T. J. Hughes
 | |
| Company type | Private |
|---|---|
| Industry | Retail |
| Founded | 1912 |
| Fate | Administration |
| Headquarters | Liverpool |
Number of locations | 57 |
Key people | Bob Lister (Chief Executive) |
| Revenue |  £266.7 million (2010)[1] |
| £9.3 million (2010)[1] | |
| £6.8 million (2010)[1] | |
| Owner | Endless |
Number of employees | 4000 (2011) |
| Website | http://www.tjhughes.co.uk |
TJ Hughes is one of the largest discount department store founded in 1912 in Liverpool, England.[2] The retail chain trades from 2,500,000 square feet (230,000 m2) of retail space and have 57 department stores throughout the United Kingdom[1], specialising in home and fashion, garden furniture, fragrance, cosmetics, menswear, womens-wear, toys, and electrical items. Some of the larger stores also include a restaurant. Although the group is based mainly in the north of England it has stores throughout the United Kingdom. The company headquarters are currently located in Liverpool.
On Monday 27 June 2011, TJ Hughes Limited announced that it intends 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.[3] The company launched a closing down sale, with "1000's of items reduced" in a bid to reduce stock levels.[4]
History
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.
He 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 £42m, ahead of a £56m buyout backed by PPM Capital in 2002.[5]
TJ Hughes was sold to Endless, a turnaround specialist, for an undisclosed sum in 2011. TJ Hughes will be the thirteenth company in Endless' portfolio. Endless bought TJ Hughes from Silverfleet Capital, which has had control of 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 has grown by around 20 stores since its acquisition by Silverfleet Capital in 2003.[6]
Sales strategy
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, Robbie Williams’ father and Wayne Rooney’s brother. 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.
TJ Hughes has also been recently offering "20% off absolutely everything" in store in a bid to reduce the level of stock in its warehouses after the chairman Neil McCausland said "trading remains very tough", after Christmas the retailer took steps to limit its exposure. Its main aim is to offers premium brands at up to 70% discount and offer quality products at low prices.
Online
TJ Hughes was a late runner in the e-commerce era with TJ Hughes establishing an information website for investors and customers in 1999/2000. Although a new site was launched in 2004, but continued to comprise only basic information, including current offers and store locations. In spite of this, the company reported that this site received some 17,000 hits a month, which prompted TJ Hughes to look at the introduction of an online offer. But a fully interactive e-commerce facility 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 which it offered online. It is only recently in 2011 the company has been offering an extensive range of products on its website. The TJ Hughes website is current ranked 108,004 worldwide and 5,237 in the United Kingdom according to Alexa. [9]
Expansion
After several years of static store numbers, expansion picked up again recently, with three new outlets having been opened during 2009/10 and a further 4 outlets having opened in the first 10 months of 2010/11. Much of the recent growth has been opportunistic as the company has sought to take advantage of better leasing terms as landlords have been keen to fill sites that have been left vacant as a result of the downturn. Indeed, a number of the recent openings have been in locations left vacant by Woolworths. While TJ Hughes has not been drawn on long-term expansion plans, it had in the past refuted press speculation that it was looking to develop a 200-strong chain.
Financial success
TJ Hughes have seen gross profits soar almost 50% a year, from £3.6m in 2003, increasing to £7.9m in 2004[10] with an impressive jump to £12m in 2006.[11] Throughout 2007, TJ Hughes's pre-tax profits were £5.1 million in the year to January 26, up from £1.2 million the year before. Operating profit soared 299 per cent to £2.9 million.[12]
Its most recent accounts, for the year to January, 2010, 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
The discount clothing market has become increasingly competitive of late, with the superstores (led by Asda and Tesco, but with Sainsbury’s also following suit more recently) raising the ante at the value end, and with the parallel growth of the likes of Peacocks, Primark and the recently improved Matalan. This is a sector not without its problems, however, with the demise of a number of hitherto key players since 2008 - including MK One, Internacionale and Ethel Austin - underlining the pressures.
However, TJ Hughes believes that it holds a unique position as the only department store group on the high street offering discount fashion and homewares. Competition has nevertheless continued to rise, perhaps underlined by the more aggressive expansion of TK Maxx of late, both in out-of town locations where TJ Hughes has also expanded its presence from 2005 onwards, but increasingly in town centres as well. The demise of Woolworths has certainly created significant opportunities as far as homewares is concerned, 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.
Administration
TJ Hughes was acquired by the private equity group Endless LLP three months ago (as of June), but has struggled since credit insurers withdrew cover that protects suppliers in the event of collapse. It is understood TJ Hughes needed a £30m cash injection to see it through to the autumn and Endless could not provide the cash, having made a loss of £10m in the year January 2011. With TJ Hughes entering administration it has put 4000 jobs at risk. Ernst & Young have said they will try and save as many jobs as possible. [13]
There has also been reports of a number of company's circling the company, including Primark and retail entrepreneur Sir Philip Green. Ernst & Young said it hoped to sell the company as a going concern, saying it was "very much business as usual". The news comes just three days after Jane Norman, the womenswear chain, went into administration.
- On Thursday 7th July GA Europe acquired Endless’ secured debt due from TJ Hughes and will work with administrators Ernst & Young to liquidate stock from the retail chain’s 57 stores.[14]
- On Friday 22nd July TJ Hughes administrators Ernst & Young announced the closure of the Liverpool bases company's warehouse making 116 employees redundant. [15]
- On Monday 1st August the TJ Hughes flagship store in Liverpool was sold to a Speke-based group (Lewis Home Retail) by the administrators, they also bought 3 other stores including Eastbourne, Glasgow and Sheffield saving 442 jobs. Lewis Home Retail also bought the brand name and website. [16]
- On Thursday 4th Ernst & Young announced the closure of 22 TJ Hughes stores throughout the United Kingdom, loosing 1,000 jobs. Store closures will begin on August 10th 2011 when TJ Hughes in Shrewsbury trades for the last time, while 21 further outlets will cease to operate over the course of the following four days. [17]
Criticism
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.[18]
References
- ^ a b c d "TJ Hughes grows again after fourfold profit rise". Liverpool Daily Echo. 2010-10-28. Retrieved 2010-10-28.
- ^ TJ Hughes About Us
- ^ "Discount store TJ Hughes now in the hands of administrators". guardian. 30 June 2011. Retrieved 2011-06-30.
- ^ "TJ Hughes Launches Quick-Fire Sale". TJ Hughes. 12 July 2011. Retrieved 2011-07-14.
- ^ Fletcher, Richard (2003-11-15). "PPM sells Oasis as it grabs TJ Hughes in £55m deal". London: Telegraph. Retrieved 2008-10-18.
- ^ "Management team buys Liverpool retailer TJ Hughes with backing from turnaround specialist Endless". liverpoolecho. 25 March 2011. Retrieved 2011-03-25.
- ^ "TJ Hughes opens eBay shop". Telecomworldwire. 23 December 2005. Retrieved 2008-12-06.
- ^ TJ Hughes sign Graham Rooney for advertising
- ^ "Tjhughes.co.uk Site Info". Alexa Inc. 31 March 2011. Retrieved 2011-03-31.
- ^ T J Hughes at Buyout Track[dead link]
- ^ T J Hughes at Profit Track[dead link]
- ^ "TJ Hughes grows again after fourfold profit rise". Retail Week. 2008-07-31. Retrieved 2008-10-18.
- ^ "TJ Hughes collapses into administration". guardian. 27 June 2011. Retrieved 2011-06-30.
- ^ "TJ Hughes stock sell-off announced by administrator". BBC News. 7 July 2011. Retrieved 2011-07-07.
- ^ "TJ Hughes warehouse closes making 116 redundant". Liverpool Echo. 22 July 2011. Retrieved 2011-07-22.
- ^ "TJ Hughes stores to stay open saving 442 jobs". BBC News. 2 August 2011. Retrieved 2011-08-02.
- ^ "TJ Hughes sheds 1,000 jobs as 22 stores close". Retail Gazette. 4 August 2011. Retrieved 2011-08-04.
- ^ "T J Hughes fined for the sale of knives to minors". Havering. 2006-06-29. Retrieved 2008-10-18.[dead link]