Littlewoods is one of the high street survivors, but its mail order catalogues are on the market. Hashi Syedain checks out the future of the whole group.
The splendid views over Liverpool Bay are the one redeeming feature of the JM Centre. Headquarters of The Littlewoods Organisation, this 14-storey concrete block proclaims the company's 1960s heyday.
But a lot has been happening at Littlewoods lately. A decade ago its dowdy department stores had more or less been written off in the frantic race to carve up the high street. The Littlewoods formula, built so successfully by Liverpool legend Sir John Moores, seemed hopelessly outdated - nothing more than boring clothes in boring stores.
Ten years on, in the sober light of the 1990s, things are looking very different. The retail revolutionaries have burnt themselves out and one by one dropped exhausted by the wayside. Littlewoods, meanwhile, has been gathering its forces and is poised for a comeback. The company's approach, says chief executive Desmond Pitcher, has been vindicated at last; boring is in fashion again and the common sense of the great British public has prevailed over tinsel and razzmatazz. Results for 1990, unlike so many other retailers', are expected to be strong, with profits up on the 1989 figure of £64 million.
And for once, this year Littlewoods' results will be most keenly awaited not just by its rivals but by the financial community at large. The 32 members of the Moores family who still own 100% of Littlewoods have let it be known that the sale has begun; the biggest part of The Littlewoods Organisation - mail order catalogues - is on the market, with a reputed price tag in excess (probably well in excess) of £350 million.
The announcement came as no great surprise; except in as much as it had been thought that the family might hold back in the lifetime of Sir John. The great man himself is now 95 and too frail for any involvement. Three family members sit on the board as non-executive directors. But none of them, it is widely acknowledged, has the talent, flair or business acumen of "Mister" John who is variously described by senior Littlewoods executives as "a genius", "unique" and "the most significant pre-war businessman still alive".
The empire that he built, now Britain's largest private company, covers three broad areas: home shopping, high street retailing and, of course, the football pools. In addition there is a small credit and information branch, CDMS, and a printing operation which turns out the eight million pools coupons played each week by aspiring millionaires-to-be.
Officially the reason for selling home shopping is to focus the group on the pools and the high street, while releasing capital to fund expansion. No doubt, however, the Moores family is also considering its own pocket. Barred from selling shares to outsiders, some of the younger generation of Moores are keen to realise their enormous paper wealth.
Strategically, home shopping is the obvious part to sell. Agency catalogues of the Littlewoods type, with housewives selling to family and friends, are a stagnant if not shrinking market. Home shopping as a whole accounts for only 3% of retail spending. And unlike in the United States and some of Europe, the UK mail order business has never been able to break away from its traditional downmarket image.
When John Moores set up the first Littlewoods catalogue in 1932, housewives' shopping clubs were all the rage. A group of women would put money into a weekly kitty and then take turns to spend it. With a catalogue, however, you could buy immediately and pay in instalments, a form of credit built into the price. It was also very convenient, in the days before widespread car ownership. Now that credit and mobility are almost universally available, catalogues have lost much of their appeal.
Indeed, the only area showing real potential is direct sales in niche markets - the overweight, for example, who may be disinclined to shop in public. Or the Next Directory, a fancy, hardback, charged-for catalogue, owned by Next and aimed at young professional women.