Jessops row ignites AP forum frenzy
Chris Cheesman speaks to David Adams, chairman of a chain that is £60m in debt and faces accusations of leaving behind its key customers
IN last week's issue we reported that Jessops chairman David Adams had interrupted his holiday plans in a bid to reassure readers that the photographic chain has not neglected the photo enthusiast (see AP 29 August).
Adams had been speaking hours after Jessops came in for heavy criticism from former chairman Tim Brookes in an interview on BBC radio.
Brookes said Jessops had lost its way and mistakenly focused on mass-market products at the expense of the enthusiast.
Adams hit back, saying the chain had overexpanded and blamed previous management for allowing the firm to run up a mountain of debt that now stands at £60m.
AP readers were just as quick to express their views, via AP's website.
One forum user, using the online name 'Still Togging Along', wrote: 'Jessops expansion came at a time when cash for expanding their business was really cheap and bankers were falling over themselves to dish the stuff out.
A few years down the line, the internet businesses dramatically expand and then eBay surfaces, which kills off the photography trade's most lucrative market: second-hand equipment.'
Another, called 'parkylondon', wrote: 'I was in a local Jessops store yesterday and while the team were very helpful they didn't have the deep knowledge that a specialist photography store would have. In addition - and this is the kicker - they admitted they have shifted massively away from the enthusiast photographer towards the consumer.'
Regular AP reader 'Benchista' added: 'Of course,
Adams says Jessops has not ignored the photo enthusiast, but could not neglect the wider market it's true that they ignore enthusiasts these days, but I think Adams' analysis of the cause, origins and timescale of the issues is closer to the mark than [Brookes'] self-serving comments.'
'Not walking away'
Adams told AP that the photo enthusiast is not being left behind.
He accepted that the business is now more 'consumer orientated', but said the company could ill afford to ignore the large market beyond the traditional camera enthusiast.
He added: 'We are not walking away from the core of the business, which is the camera enthusiast.'
Adams stressed that the recently revamped flagship shop on New Oxford Street. London, demonstrates how Jessops is making products and staff more accessible to the consumer at store level.
'If that's getting away from our roots and being mass market then, yes, that's the way we are going,' he said.
Adams told us he had no option but to reverse tbe firm's previous overexpansion policy.
'In October 1996. six months before I joined, Jessops acquired 19 stores. We have now closed 18 of them,' he said.
However, he is confident about the firm's future as it completes the latest phase of staff restructuring.
Adams explained that many workers have now been put on 'more flexible contracts', to ensure more are available on a Saturday afternoon than a Tuesday morning, for example. This has, however, led to job losses.
Meanwhile, Jessops has just hired Trevor Moore to fill the vacant role of chief executive in a bid to take the company 'to tlie next stage'.
Adams accepts that Jessops' trading level does not support the amount it owes its bank, but he says that Jessops is where it needs to be to secure the capital restructuring agreement with HSBC. 'It is an unsustainable situation and with the support of the bank that's what we have been trying to sort out.'
He declined to comment on details of the deal, which is expected to be completed over the next few weeks. However, a recent report in the Financial Times states that the anticipated 'debt-for-equity swap' with HSBC would 'wipe out shareholders'.
Adams fended off negative press reports fuelled by a 4.7% fall in sales in the three months to 30 June 2009. 'I don't think they [the results] are that bad... I'm not sure there is anyone in our market doing better than that... In a tough market we are holding on.' He added that 'price deflation' continued to take its toll.
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