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Jessops on the verge of administration
- Thread starter danski
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It was the last time I was there too.
But then if you know what you want, its easy to drop in and buy "it"
big soft moose
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to be honest i wasnt that suprised - the only way for a bricks and mortar camera shop to succesfully compete with internet shops and grey importers , is for it to charge higher prices but justify them by offering exemplary service in every aspect of the customer experience and indepth knowledge in all its staff which keeps the customer coming back despite the higher prices
thats doable in a one outlet small business but much harder to acheive for a large chain and the customer experience with jessops was variable at best, with some shops having great knowledgeable staff, but others seemingly full of clueless halfwits.
thats doable in a one outlet small business but much harder to acheive for a large chain and the customer experience with jessops was variable at best, with some shops having great knowledgeable staff, but others seemingly full of clueless halfwits.
It stopped being a public service when it was privatised.
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No, it's still a public service, albeit privatised and only subsidised by the State. I would also still view the Electric and Gas companies as a public service (even though they act as anything but :shake: ).
They are still essential services which without them the public would suffer hardship.
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There are many reasons as to why the government should step in. They are the ones who are in charge of the country! For shops to have a retail presence on the high street they do have higher over heads, which does not make them as competitive to run. Although I understand your point about it being a punitive tax lets just face facts here for one moment.
Amazon has a warehouse. This warehouse can be located in the middle of nowhere, with cheap rent, no show room, and a few employees. Most of their process is automated, meaning staff labour is kept to a minimum.
Jessops have over 180 stores, employing a multitude of people around the country. They have to pay high street rents, high utility bills, a much higher staff wage, and with that go employee benefits, pensions, insurance and all the rest of it. Jessops also pay tax in the UK, but thats a separate matter. The government needs the high street to survive and employ people.
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Macro time I hope.
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Dylanlewis2000 said:
Amazon currently has 12 very large warehouse on the UK mainland, and a global staff of just under 14,000. If you saw the BBC news film of the inside of an Amazon warehouse you have seen it surprisingly much less automated than you'd think.
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But realistically, when they don't pay corporation tax, and don't have high street stores, they are going to be able to undercut places like Jessops.
what about sheffield photo centre on eccy rd?
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Do you know Rich I totally forgot about them. Thanks for the reminder, I'm going to have a look at them, see whats what.
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Ofcourse they are paying corporation tax....Just not in the UK...
If Jessops had invested in an international operation, then they too could have choosen where they pay their corporation tax. It is all part of the international tax treaties.
If anything the UK government should make it more competitive for multi national companies to base themselves here, such that we get a small percentage of a lot of turnover, instead of a large percentage of basically nothing...
But regardless of that, none of this would have saved Jessops...
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You only pay Corporation Tax if you make a profit. Jessops problem was that they weren't making a profit.
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The Greek said:
If you give cash you cant guarantee that the recipient will spend it on themselves rather than pay household bills or for the cash to be 'absorbed' into the household cashflow
By giving a voucher you can ensure that they buy something for themselves from a store or supplier who deals in products that they are likely to want or would usually purchase themselves
Rob
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acetone said:
I've visited a couple of them, scarily un-automated compared to what you imagine! But it's also hard to think of a better way of dealing with the huge variety of products they stock in them, turns out a person is the best way to handle it!
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Sorry Dylan, but you really need to get a grip of reality.
First off, the government are not in charge of the country - we are, if only we'd realise it! We vote these turkeys in every few years to run the country's services, etc.
But that's immaterial - as I said previously, private enterprise is just that. If it can't stand on its own two feet and merit, then it must rethink its strategy or wither and die.
The reason Jessops failed is because they couldn't attract enough trade either online or passing footfall, which has been dwindling for quite some time now for a variety of reasons (parking charges, getting parked, fuel costs, same old stores as every other town).
The high street is a bit of a dinosaur in modern times, a bit like the record/movie industry's distribution model before Apple persuaded them to change tactics to reduce pirating, and due to the squeeze on everybody, the convenience of popping into town to get something there and then is replaced with saving fuel and the rest, by staying at home and ordering it online.
The high street is unlikely to ever return to past times, save for Christmas or other occasions, and if Jessops hadn't buried their head in the sand like they did, they could've survived, albeit with fewer stores - but as we've seen what point is it being able to crow about having nearly 200 stores, when you go to the wall?
Management were on a complete vanity trip, or simply didn't have the right expertise in-house to gauge the new wind direction blow down the High Street.
Here's hoping someone with the right know-how will lift the phoenix from the ashes.
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Of course, let me just get a grip. I forgot we have the powers to create and enforce laws. And I suppose the recent child benefit withdrawal was down to the people because they wanted it to happen and not the government? Get real. Yes we vote them in, but we have limited power and in my mind, that means they are in control.
Agreed, but the government has a keen interest in enterprise within this country. It needs to succeed. If it doesnt then we may as well give up now. The private sector needs the public sector and vice versa.
Was it that they couldn't attract, or was it based on price promotion, too little stock, bad reputation with suppliers, lack of credit facilities, being overburden with unprofitable stores? There are many reasons - not just one.
Jessops could survive. The online brand has got to be worth something. The one big thing that Jessops stopped doing a while ago was supplying its own brand of products. This is a very lucrative trade and has fantastic margins to boot. Yes, this was not the only problem, the management not having a clue, milking the company when it was not profitable. Although, I suspect this didnt help when top brass jumped ship a few months back.
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They probably pay an absolute pittance in corporation tax. But I don't blame Amazon for that. They wanted to open up operations in the EU. The largest single market in the world. And as part of EU laws they can have only one corporate base. Crucially you get to decide which country that is. And remember, the whole point of the EU single market is any European company is taxed once in their 'home' country.
So you are Amazon US. You are coming to Europe. Do you base yourself in the UK where you would pay 30% corporation tax? Or Luxembourg where the headline rate is similar but the powers that be will bend over backwards to do a secret special deal with you which will effectively bring that 30% down to near 0%?
Radiohead
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It depends whether you consider tax the only issue for a company. I don't.
Robert Peston explains why (talking about Starbucks)
http://www.bbc.co.uk/news/business-20639123
There are two lines of argument used by companies that are most aggressive in reducing their liability to UK corporation tax.
The first one is that they have a "fiduciary" duty to their shareholders (which broadly means that they can be sued or sacked by their shareholders if they wilfully reduce reported profits).
The second is that they do tons of other stuff for the community (so Google - which was criticised by MPs for paying relatively little UK corporation tax - flags up its contributions to an entrepreneurial hub in east London and its work with an education charity, inter alia).
But as directors of companies admit to me, all businesses have discretion about how they organise their tax affairs. The fiduciary duty on the directors does not oblige them to use the most extreme legal techniques to minimise profits and tax liabilities.
How so?
Well, there is what has been described as a "licence to operate" (an idea promoted by the Royal Society of Arts and the think tank Tomorrow's Company), which is broadly that the most successful companies over the long term are those that are responsible corporate citizens. Companies perceived by people, politicians and media as, in some sense, not making a proper contribution to the societies from which they extract their revenues and profits, will over time become marginalised within those societies - even resented by the customers and suppliers whose goodwill they require. So it is quite normal on company boards for there to be discussions about how zealous to be in avoiding tax - choices are available to businesses about where to locate costs.
And, to repeat, it is not always rational to maximise profits in countries where taxes are lowest and to maximise losses in countries where taxes are highest, if in doing so the licence to operate is eroded in a country where there are important customers. This was the thinking behind Starbucks' highly unusual decision to donate £10m a year in "pseudo tax" to HM Treasury's coffers for a minimum of two years.
As a prominent business leader put it to me slightly cynically, that £10m was a "marketing cost" (which, who knows, might be offsetable against Starbucks's tax bill in another part of the world). Starbucks felt more under pressure than most businesses to make this gesture because its hundreds of shops are natural targets for the kind of protests organised by lobbying groups such as UK Uncut.
But although Starbucks is more vulnerable than most businesses to such campaigning, it is not anomalous. And some would say that in a way it has joined the ranks of the protestors, by highlighting the discretion that boards have to pay or not pay tax. Which, of course, does not absolve the government from responsibility for writing tax rules in such a way as to prevent companies paying significantly less than the official corporation tax rate - which, of course, is not easy in a globalised world where businesses can move their domiciles and can shunt revenues more or less wherever they choose.
And here's the rub for the UK.
There does seem to be evidence that companies which think of themselves as British - by dint of who owns them - are more squeamish about minimising the tax they pay in the UK. Or to put it another way, the further away a board of a company is from the noise of the press in the UK, the anger of social media users, or the angst of British politicians, the less worried that board will be about the perception that its company is not paying its way in the UK. There may be a hidden cost of what has arguably been this country's central industrial policy of the past 30 years, which is that all businesses are for sale to foreigners at the right price: the systematic transfer into overseas hands of so many UK companies may have contributed to long-term erosion of corporation tax revenues.
"Enterprise" (wasn't that a buzzword of the 80s?) goes far, far beyond a chain of retail shops selling foreign sourced goods. A retail chain like that is fairly insignificant in the big scheme of things.
An "internet tax" simply isn't going to work, Amazon etc will simply ship from another country instead of here, losing ten times the number of jobs that that the Jessops collapse did.
Want to impose a higher VAT rate for net purchases ? okay, but there is already a get out, websites will offer "click and collect" systems where the monies are taken by an automated system at the pick up point.
Amazon already offer a system where you can pick up goods from a pre-determined place. In the US they are trialling a "same day" service for this.
Amazon have also made noises about taking a small counter in department stores (cheap rent) where you can pick up goods ordered online.
Jessops weren't too bad price wise on big ticket items, but the cost of smaller stuff like memory cards, bags, screw on filters etc was blatant profiteering and nothing to do with having higher overheads.
I think they tried to go too mainstream, look at Park Cameras - they sell anything and everything, have a decent online presence, run workshops/events and so on. In other words they add value around the retail operation, which means customers trust them and will go back.
Their prices aren't bad, but certainly not the cheapest.
Jessops could have being doing all of that but instead they went to being a box shifter, like Currys/Comet etc. No added value means no advantage over online. Even when individuals within the stores were avid photographers it seems management couldn't of cared less.
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They already offer that in the UK to your home if you live within certain areas.
from Domestic Deliveries:
Available to areas within the M25 and certain postcodes in Birmingham, Manchester, Liverpool, Nottingham, Sheffield, Leeds, Edinburgh, Glasgow, Bristol, Cardiff and Swansea
Not department stores, but they are starting to roll out "Amazon lockers". These are in local shops and you get emailed a code and a locker number to open it. Also, they use collect+ - chances are you have a local newsagents or similar who will accept the parcel for you, and then you can collect it in the evening.
What they lack is the ability to go and actually hold and test the thing before you order it - and I suspect that many people who were using Jessops for that then went home and ordered from Amazon (or whoever).
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Take that with a gigantic pinch of salt. There used to be loads of items available to me for same day delivery, pretty much everything that was prime eligible. Then I noticed one day there was a significantly less items available with same day delivery. I contacted their CS and they confirmed that my postcode was still eligible and were very adamant that I could still get same day delivery on most items. When I asked them to link me to a single item I could get delivered same day to prove what they said the CS agent was unable to find a single item, including ones I had previously ordered for same day delivery and was unable to offer an explanation. Take that as you will, but to me Amazon same day to Nottingham no longer exists.
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Heh, interesting. Being down in Folkestone it's never been an option for me but we do use prime a lot - next day is always fine unless they dispatch with HDNL who pretty much always fail to deliver (no great loss, it's another free month of prime and so far I've got 40 quids worth of amazon vouchers as compensation to put towards a new camera
)Darren
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I said similar earlier in the thread, and on further consideration see the likes of Amazon probably doing something like this in the future, as the tax regime starts to squeeze them and in a bid to drop prices and push profits move their warehouses to somewhere like Lichtenstein, with their volume they can easily still have a paid for next day service and free 3-5 day service, and only pay vat at 8.5% and 12.5% Corparation tax.
The way out of the High Street mess isn't more taxation, it's less taxation.
Lower rents (even if it has to be legislated rent control) and lower business rates for smaller businesses (a sliding scale on turnover would probably be fairest) so a small photography shop employing 3 or 4 people pays a small amount considering how little the local council does for them while the large multinational like Tesco down the road pays a large amount.
The fact the average business rates is heading towards £15k pa is ridiculous, considering how little they get, even refuse removal is extra. The fact so many charity shops thrive on the High Street by being exempt from business rates just shows how much they handicap a business.
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They are not exempt, but get a bloody big reduction.
I enquired about a lovely high st retail location for a studio last year and was ready to sign, but the landlord was a total and complete **** and then a charity jumped in and took it from under my feet. Just what the high st and the local council need - more charity shops!
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Exempt was probably the wrong word, but then a mandatory 80% relief + a further discretionary 20% relief that can also be granted means many charity shops pay £0 for business rates.
No, because they won't hold stock like Argos do, it'll be held in the warehouses and then dispatched when you order it.
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Dave1 said:
Quite a lot of what you say sound ok, but a sliding scale on turn over, sell a couple of 1Dx or D4 and the odd 600mm and your turn over will be pretty large, but a small profit.
If we want a better high st, we need to charge every shop the same rates, stop reduced rates for charity shops and stop them selling new goods, this will help other small shops compete on a more level paying field.
As we can all point to one somewhere the small camera shop can make a go of it, Bolton is becoming a real deprived shopping town, but Mathers of Lancashire keep going, I have notice they have really improved the website recently, and at last look were the cheapest place in the UK for a 5D III
big soft moose
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not really - the turn over a small tesco makes in a day would be more than that ( I used to manage an alldays convenience store and we were turning over circa 5k per day) - how many really top end cameras is a small shop going to sell ?
Nod
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On top of the big supermarkets' turnover, you also have to look at where a LOT of their pure profit comes from. They negotiate (or simply take) long credit terms -say 90 days, so they have 3 months between the goods being supplied and on sale and them having to pay for the goods. An awful lot of the stock is sold within days if not hours of arrival in store and paid for. Now, at the moment, interest rates are ridiculously low but 1/4 of a year's interest on many millions of pounds of turnover is still an extremely tidy sum. Also bear in mind that they sometimes plead that spoilage costs them - well' it would if they bore that cost rather than passing it back to suppliers "Well, 1/2 the caulis were unsaleable so we won't pay for them. What? You don't think that's fair? OK, we'll get them from elsewhere. What? You've got 100 acres planted just for us? Tough!" Plenty of the longer life stock (electricals etc) will be on sale or return too, so doesn't cost them.