The Rise and Fall of the Loyds Merchants

What goes around comes around…

Charting the rise and fall of consumer electronics retailer Loyds means unraveling a retail mystery of complex proportions. Based in North West England, the original Loyds Retailers were a subsidiary of Ada Halifax owned by Philips.

Ada (Associated Domestic Alliances) was used by Philips as a holding company and in the 1960s a number of retail and rental businesses across Great Britain and Northern Ireland joined as Ada Halifax Loyds subsidiaries.

This merged chain of around 300 outlets (mainly independent) had been owned or partly owned by Ekco, Pye or other Pye/Ekco group companies.

When Philips acquired the Pye/Ekco consortium, they added additional businesses previously wholly or partially owned by Philips or other companies they owned (with the exception of 100 Midlands stores trading as Alex Owen and Collis respectively ). .

Since a significant portion of these organizations remained part-owned, operators were able to exercise considerable autonomy and stock the branded items they preferred.

This clearly presented a cumbersome, complicated and wasteful retail scenario and Philips decided that a major rationalization was needed.

They initiated a reorganization to increase efficiency and profitability by buying outright the businesses that are still partially owned.

The next step was to develop and implement an overall rationalization plan that would include these key objectives:

1. Standard Trade Name

2. Standard Marketing Program

3. Standard Purchasing Policy

4. Standard Pricing Policy

5. Default Distribution Policy

It was around this time that I delved deeply into the second of those core goals: marketing… As a promotional agent for just one of the subsidiaries, I found myself back in the maelstrom of pre-rebranding activities, with personal responsibility for the promotional and marketing efforts Merchandising requirements of all existing outlets.

During the pre-launch phase, centrally controlled standard policies for marketing, purchasing, pricing and sales were smoothly introduced, while the subsidiaries still operated under their original names.

After much deliberation, the standard trade name was agreed to be Loyds.

The switchover happened almost seamlessly overnight on a Friday in August 1970, and champagne corks popped in the region’s offices across Britain as sales exploded in the weeks that followed.

However, the euphoria was short-lived…

A few short months later, sales fell back to pre-launch levels.

Worse, and contrary to the dictates of the rationalization master plan, spending shot out of control. In mid-1971, Philips belatedly initiated a damage control action and restructured Loyds’ management.

Accredited company doctor Len Govier was recruited from Granada and appointed chief executive.

Len quickly stabilized the ship by drastically lowering the total cost of ownership, and once the dust settled he began restoring the expansion program, bringing Alex Owen and Collis into the fold.

Their total of 100 stores were renamed Loyds in the fall of 1972…

Len Govier’s final act was to bring Philips’ retail division to the burgeoning out-of-town hypermarket bazaar, and he accomplished that by getting one of the old trademarks up and running again: this time, Eclipse.

He opened the first of these branches in Halesowen in 1972.

Despite quantifiable progress, cracks in the relationship between Len Govier and the meddling Mandarins began to appear at Philips UK headquarters in Century House London.

In March 1973, Len parted ways with Philips to start his own TV rental company.

Later that year, and in a desperate attempt to breathe new life into the ailing high street retail chain, around 50 branches that were still underperforming were restructured and rebranded as Loyds Rentals.

Again management was reorganized and the group faltered for a time, but it was becoming increasingly clear that Philips was disappointed in its retail division.

In 1975, packs of stores were sold to Currys and a program of closures was initiated for the remainder.

However, Eclipse continued to thrive and expand until finally, in 1976, Philips lost patience, threw in the towel and spun off stores in Halesowen, Glasgow, Manchester, Bristol, Cardiff and elsewhere. Buyer was Comet.

Could Philips have made Loyds a success if they had persevered?

I doubt it.

Retail and Philips have been uncomfortable bedfellows from the start…

Addendum:

I was an active participant in all of these initiatives and while Loyds was a disaster for Philips, it proved to be a godsend for me as it made my fledgling ad agency a major player. It was purchased directly by Saatchi & Saatchi in 1974 and renamed Saatchi Green.

What goes around comes around…