968 it was still the largest cold storage operator in Britain, and had also become a leading supplier of chicken. It remained on par in terms of scale with Armour and Swift.

A tax avoidance scheme operated by the Vestey family was revealed in 1980, to public outrage.

Vestey Brothers was considered to be the largest privately owned multinational in the world in the 1980s. It was the largest retailer of meat in the world.

6739_DEWHURST-BUTCHER

Vestey sold off five of its seven North Australian ranches in 1984. Before the sale it had been the largest private landowner in Australia. After the sale it still raised about ten percent of all cattle in the country.

Speculation on the property market saw Union Cold Storage hampered by short term debt of £423 million by 1991.

Vestey announced it would close 600 of its 1,000 Dewhurst butchers shops in 1992. The chain had been adversely affected by the growth of the supermarkets.

Both Dewhursts and Union Cold Storage entered into administration in 1995. 213 of the Dewhurst shops were saved by a management buyout. The remnant Australian estates were sold off in 1996. The Blue Star Line was sold to P&O Nedlloyd for £60 million in 1998. The sale of the fleet allowed the group to finally re-emerge free of debt.

Vestey Group continues to trade today as a smaller organisation, focused on the sourcing, distribution and processing of meat. The Vestey family are still wealthy: they ranked 160th on the Sunday Times Rich List 2015, with an estimated fortune of £700 million. Actor Tom Hiddleston is a direct descendant of Edmund Vestey.

The rise and fall of Marks & Spencer (1955 to 2019)

Read part I of my history of Marks & Spencer here.

Marks & Spencer employed 28,403 people in 1955.

Marks & Spencer was valued at £435 million by 1963, which made it the fifth most highly valued stock in Britain. This value had risen to £615 million by 1970. Marks & Spencer overtook Woolworth as Britain’s leading retailer in terms of both sales and profits in 1968.

Marks & Spencer employed 37,094 people in 1972, placing it just outside the top 50 employers in Britain. The company enjoyed a turnover of £360 million and employed capital worth £160 million in 1973.

Marks & Spencer began to sell frozen food from 1972. Convenience food was being sold at 100 stores by 1973.

Marks & Spencer began to look overseas for growth from the early 1970s. The company acquired a 50 percent stake in three Canadian clothing retailers in 1973. A controlling interest was acquired three years later.

A store was opened in Paris in 1975. This store ranked among the company’s top ten worldwide in terms of sales and profitability by the mid-1990s.

M&S, valued at US$3.7 billion, had the fifth highest market capitalization of any public company in Europe by 1982, and sales of just under £2.2 billion.

The first non-family member was appointed as chairman and chief executive in 1984.

The first location outside a town centre was opened in Gateshead in 1986.

The company made two American acquisitions, Brooks Brothers, the clothing retailer, and Kings Supermarkets in 1988. Brooks Brothers cost Marks & Spencer $750 million, and included 47 stores.

Marks & Spencer operated 275 stores in Canada and eight stores in France by 1990. That year the company opened its first store in Spain.

Marks & Spencer employed 55,750 people by 1992. It was the twentieth largest company employer in Britain.

Marks & Spencer was the only retailer in the world with a AAA credit rating in 1994. The retailer had a reputation for quality and value for money. It boasted a turnover of over £5 billion and 679 stores.

Profits took a sudden slump in 1999. Excessive profit margins had eroded customer loyalty. The company withdrew from Canada that year.

Marks & Spencer announced a radical restructuring of its operations in 2001. The UK business was revamped and its US retail operations and company owned stores in Europe were divested. Brooks Brothers was sold for $225 million, less than a third of what M&S paid for it thirteen years previously.

Marks & Spencer was relegated from the FTSE 100 in September 2019.

News to me: W H Smith

W H Smith is a British retail chain. It sells items such as newspapers, magazines, books and stationery.  It had almost 1,300 branches, a turnover of over £1.1 billion and just under 15,000 employees in 2013.

Henry Walton Smith (1738 – 1792) established a news stand on The Strand, London, in 1792. Smith died just a few months later and was eventually succeeded by his son, William Henry Smith. The business became involved in distributing newspapers throughout the provinces.

W H Smith opened his first railway station bookstall at Euston in 1848. Railways were the booming industry of the period. W H Smith had bookstalls on all the major railway lines, and many secondary lines, by the 1860s. W H Smith and its main newsagent rival John Menzies, were the first large-scale retail chains to emerge in Britain.

The business became a partnership when William Henry Smith was joined by his son, William Henry Smith II.

The Smith’s bookstalls became a national symbol in Victorian England. Annual turnover had surpassed £1 million (c. £115 million in 2014) by 1888.

Inevitably, the railway companies became greedy and began to demand extortionate rents from the highly profitable news stands. Smith’s realised that its bookstalls received about half of their business from non-train users. Worried about its dependence on the railway companies, Smith’s began to open stores on high streets from 1905.

8,285 people were employed by 1911. In 1914-5 turnover topped £2 million (c.£200 million in 2014), and reached £4.2 million (c. £220 million) by 1924-5.

W H Smith opened their first branch overseas in Paris in 1903. Brussels followed in 1920 and in 1936 the Queen Mary liner got its own branch.

In 1929 the partnership was registered as a private limited company in order to pay the death duties of Freddy Smith.

By 1933 Smith’s had 48 wholesale branches, 311 bookshops and 1,400 bookstalls. The company employed around 13,500 people and was one of the single largest employers in the country.

By 1947-8 turnover was £10.4 million (£355 million). In 1948, W H Smith was valued at £9.75 million. William Smith, 3rd Viscount Hambleden, died that year, and his stake in the company was valued at £8.2 million. Smith’s was forced to go public in 1949 in order to fund the 75 percent death duty owed to the government.

The Canadian market was entered in 1950, when the first shop opened in Toronto.

In 1955, 18,104 people were employed at the company.

In 1951 there were 944 railway stalls, but by 1971 this number had fallen to 319. This reflected a trend towards high street outlets, which were larger and more profitable. In the 1960s outlets of  a previously unprecedented size were opened in Bradford, Brighton, Stockport and Nottingham.

Smith’s ran a private library service until 1961. It was never particularly profitable, but the company reasoned that it attracted visitors to the stalls, who often bought other items. Lower book costs and the rise of the public library spelled the end for the venture. However, the loss of the library trade was more than made up for by Smith’s taking on gramophone records and cassette tape sales.

Smith’s employed capital of over £21 million in 1965 (around £365 million in 2014). By 1966 the company had 19,547 employees.

In 1992 the W H Smith Group employed 29,320 people worldwide, including around 26,000 in the UK.

Today, around half of Smith’s units are in “travel” locations (railway stations, airports, motorway services) and half are located on high streets.

Smith’s had almost 1,300 branches, a turnover of over £1.1 billion and just under 15,000 employees in 2013. There were over 1,700 stores by 2020, mainly driven by international growth.

The rise of Marks & Spencer (Part I)

Marks & Spencer is a British retail chain specialising in clothing and food.

Marks & Spencer’s origins date to 1884, when Michael Marks, a Russian-Jewish immigrant, set up a “Penny Bazaar” in the Kirkgate open market in Leeds, Yorkshire. Marks sold haberdashery goods, and no item cost more than one penny.

Marks soon opened a stall in Leeds’ covered market, which was open seven days a week. Outlets were soon opened in the booming cotton towns, such as Warrington, Birkenhead and Wigan.

Marks & Spencer Penny Bazaar in Cardiff
Marks & Spencer Penny Bazaar in Cardiff

The steady expansion of the business saw Marks recruit Thomas Spencer, a cashier, as a partner in 1894. By 1901 there were 12 shops and 24 stalls in covered markets.

In 1903 Spencer retired, and Marks & Spencer became a limited liability company.  Marks died in 1907, and his son Simon took over the business, which now boasted over 60 retail outlets.

In the 1920s, Simon Marks noted the rapid growth of the low-price Woolworth chain. In 1924 he undertook a fact-finding mission to the US. What he learned there was to revolutionise the business.

Marks cut out the wholesaler, and decided to deal directly with manufacturers. On the basis that it was the merchant rather than the manufacturer who knew the customer best, Marks & Spencer would design its own clothing and goods, and then find a contractor who could produce to the specifications and cost.

The First World War put an end to the penny pricing system, but in 1924 a new 5 shilling price-ceiling was introduced.

By 1926, Marks & Spencer had 125 stores, and floated on the stock exchange to fund further expansion. That year, Marks was joined by his brother-in-law, Israel Sieff, as joint managing director.

By 1935 Marks & Spencer employed 11,555 people, placing it as the 55th largest employer in Britain.

Opening new stores, and the redevelopment of existing stores, allowed Marks to reposition the company from a working class market to a classless one. By the mid 1930s, M&S had repositioned itself so that Woolworth was no longer a competitor. Symbolically, a state-of-the-art outlet was opened on Oxford Street, London, in 1938.

The company began to concentrate on clothing, which accounted for two thirds of sales by the 1930s. By 1938, 80 percent of sales were of clothing, and 20 percent were in food. The company began to position itself inbetween the value stores and the department stores. By 1939 the company was able to boast that 92 percent of its goods were manufactured in Britain.

Roaring trade: a history of J Lyons (1894 – 1945)

J Lyons had become the largest catering business in the world within 30 years.

J Lyons is established, and the first tea rooms are opened
Barnett Salmon (1829 – 1897) and Isidore Gluckstein (1851 – 1920) established a successful chain of tobacconists.

Montagu Gluckstein (1854 – 1922), a salesman for the firm, lamented the poor state of catering at trade exhibitions. He suggested that Salmon & Gluckstein enter into the business of non-alcoholic refreshment. A trial was established whereby the business catered for the Newcastle Exhibition of 1887. Contracts for other exhibitions soon followed.

J Lyons & Co was established as a public company with a capital of £120,000 in 1894, in order to pursue catering further. The Lyons name was adopted to distinguish the company from the Salmon & Gluckstein business. The original stakeholders were Montagu Gluckstein, his brother Isidore Gluckstein, brother-in-law Barnett Salmon (maternal grandfather to Nigella Lawson) and distant relative Joseph Lyons. Montagu Gluckstein was the de facto chairman of the business.

The first Lyons tea shop opened in September 1894 at 213 Piccadilly. It had 200 seats and a £30,000 lease. After a year the shop had made a profit of £11,400, and the company was able to pay a dividend of ten percent.

The first Lyons Tea Room was sited at 213 Piccadilly
The first Lyons Tea Room was sited at 213 Piccadilly

The early tea room exteriors were enticing and extrovert, and the interiors were often glamorous, and intended to evoke the great Victorian exhibitions and Parisian cafes.

The Lyons tea shop girls went on strike in protest against low wages in 1895.

J Lyons establishes Cadby Hall
Cadby Hall was opened in Hammersmith to centrally produce baked goods for the company’s 17 tea shops from 1896. There were 37 tea shops in London by 1900, and expansion had begun in the provinces, with six branches in Manchester, four in Liverpool, and two in both Leeds and Sheffield.

Quality was good and prices were reasonable. The tea rooms were particularly popular throughout the daytime with lower middle class office workers. Cinema and theatre-goers patronised the chain on evenings.

The first Lyons Corner House was opened on Coventry Street in 1909. The Corner Houses were much larger than the tea rooms, with a greater appeal to the middle classes. Live bands and an informal atmosphere helped to cement their popularity. The Coventry Street outlet became the Lyons flagship outlet, and seated 2,000 diners on multiple floors. It was the largest restaurant in the world. A second Corner House, capable of seating 1,200 diners, was opened at the Strand in 1915.

J Lyons was one of the largest caterers in the world by 1911. Half a million meals were served every day through 200 shops and restaurants. The company employed over 12,000 people, including 2,000 people at Cadby Hall. The Cadby Hall works covered ten acres and included sixteen bakehouses, five cold storage rooms and three butchers’ shops.

20,000 people were employed by 1913. J Lyons was the largest baker in London, the largest tea merchant in the world and the largest restaurant operator in the world.

J Lyons dismissed all naturalised German and Austrian employees from its staff in 1914.

J Lyons also expanded into hotels, building the Regent Palace Hotel in London at a cost of £600,000. Opened in 1915, it was the largest hotel in Europe, with 1,028 bedrooms.

Lyons tea was far and away the market leader by 1915: five million packets were sold every week by 160,000 shopkeepers. The company accounted for one in four cups of tea sold in London.

Lyons had a capital of over £2 million by 1917.

Tea, coffee, bread, cakes, ice cream and groceries which had originally been produced for the tea rooms began to be sold directly to the customer, all manufactured at the company’s Hammersmith site.

In 1918 Lyons acquired two leading packet tea companies, positioned second and fourth place in the market respectively: Horniman of London and Black & Green of Manchester. The acquisitions were intended to increase Lyons’s market share in the North of England: Horniman was strong in Yorkshire and G&B strong in the North West.

The company had a share capital of £3.5 million by 1919. By this time Lyons was likely the largest catering company in the British Empire. There were 182 tea shops by 1919, making it easily the largest chain of its kind in the country.

Largest caterer in the world; Greenford plant is established
Cadby Hall was struggling to meet demand by 1919, so Lyons acquired a 30-acre freehold manufacturing site at Greenford, on the outskirts of London. Lyons opened the largest tea packing plant in the world there in 1920. Coffee, cocoa and confectionery production were also transferred to Greenford. It was the sixth largest manufacturing site in Britain.

J Lyons was the largest catering business in the world by 1921. Cadby Hall boasted the largest bakery in the world.

The Trocadero Restaurant was acquired in 1921.

There were over 22,000 employees by 1922. There were 160 Lyons tea shops in London, and a further 50 throughout Britain.

It was calculated that seven million people drank Lyons tea each week in 1922.

Lyons began construction on the Cumberland Hotel at Marble Arch, the largest hotel in Europe, in 1922. It had 1,500 rooms and a Corner House.

The Coventry Street Corner House was extended in 1923 to create what was likely the largest restaurant in the world, with seats for 4,500 diners. It also boasted the largest chocolate shop in the world. It was open 24 hours a day.

An interior view of the Lyons Corner House on Coventry Street in 1942

Ice cream manufacture at Cadby Hall had reached the mass production scale by 1923.

Lyons was the 20th largest company in Britain by 1930, with a market value of £12.1 million and 30,000 employees. It was the largest catering company in the world. Over ten million meals were sold each week. Lyons held 14 percent of the packet tea market, with over 1.25 million packets sold every day. 600,000 Swiss rolls were sold every week.

The teashop chain continued to grow strongly until the onset of the Great Depression. Teashop losses between 1934 and 1938 totalled £374,000. Despite this, due to its manufacturing and hotel concerns, the company remained the largest catering company in the world in the latter half of the 1930s.

Lyons directly employed over 42,000 people by 1937.

Lyons produced 3.5 million gallons of ice cream in 1939.

Lyons had 253 tea rooms by 1939. Due to wartime labour shortages, self service was introduced to the tea rooms from 1941, and rolled-out across the chain from 1945.

Part II of this post can be found here.

A slice of history: Bakers Oven

Bakers Oven was the largest bakery chain in the UK, before it was overtaken and then acquired by Greggs.

Greggs is a fast food chain with more outlets in Britain than McDonald’s. Specialising in value and convenience, outlets sell sandwiches, but remain best known for “treat” food: sausage rolls, pasties, vanilla slices etc.

Greggs’ dominance in the UK was established when it acquired Bakers Oven, its major rival bakery chain, in 1994. Bakers Oven was about 20 percent more expensive than Greggs, had more of a focus on in-store “baking” and typically offered substantial seating, which Greggs usually lacked.

Bakers Oven
Bakers Oven was a concept developed in 1976 by one of the largest British bread makers, Allied Bakeries, itself a subsidiary of Associated British Foods, owners of Twinings, Silver Spoon sugar and Ryvita. Allied Bakeries also owned other bakery chain fascias, with names such as City Bakeries, Martins and Strathdee, and boasted of operating a store on almost every British high street. ABF owned many prime high street sites; a legacy of local bakery chain acquisitions. They had first attempted to create a nationwide bakery chain in 1968 with the Lite Bite shops.

The claim that the first Bakers Oven was located in Barnard Castle, Durham is untrue. The location was previously operated by Carricks, a Newcastle upon Tyne bakery chain. and it was not rebranded to the Bakers Oven name until 1989.

Bakers Oven rode the rise in demand for healthier bread in the late 1980s, although it never matched the quality of genuine bakers’ produce. It became the largest bakery chain in the UK, however by the early 1990s it had began to consistently lose money. After 100 stores were divested, Bakers Oven blamed the rise of supermarket bread sales for its struggles (ignoring the fact that Greggs continued to grow).

The UK’s third largest bakery chain, Three Cooks, was also owned by a large British bread manufacturer, RHM (formerly Rank Hovis McDougall). The acquisition of Gladdings of Coventry took RHM to 300 outlets by the early 1990s.

Greggs differentiated from its two major rivals in being publicly listed from the 1980s onward, whilst maintaining a large family-owned stake.

A Bakers Oven Outlet in Willenhall in 1995
A Bakers Oven Outlet in Willenhall in 1995

By 1993 Bakers Oven operated over 500 shops and employed over 5,000 people.

Greggs acquires Bakers Oven
In 1994 Greggs acquired Bakers Oven, with 424 stores and two main bakeries, for £18.5 million in cash. This took Greggs to a total of 929 outlets. Greggs was interested in expanding into the South East, where the majority of Bakers Oven outlets were based. Greggs was strongest in the North, particularly the North East, where it had a 40 percent market share in some areas. Greggs was also interested in learing about in-store baking and seated catering from the chain. As a combined group, Greggs was able to lower central buying costs and increase profitability. Greggs also announced plans to lower the pricing of Bakers Oven, which it regarded as excessive.

By 1995 Greggs had steered Bakers Oven into profitability by decreasing the focus on sliced white bread (in which they were undercut by supermarkets) and emphasising higher margin items such as sandwiches, savouries and pastries.

By 1996, 241 Bakers Oven outlets had been converted to the Greggs brand, mostly the units without in-store bakeries and seating and in less desirable locations. The Greggs model was to drive high volume value sales. However, new Bakers Oven outlets continued to be opened, and the chain was regarded as the company’s “premium brand”. In the late 1990s the chain was revamped, and items such as filter coffee and salad rolls were added to the menu.

By 2004 there were only 220 Bakers Oven outlets remaining. By 2006 the brand had been withdrawn from Scotland and the North of England, with all former outlets converted to Greggs. In December 2008 it was announced that the remaining 163 Bakers Oven outlets would be rebranded as Greggs.

Demise of W H Smith?

Dowdy, tatty, dirty and unloved stores that increasingly resemble a jumble sale, unmotivated staff and not even good value for money. It sounds like the former Woolworths chain but I was actually describing W H Smith.

Commentators have increasingly singled it out as the next potential High Street victim for closure, as shoppers increasingly gravitate towards out of town sites and online. However, I think predictions of its imminent demise are overblown.

The travel concessions (airports and train stations) are really profitable for the chain. And why not? They’re useful for travellers and the lack of competition and impulse buy nature of the sites mean that they can command high prices with healthy margins.

The high street shops have several USPs:

1. Trashy, mass market books. Better coverage than Waterstones and the supermarkets. These impulse buys will not gravitate online.

2. Really comprehensive magazine stocking.

3. Stationery. Unless there is a Rymans nearby, there are few competitors. And people don’t buy stationery online.

4. Cards. Again, Smith’s may be more convenient if there isn’t a Clintons nearby.

5. Toys and games are always useful.

6. Impulse buys like drinks and snacks will always sell.