But a week on from the company calling in the administrators for a second time in seven years, insiders have told Inside Croydon that the store was doomed from the moment the first rioter’s petrol bomb was lit on the evening of August 8 last year.
Estimates from a number of concessions that operated in the store and from senior sources at Allders suggest that retail takings have been down by at least 20 per cent in Croydon since last August.
“The town has never recovered from the riots,” a member of the Allders management said.
“The riots turned many people away from Croydon, and from Allders. We lost customers and we lost concessions. It was clear by Christmas that things were worse than they had ever been.”
The department store continued through last Christmas – always the main trading period of the year for Allders – despite rumours in Croydon that the company was considering making up to 100 staff redundant as a result of the recessionary downturn and the post-riots impact on the town. At the time, Wendy Sly, the Allders marketing consultant, denied that any staff faced redundancy.
Harold Tillman, the fashion entrepreneur, had rescued Allders from its previous flirtation with administration in 2005, when he bought the store, its name, reputation and ample stock. Having traded through Christmas 2011, Tillman opted to sell off around two-thirds of his shares in the company this spring, reportedly for £30 million.
Around the same time, another Tillman-owned company, Aquascutum, went into administration. Aquascutum has since been sold to its Chinese licence-holder.
It seems that Brixton-born Tillman, awarded a CBE for services to the fashion industry but also once banned from being a company director after a previous business went bust, has managed to sell off the majority of his interest in Allders in the nick of time.
“I am very sad about it,” Tillman said last week, “because I think I have done my bit and I just hope there is an opportunity that someone will come along and take it back on.”
Bailiffs approached to move in over rent
The timing of Allders finally calling in the administrators seems prompted by the company’s need to make its quarterly rental payment this month: a cool £450,000.
With its banks having cut the company overdraft and its turnover well down, Allders had been slow to return the takings of several of the concessions that operated in the store. Some of the concessions claim to have gone four months without receiving their takings (less deductions), leaving one of them owed more than £20,000. There are rumours, unconfirmed, that two larger, prestige brands that operated concessions in the store are owed a large six-figure sum between them.
Minerva, the landlords, had pitched the annual rent at £1.8 million for Allders, the country’s third-largest department store by floor space. “The rent has always been too high,” one Allders manager told Inside Croydon.
Last Friday, Minerva told the Financial Times that, “We responded quickly and constructively to the concession requested. We are very disappointed that, even with our offer to assist, the board of Allders has been unable to conclude that the business is viable going forward and administrators have therefore been appointed.”
Reading between the lines, this seems to suggest that while Allders sought a “rent holiday”, Minerva was still after a large sum of cash towards the rent, and more than Allders could afford to pay.
The source at Allders said that approaches for help to the freeholders, the Whitgift Foundation, and for some form of business rate relief from Croydon Council were also both rebuffed.
“The Whitgift Foundation was most unhelpful,” the source said. “And Croydon Council told us that they could not offer an abatement on business rates because it would create a precedent.”
Others who have contacted Inside Croydon said that last month Minerva had approached a certified bailiff to take action at Allders – this would have involved seizing goods and equipment in the store and stock rooms to the equivalent value of the unpaid rent. This hard-nosed business attitude seems to contradict the idea that the landlords were ready to waive the rent.
Max Menon, the chairman of the Croydon Business Improvement District and until earlier this year Allders’ finance director, this week told Inside Croydon: “We need everyone to work together positively.”
That would suggest that Menon believes that any prospective buyer for Allders will need to have much more sympathetic treatment from their landlords, their Whitgift Foundation neighbours and Croydon Council, perhaps even need to be cut some slack by the owners of the high-charging local car parks.
In the case of Minerva, that would only be enlightened self-interest: it is estimated that the landlords could be faced with a £2 million bill just for security and other costs of having the Allders building empty.
Frustration and anger over treatment by Allders management
Any new owners may also need to take a hard look at the way the store is managed and how it works with its many business partners, such as the concessions who seem to be among the hardest hit by the store’s collapse.
Typically, concessions – independent businesses that paid to operate in Allders – were deducted 26 per cent of their daily takings for the rights to operate in the store, in return for which they were supposed to have the advantage of various services provided by the company.
However, concessions that have contacted Inside Croydon have expressed frustration, even anger, at the way they have been treated by Allders’ middle-management. Denied access to their own takings, staff wages have become a real problem, stock has not been replenished, and some of the businesses have been pushed to the brink of bankruptcy.
Despite statistics compiled by Croydon Council that shows that “footfall” in the town centre has recovered in 2012, one Allders source says that these figures are “misleading” and “deeply flawed”.
“However you measure it, ‘footfall’ needs to be converted into sales, and that clearly hasn’t been happening since last August. There’s a range of related reasons, including the recession, the high rate of VAT and the high parking charges,” the source said.
“But we have never recovered from the riots.”
Following the riots, all the concessions in the store had to go to the Allders’ finance department each morning to get their “float” for the day’s trading, because the management was not going to leave any money in tills overnight. “It all looked very grim,” said one trader.
Some concessions, who had already been struggling to swim against the retail business tide of 20 per cent VAT and the double-dip recession, decided to get out of Allders, and Croydon, as soon as the riots happened. “My friends who remained said that trade dipped even further after riots, but it was already very bad.”
One Allders concession spoke of their anger at the “shoddy” treatment that they and their fellow independent traders have received, citing the example of Hatz, the family-run milliners owned by Monique Ribeiro which is now facing bankruptcy.
“I was treated badly but mostly let down by shoddy service. I was lucky. I was not screwed out of lots of money like some concessions,” the trader said.
“The way people like my friends at Hatz have been treated is disgraceful. Monique is a lovely person and a good businesswoman. She previously won a Croydon award and has employed many people. If Croydon traded like her the town would be on its feet, not on its knees.”
Other complaints from concessions who have contacted Inside Croydon include:
- rudeness and surliness from Allders’ support staff, emails unanswered and appointments broken;
- service departments not open during normal office hours;
- “for the first year we were in Allders we disposed of our rubbish every night. When we moved briefly down to the other unit a porter took the rubbish away daily. We found out the reason he had not done so before was because he was not told we were trading there”;
- “Till broke down three times, the chip and pin machine broke down 12 times, all resulting in lost sales”;
- “We were told we must close on time (ie shop closing time) not before. On four occasions when we did so, the cash office had already closed so we had to leave money in security. Only then did I discover that every concession closed early, or face this risk”;
- “Allders have a stock room full of brilliant props looked after by several people who seemed to sit around drinking tea, watching daytime telly, not helping concessions set up their shops”;
- “We were paid late on three occasions and each time we were lied to”;
- “In the height of summer last year they confiscated a fan I had brought in. When I questioned this removal of equipment I was called ‘a fucking idiot’ by a member of the maintenance team”;
- “We were promised to be on the Allders website. We never were. We wasted a lot of time on this with the useless person in charge of marketing who visited me”;
- “We requested a phone line. After four weeks’ waiting, we contacted them again and they claimed no request had been received. Their admin was appalling”
- “Allders’ back-room services were staffed by jobsworth pisspoor people who couldn’t do the simplest thing to assist the traders”.
The future of the landmark store, which was supposed to be celebrating its 150th anniversary this year, remains uncertain. The fate of the Whitgift Centre next door is undecided, with a battle on-going between the freeholders, the Whitgift Foundation, and the owners of the majority of the freehold, who are backing redevelopment schemes put forward by rivals Hammerson, the owners of the nearby Centrale mall, and Australian developer Westfield.
Croydon has been blighted by long-running, and ultimately fruitless, planning disputes before, over the Arena scheme at East Croydon and the Park Place site. Neither multi-million pound project ever got off the architect’s drawing board.
The uncertainty over the future of the Whitgift Centre can only adversely affect negotiations over Allders, says Andrew Pelling, the former MP for the area. “The beauty contest between Hammerson and Westfield needs to be decided as soon as possible, because the lack of certainty will prevent interested parties from committing,” Pelling said.
- Inside Croydon was the first local website to report on Allders’ financial problems last week. Catch-up with our coverage here:
- June 20: Save Our Shops: Buy from an Allders concession this week
- June 15: Concessions owed thousands as Allders goes into administration
- June 14: Allders chief blames council for lack of help since riots
- June 12: Deal on rent is crucial for Allders’ future, reports say
- Inside Croydon: For comment and analysis about Croydon, from inside Croydon. Not from Redhill.
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