Friday, 19 July 2013

INSOLVENT

Jobs and other loss

I has a little time to kill this morning in the High Street, waiting around between between eye and ear tests. Looking to find some effective air-conditioning I wandered into the local Modelzone store. Modelzone is a national chain of model supermarkets.

Or it was. Greeting me at the front door was a notice from the accountancy firm Deloitte's, telling that the company is in administration, and large banners announcing 'Everything must go' and '25% and 50% off'. Inside everything was already pretty bare.

Unlike in Germany and in certain other Continental countries, the days of high-street model shops in the UK seem well and truly over. Trade has shifted to the Internet and to direct purchase from small suppliers. This is part of complex economic trends that are not of course just a matter of model shops, and affect different retail sectors in different ways.

In response to tight economics and burgeoning online trading, the whole retail sector in the UK is being reconstructed – but I do not do much 'shopping' and am therefore rarely directly reminded of the effects of this. Walking into that dying branch of Modelzone reminded me sharply of the continually heard complaint that 'the high street is now dead'.

On getting home I read that Deloitte's could not find a buyer for the complete business and has already started closing many of Modelzone's 47 stores across the country, with large numbers of staff already losing their jobs. Deloitte's has just found a buyer for the wholesale side of the business, but only 18 jobs out of hundreds will be saved.

David Mordeca, Modelzone's founder puts the failure down to the company's falling under the control of venture capitalists with over-ambitious plans for expansion. Its wholesale wing is now being bought by rival modelling company Ripmax – perhaps rather closer to the customers than to the bankers.

Maybe Modelzone did well to survive so long (it opened in 1987). It was not the first attempt at establishing a national chain of large High Street model shops. Beatties of London ended with 60 stores nationwide but overreached itself trying to break into the computer-games market. It went into liquidation in 2001, quite a few of its shops being bought by... Modelzone.

The financial collapse of Beatties brought a particular casualty of the trading of toy and model companies as commodities. In 1964 Beatties had bought the old-established model-railway company Bassett-Lowke, including the by then already historical collection of its earlier products. When Beatties went to the wall this museum-quality collection of heritage transport toys, a national asset, was incorporated into 'The Beatties Collection'. It all went to auction. 

And today in the United States the City of Detroit has filed for bankruptcy...

References

(2013) Buyer found for Modelzone wholesale arm, Wales Online, 17 July

Lowthorpe, D. (2013) Modelzone founder’s bid to buy part of business, Eastern Daily Press, 13 July
http://www.edp24.co.uk/business/modelzone_founder_s_bid_to_buy_part_of_business_1_2276911

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