James Beattie plc

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James Beattie plc

71-80 Victoria Street
Wolverhampton, West Midlands WV1 3PQ
United Kingdom
Telephone: ( + 44) 1902-422-311
Fax: ( + 44) 1902-643-355
Web site:http://www.beatties.co.uk

Public Company
Incorporated: 1920 as James Beattie Ltd.
Employees: 1,617
Sales: £106.6 million ($172.2 million) (2000)
Stock Exchanges: London
Ticker Symbol: BTT
NAIC: 45211 Department Stores

James Beattie plc, which operates the Beatties department stores group, one of the leading department store retailers in England’s Midlands region, has been adding stores and expanding its existing stores since the late 1990s, building up a park of 12 Beatties stores. With the addition of more than 300,000 square feet of selling space in progress, including more than 107,000 square feet being added to the company’s existing stores, Beatties expects to have total selling space of more than 750,000 square feet by the middle of the first decade of the 21^st century. The company’s home base and flagship store is in the longtime home Wolverhampton, from which chairman Eric Pountain and managing director Chris M.S. Jones oversee operations at the company’s existing Northampton, Solihull, Sutton Coldfield, Burton-Upon-Trent, Birkenhead, Worcester, Aylesbury, and Dudley stores. Beatties has built a reputation as an up-market retailer, refusing to enter the discounting contests with competitors during the lean retail years in the United Kingdom during the 1990s. Nonetheless, Beatties remains consistently profitable where its rivals have slumped, keeping to its commitment to high-quality customer service and major brand names. The company continually adds new services and product ranges to its stores, including photography studios, cafes, florist shops, and hair salons. At the same time, Beatties has been attempting to woo over a new generation of shopper, introducing youth-oriented designs and fashions to attract younger shoppers who have long avoided “shopping where their parents shop.” Beatties trades on the London Stock Exchange. The company posted nearly £107 million in sales during its 2000 year.

Drapers to Department Store in the 20th Century

James Beattie opened a drapery shop on Wolverhampton’s Victoria Street in 1877. Starting with just £300 and working with two assistants, Beattie’s shop, then called the Victoria Draper Supply Store, also provided a home for Beattie’s assistants. Over the next two decades the store grew into a thriving business. By the end of the 19th century, the store was turning over more than £30,000 per year in sales, with a payroll of some forty employees.

A fire in 1896 destroyed Beattie’s business, yet set the stage for the company’s expansion into one of the region’s most prominent department store chains. Despite suffering losses of up to £10,000 as a result of the fire, Beattie determined to rebuild his business. Instead of building on the company’s former Victoria Street site, Beattie relocated across the street—taking up residence in what was to become Beattie’s flagship store. The move gave Beattie the opportunity to expand the store.

The larger store proved still more successful than the original store and Beattie soon sought to expand the location again. In 1901, Beattie carried out a new expansion, which marked the end of the company’s policy of providing lodging for its employees. With the extra space, Beattie began expanding the store’s range of merchandise, and Beattie’s began evolving into what was later to become a department store.

James Beattie himself remained in control of his store until his death in 1934, guiding the store’s continual expansion as the company acquired adjoining properties. During the 1920s, Beattie reincorporated the store as James Beattie Ltd. After Beattie’s death, marking the end of a career spanning nearly 60 years, the next generation of Beatties joined the company in the form of Beattie’s grandson. Named after his grandfather, the younger James Beattie was appointed company secretary in 1938 before being named as a joint managing director in 1948. Beattie was to help lead the company’s public offering in 1954, when the company listed on the London Stock Exchange. Despite the public offering, the Beattie family maintained its control of the company’s direction through a dual stock setup that enabled them to retain the majority of the company’s voting rights. Other stockholders were forced to content themselves with shares providing guaranteed dividends.

The naming of James Beattie to the position of chairman and managing director in 1961 marked the beginning of a new period of growth for Beatties. For nearly 90 years, Beatties had been represented by its single Wolverhampton store. In the 1960s, however, the company began to expand its holdings. The company opened its first branch store in Birkenhead in 1963. This store was joined by two others before the end of the decade, one in Solihull in 1966 and another in Dudley in 1969. Further expansion came in the 1970s when the company opened Beatties department stores in Sutton Coldfield in 1974 and in Northampton in 1975.

New Expansion for the New Century

As the United Kingdom slumped into a long economic recession, starting with the crisis sparked by the Arab Oil Embargo and continuing more or less into the 1990s, Beattie’s expansionist moves came to a standstill. Instead, the company focused on improving its existing stores, concentrating on maintaining the stores’ attractiveness to their Midlands customers through a number of store extensions and refits. Yet the Beatties stores were finding it increasingly difficult to renew their customer base as a new generation of youth sought the means to set itself apart from their parents—a position that extended to a general avoidance of the somewhat stuffy, service-heavy British department store as exemplified in the hit television comedy Are You Being Served?

The retirement of James Beattie in 1987 set the stage for a new period of growth for the company his grandfather had founded more than a century before. Now led by chairman Eric Pountain and managing director Chris Jones, the company began a major renovation of its flagship Wolverhampton store, which, at a cost of more than £3 million, was completed in 1989. The completion of the Wolverhampton renovation, which added, among other features, escalators to the store for the first time, initiated a new period of investment and expansion.

In 1990, the company added its first new store in 15 years when it opened a Beatties department store in Burton-Upon-Trent. Two years later, another new Beatties store appeared in the Midlands retail landscape when the company’s four-story Worcester store opened. The company’s store holdings swelled to nine with the opening of a Beatties department store in Aylesbury. At the same time, Beattie saw the opportunity to build on its Wolverhampton site, adding an extension to increase its presence on Victoria Street.

The United Kingdom’s deepening economic problems in the early 1990s helped put an end to Beatties’ latest growth spurt. By the mid-1990s, the company, which one analyst described as a “slumbering family company,” seemed to have returned to bed. Yet, in 1995, the company made a significant change to its shareholding status, ending the long-standing two-tiered voting rights structure that had kept the company’s control within the Beattie family. With the Beattie family’s agreement, this structure was abandoned and all shares in the company received equal voting rights.

The return to health of the United Kingdom’s economy beginning in the mid-1990s sparked a renewal in the company’s expansion mood. Beatties, which had refused to follow retail trends toward discounting in order to woo customers, had received praise for weathering the difficulties of the decade. In fact, Beatties had remained profitable and posted steady increases in sales, which topped £90 million in 1996, while many of its discount-eager competitors were struggling and even going under. The company, which had engaged in a number of strict cost control measures to ensure its profitability, began a new investment program in 1998.

Company Perspectives:

As a department store our main purpose is to provide you with an extensive range of well-chosen, good value merchandise, and to offer this to you in attractive surroundings supported by pleasant and efficient service with complete integrity.

Key Dates:

1877:: James Beattie opens drapery store in Wolverhampton.
1896:: Fire destroys original store; company reopens across the street.
1901:: Expansion of store and introduction of department store format.
1920:: Company incorporated as limited company.
1934:: Founder James Beattie dies and his grandson, also named James Beattie, joins the company.
1948:: James Beattie becomes joint managing director.
1954:: Company is listed on London Stock Exchange.
1961:: James Beattie becomes managing director and chairman.
1963:: Company opens second store in Birkenhead.
1987:: James Beattie dies.
1989:: Company completes £3 million renovation of Wolverhampton store.
1995:: Company changes shareholding structure to eliminate two-tiered voting rights.
1998:: Beatties announces £12 million renovation plan.

At first the company turned to its existing stores, pledging some £12 million in a series of store expansions and store remodelings. The company set its focus on increasing the range of products and services offered in its stores, as well as increasing the number of its brand names. At the same time, Beatties sought to bring young shoppers back to its aisles, increasing its number of youth-oriented designs and fashions, including the hot brand names of the day. By 1999, Beatties could also begin announcing its intention to add new stores to its Midlands department store empire.

Beatties’ ambitious expansion program for the turn of the century represented nearly £20 million in investment and called for the opening of three new stores. Among these stores was a 55,000-square-foot store in Huddersfield as anchor tenant in a new shopping mall being built there, and a 90,000-square-foot flagship store in Birmingham, in a site acquired from C&A as the Dutch retailer decided to pull the plug on its struggling U.K. operations. The refitting of the C&A site was expected to cost the company some £6.5 million, but was scheduled to be completed by September 2001, in time to capture a share of the crucial fourth-quarter shopping season. By the end of that year, the company planned to have 11 stores in operation.

By 2000, Beattie was also able to announce the future addition of a 12th store to its growing network. The new store was slated to open as an anchor tenant in the Blackfriars development scheduled for completion in 2004. Meanwhile, Beatties was putting the finishing touches to much of its massive renovation program, completing the refits of its Wolverhampton, Northampton, and Solihull stores by the end of 2000. The renovation and expansion of its Sutton Coldfield store, adding some 30,000 feet, was scheduled for completion in 2002. In all, the company expected to add more than 300,000 square feet of selling space, giving it a park of more than 750,000 square feet of selling space with which to win customers at the start of the new century.

Principal Competitors

Arcadia Group plc; Debenhams plc; Harrods Holdings; House of Fraser plc; Marks and Spencer plc; N Brown Group plc; New Look plc; Next plc; Otto Versand Gmbh & Co.; Selfridges plc.