T J Hughes

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TJ Hughes
Type Private
Industry Retail
Genre Department Store
Fate Administration
Founded 1912
Founders Thomas J Hughes
Headquarters Liverpool
Number of locations

11

Locations at Height 57
Products Home Furnishing, Menswear, Woman's wear, Fragrance, Electricals, Toys
Revenue Increase£266.7 million (2010)[1]
Operating income Increase£9.3 million (2010)[1]
Profit Increase£6.8 million (2010)[1]
Owners Lewis's Home Retail Ltd
Employees 950 (October 2014)
Website http://www.tjhughes.co.uk
TJ Hughes shop in Liverpool

T J Hughes is a British discount department store brand which first emerged in Liverpool in 1925 and had become a national chain with 57 shops by 2011. The business now consists of 11 shops around the country, following liquidation and rescue in 2011.

History[edit]

Thomas J Hughes set up a small shop on Liverpool's London Road. The store had a few assistants and Thomas J Hughes was the main shopkeeper, overseeing everything within the business. In 1925 the large department store group Owen Owen saw the need to move out of their Audbrey House site on London Road into the new centre of Liverpool at Clayton Square. The building was put up unsuccessfully for sale. The then-chairman of Owen Owen, Duncan Norman, went to see the T J Hughes shop.

Norman was so impressed that he agreed to let Hughes run and expand his business in Audbrey House for part-ownership of the business under Owen Owen. T J Hughes then became a department store. The business was expanded by Owen Owen until being sold in the 1980s. Owen Owen later went on to purchase Lewis's, another Liverpool department store. The company floated on the London Stock Exchange in 1992. It was later acquired by JJB Sports in 2000 for £42 million, before being sold again in a £56 million buyout backed by PPM Capital in 2002.[2] During the 1990s and 2000s TJ Hughes had taken over a number of premises formerly occupied by other retailers including Allders (Ipswich), C&A (Glasgow and Hull), House of Fraser (Sheffield & Eastbourne) and various Co-operative Group societies (Warrington, Bradford, Doncaster and Crawley).

After several years of static store numbers, expansion picked up again with three new outlets opened during 2009-10 and a further four opened in the first ten months of 2010-11. A number of the openings were in locations left vacant by Woolworths. TJ Hughes refuted press speculation that it was looking to develop a 200-strong chain.[citation needed]

TJ Hughes was sold to Endless, a turnaround specialist, for an undisclosed sum in 2011, the 13th company in Endless' portfolio. Endless bought TJ Hughes from Silverfleet Capital, which had controlled the firm since 2003. The sale followed reports that TJ Hughes had been hit by the withdrawal of credit insurance for its suppliers after a battle to secure working capital. TJ Hughes had grown by around 20 stores since its acquisition by Silverfleet Capital in 2003.[3]

On Monday 27 June 2011, TJ Hughes Limited announced that it intended to go into administration. TJ Hughes officially entered administration on Thursday 30 June 2011 with Ernst & Young appointed as administrators putting 4000 jobs at risk.[4] The company launched a closing down sale, with "1000's of items reduced" in a bid to reduce stock levels.[5]

Six of the 57 TJ Hughes stores were bought out of Administration by Lewis's Home Retail Ltd (Part of the Benross Group). The remaining six stores will continue to trade under the TJ Hughes brand name. The company's online story relaunched in October 2011. The Benross group hope to bring the brand back to its former glory.[6]

Sales strategy[edit]

TJ Hughes shop in Sheffield

In December 2005, T J Hughes launched an online store through ebay, with ebay claiming that the retailer was the first in the UK to sell its main products through the auction site. The store launched with 110 lines including DVD players, digital cameras and perfumes. T J Hughes said its eBay shop represented an opportunity to increase sales and brand awareness.[7]

One of the retailer's advertising tactics was to feature relatives of famous celebrities in their advertisements. For example, they used Manchester United F.C. player Wayne Rooney's brother Graeme Rooney as part of an advertising campaign.[8] During 2007 the company unveiled its largest advertising campaign to date. This featured celebrities’ family members, with recruits to the campaign including Carol Vorderman’s mother, Jonathan Ross’s mother and Robbie Williams’ father. The aim of the somewhat unusual series of ads was apparently to eschew passing on the costs of celebrity endorsement to customers which TJ Hughes claims is the case for a number of its competitors.

Online[edit]

TJ Hughes was a late runner in the e-commerce era, establishing an information website for investors and customers in 1999/2000. Although a new site was launched in 2004 this continued to offer only basic information such as current offers and store locations. In spite of this, the company reported that this site received some 17,000 hits a month, which prompted them to look at the introduction of e-commerce. This was introduced on a trial basis in the run-up to Christmas 2005 and offered 150 seasonal gifts and homewares lines. An encouraging performance resulted in the trial being extended, with the company subsequently increasing the range of merchandise offered online, and by 2011 the company offered an extensive range of products on its website. The TJ Hughes website, designed by local digital agency YOMA,[9][10] is currently ranked 108,004 worldwide and 5,237 in the United Kingdom according to Alexa.[11]

Financial success[edit]

TJ Hughes shop in North Lincolnshire

TJ Hughes saw gross profits soar almost 50% a year, from £3.6m in 2003, increasing to £7.9m in 2004[12] with a jump to £12m in 2006.[13] Throughout 2007, TJ Hughes's pre-tax profits were £5.1 million in the year to 26 January, up from £1.2 million the year before. Operating profit soared 299 per cent to £2.9 million.[14]

In January 2010, accounts showed pre-tax profits increased by more than £1.5m to £6.8m. That was achieved on sales of £266.7m, an annualised rise of 4%. Although the last full financial year before Ms Tennant was appointed, to January 2007, showed pre-tax profits of £1.2m, they rose to £5.1m in the year to January 2008. This was followed by profits of £5.3m the following year.

Competition[edit]

The demise of Woolworths was seen to create significant opportunities in the homewares market, although other mixed goods discounters such as B&M and Wilkinson, which have some overlap in terms of product offer, have also been expanding rapidly in a bid to gain some of this market share both on the high street and increasingly in out-of-town locations[original research?]. This is believed to be part of the reason as to why TJ Hughes entered administration.[15]

American retailer T.J. Maxx, which also sells discounted clothing and housewares, modified its name to T.K. Maxx to avoid confusion with T J Hughes when it opened its first British store in 1994. It subsequently used the T.K. Maxx name for its other European operations.[16]

Administration[edit]

A closed branch of TJ Hughes in Bradford.

It is understood TJ Hughes needed a major cash injection to see it through to the autumn. Endless, the parent company of TJ Hughes, could not provide the cash despite being a turn-around investor, having made a loss of £10 million in the year ending January 2011.[citation needed] TJ Hughes entering administration had meant it has put 4000 jobs at risk.[17] Administrators Ernst & Young claimed they were aiming to try and prevent as many redundancies as possible.

There were also reports of a number of prospective buyers, including Primark.[18] Ernst & Young said it hoped to sell the company as a going concern, saying it was "very much business as usual" but added that it could be difficult to sell all of the stores owing to the previous trading history of TJ Hughes.[citation needed] The news came three days after Jane Norman, the women's-wear chain, went into administration with a number of other retailers going into administration.

  • Thursday 7 July 2011: GA Europe acquired Endless’ secured debt due from TJ Hughes and will work with administrators Ernst & Young to liquidate stock[19] from the retail chain’s 57 stores.[20]
  • Friday 22 July 2011: TJ Hughes administrators Ernst & Young announced the company's Liverpool distribution centre was to close, making 116 employees redundant.[21]
  • Monday 1 August 2011: the TJ Hughes flagship store in Liverpool was sold to Speke-based (Benross Group), who also bought 3 other stores in Eastbourne, Glasgow and Sheffield, saving 442 jobs.[22] Lewis Home Retail also bought the brand name and website.
  • Thursday 4 August 2011: Ernst & Young announced the closure of 22 TJ Hughes stores throughout the United Kingdom, losing 1000 jobs.[23] Store closures will begin on Wednesday 10 August, with Shrewsbury closing its doors, with more stores to follow over the coming days.[24]
  • Tuesday 20 August 2011: Saw Ernst & Young announce the remaining TJ Hughes store will close their doors on Wednesday 31 August 2011, apart from the 6 stores bought by Lewis's Home Retail Ltd. (Part of the Benross Group). They also bought the Brand name and the remaining 6 stores will continue to trade as TJ Hughes.[25]

Criticism[edit]

TJ Hughes were fined £2,056 in 2006 when a sales assistant sold knives to a 14-year-old who was sent into the shop to attempt to purchase the item. A subsequent investigation showed the company did not have the necessary procedures in place to prevent the sale at the time. The fine would have been greater if T J Hughes had not pleaded guilty.[26]

References[edit]

  1. ^ a b c "TJ Hughes grows again after fourfold profit rise". Liverpool Daily Echo. 28 October 2010. Retrieved 28 October 2010. 
  2. ^ Fletcher, Richard (15 November 2003). "PPM sells Oasis as it grabs TJ Hughes in £55m deal". London: Telegraph. Retrieved 18 October 2008. 
  3. ^ "Management team buys Liverpool retailer TJ Hughes with backing from turnaround specialist Endless". liverpoolecho. 25 March 2011. Retrieved 25 March 2011. 
  4. ^ "Discount store TJ Hughes now in the hands of administrators". guardian. 30 June 2011. Retrieved 30 June 2011. 
  5. ^ "TJ Hughes Launches Quick-Fire Sale". TJ Hughes. 12 July 2011. Retrieved 14 July 2011. 
  6. ^ "TJ Hughes saviour 'devastated' by its collapse". Click Liverpool. 5 September 2011. Retrieved 5 September 2011. 
  7. ^ "TJ Hughes opens eBay shop". Telecomworldwire. 23 December 2005. Retrieved 6 December 2008. 
  8. ^ TJ Hughes sign Graham Rooney for advertising
  9. ^ "TJ Hughes unveils e-commerce site with YOMA". The Drum. 20 May 2013. Retrieved 18 October 2008. 
  10. ^ "YOMA". YOMA. 31 July 2008. Retrieved 18 October 2008. 
  11. ^ "Tjhughes.co.uk Site Info". Alexa Inc. 31 March 2011. Retrieved 31 March 2011. 
  12. ^ T J Hughes at Buyout Track[dead link]
  13. ^ T J Hughes at Profit Track[dead link]
  14. ^ "TJ Hughes grows again after fourfold profit rise". Retail Week. 31 July 2008. Retrieved 18 October 2008. 
  15. ^ "TJ Hughes Enters Administration". Telegraph. 27 June 2011. Retrieved 30 June 2011. 
  16. ^ Joachim Zentes, Dirk. Morschett, Hanna Schramm-Klein (2011). Strategic Retail Management: Text and International Cases. Gabler Verlag. 
  17. ^ "TJ Hughes collapses into administration". guardian. 27 June 2011. Retrieved 30 June 2011. 
  18. ^ "TJ Hughes stock sell-off announced by administrator". BBC News. 7 July 2011. Retrieved 7 July 2011. 
  19. ^ "Debt due from TJ Hughes". bheta. 7 July 2011. Retrieved 7 July 2011. 
  20. ^ "TJ Hughes stock sell-off announced by administrator". BBC News. 7 July 2011. Retrieved 7 July 2011. 
  21. ^ "TJ Hughes warehouse closes making 116 redundant". Liverpool Echo. 22 July 2011. Retrieved 22 July 2011. 
  22. ^ "TJ Hughes stores to stay open saving 442 jobs". The Sun. 2 August 2011. Retrieved 2 August 2011. 
  23. ^ "TJ Hughes sheds 1,000 jobs as 22 stores close". Retail Gazette. 4 August 2011. Retrieved 4 August 2011. 
  24. ^ "TJ Hughes sets closure dates for 22 stores next week". BBC News. 4 August 2011. Retrieved 4 August 2011. 
  25. ^ "Administrators close last of TJ Hughes' stores". housewareslive. 20 August 2011. Retrieved 20 August 2011. 
  26. ^ "T J Hughes fined for the sale of knives to minors". Havering. 29 June 2006. Retrieved 18 October 2008. [dead link]

External links[edit]