Home Human Resources NewsEntrepreneurial News Why John Timpson thinks floating his £134m business is a “stupid idea”

Why John Timpson thinks floating his £134m business is a “stupid idea”

by LLB Editor
16th Jul 13 9:17 am

Why the 148-year old chain will always be family-owned

When I ask John Timpson if he would ever float his £134m shoe repair and key-cutting firm, he wrinkles his nose. “It’s a stupid idea,” he says defensively. “I would hate going around the City having shareholders telling me what to do.”

How about taking the Timpson brand global?

“Nah! Why go abroad when you can do so much right here in the UK. Some of our shops are frankly amazing and some not so much. So we’re going to focus on becoming bigger and better here.

And he shoos away (pun intended) venture capitalists too. “They don’t get as far as the door.”

The 148-year-old business started by his great grandfather reported a £134m turnover in the year to September with John, the chairman, pocketing a £4m dividend. His wealth in 2013 was valued at £100m by the Sunday Times Rich List.

Even though profits for the company, that has 1,033 stores all over the UK, fell to £10.1m from £12.8m last year, John will not budge from his “no-outsiders-allowed” policy. His big plan for the coming years is to put Timpson stores in supermarkets but we’ll come to that later.

Sitting at the LondonlovesBusiness.com HQ, John,72, talks of his possessiveness for the business very proudly.

“A lot of people build businesses to sell it and buy a yacht, but it’s never been like that for me. It’s like having a stately home and you’re going to keep it even if you don’t have any money.”

Clearly he is a man who takes the concept of family very seriously. Not only does he consider his 2,500 employees as kith and kin, he is proud to be a husband, a father of five children and perhaps most impressively the foster father of 92 children.

“We’ve fostered 87 or 90 kids but who’s counting? There’s seldom been a time where we haven’t had extra children. It’s made both us and the kids understand life better.” While his son James is the CEO of the company, Edward is the children’s minister.

John’s tightfistedness for his business, which essentially began as a shoe retailer, also goes back to family. In 1973, much like a TV drama, John’s uncle got all the firm’s directors to gang up against his father and ousted him from the company.

“That’s how the business went out of family hands,” he says his eyes saddening.

Then in 1973, Timpson was acquired by a retail conglomerate called United Drapery Stores (UDS) although two years later John was invited to run the Timpson subsidiary. Then in 1983, when UDS was being taken over by Hanson Trust, John arranged a £43m buy-out – a staggering figure for those times.

“No one knew what a buy-out was at the time but I met a guy who persuaded me that it was a good idea. Most of the money for the acquisition came from selling properties of the business and venture capitalists.”

So now that the business was back in family hands, what was his father’s reaction?

“He was told to leave his car in the car park and was even banned from going into the office. So after we got the business back he was very pleased.

“But after that he was pretty numb to everything as he was old. Well he was over 60, that doesn’t seem too old to me now,” he grins.

Next, John had to take one of the “most difficult and traumatic decisions” of his life. In 1987, he had to sell off Timpson’s shoe retail business because players like Marks & Spencer and B.H.S entered the market and made his brand somewhat unfashionable.

“It was pretty traumatic, but was it the right thing to do. Hardly any of the shoe retail chains from the time survived so I was right to get out. But it’s was really horrendous letting go of that part of our family business.”

Taking those tough decisions held John in good stead and he was able to scale the business. His knack of keeping one of Britain’s iconic family businesses alive won him the CBE in the Birthday Honours List for services to the retail sector in 2004.

Is Timpson trying to be a conglomerate?

John might keep a strict “outsiders not allowed” policy but this hasn’t held him back in buying out businesses himself.

In 2003, he bought the retail chain Minit Group whose brands include shoe repairs and key cutting business Mister Minit, photo arm Supasnaps and drycleaners Sketchley. Then in 2008, he bought the venture capital arm of Unilever called Persil Services that ran a chain of dry-cleaning concessions inside Sainsbury’s. In 2009, he bought 200 photo processing shops from Klick/Max Spielman and rebranded it as ‘Max’.

In January this year, he bought the photo company Snappy snaps with the deal reported to be between “£2m-£3m”. However, he says “it’s more than that”. He also owns two pubs in Anglesey called The Oyster Catcher and The White Eagle.

So with buying up everything from photography businesses to pubs, is John out to make Timpson a conglomerate?

“No, I have no plans to become a big conglomerate, it’s not us.”

The next big bet for the business is setting up Timpson service shops in supermarkets. As of today, Timpson has 100 in Tesco and 70 in Sainsbury’s.

“That’s going to be our biggest area of growth in 4-5 years. I would be surprised if we don’t have 600 supermarket concessions in four years,” he says.

Timpson recruitment strategy? Give staff a holiday on birthdays

John’s struggle with resuscitating his family heritage has made him a different kind of employer. While the business might be more than a century old, it’s far from traditional. Staff are given their birthdays off and can book Timpson’s holiday cottages for free. Also, the company employs more than 150 ex-offenders with James Timpson leading the programme.

And there are only two rules to go by for Timpson employees.

“One, look the part and two, put the money in the till.

“As long as you follow these two rules, you can do whatever you like. We realise that in order to make this work, we need to pick the right people.”

But for a business which has seen many economic downturns, is it as simple as that to run a business? Did he not have to tweak his strategy?

“The recession tends to find businesses that are incredibly weak. The good part of the recession is that it makes you have a good look at yourself and calculate where you’re spending a lot of money. So we very quietly did an exercise last year, which included everything from making a few lay-offs to saving energy costs. After all, every house needs a spring clean.”

Next up, we talk about the enigma that is the high street. How has Timpson managed to open over a 1,000 stores in the UK at a time when one in five high street shops is expected to close by 2018.

“I don’t know why everyone talks negative about the high street. I was in Romford the other day, it’s definitely not the most exciting place on the earth but it was packed out. So, all over the country there are buzzing high streets.

“The problem is that there are too many shops now which should be turned back into houses. Knock something down, make affordable town centre homes and throw in a bit of free parking too.

“The smaller the high street, the more chances it will work. We can’t carry on with what Mary Portas is doing which is trying put up few little sticky plasters on what’s on the high street now. Let’s look 20 years ahead ”

But where will Timpson be 20 years from now? After all, going global, debuting on the stock market or becoming a conglomerate are struck off the list.

“I am not sure yet but being a wholly-owned family business is probably the only certain part of what we’re going to finish up with.

“We are not going to let someone else screw this up,” he sums up.

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