Barclays waves goodbye to £30m B2B investment
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Your support makes all the difference.Barclays Bank has shelved its business-to-business venture after investing £30m in the project because few companies have taken up its services.
The venture, called BarclaysB2B, which was given a high-profile launch in December 2000, was closed down quietly two weeks ago after Barclays decided the paltry return the subsidiary has attracted did not justify any further investment.
The business, which was based in London, had 66 employees and a few staff working on contract. Barclays said it was still considering how many redundancies it would make, but stressed it was "keen to keep good people within the business".
B2B was created to raise the profile of Barclays' business consultation services in an attempt to boost its profit from business banking. B2B offered advice about how companies could improve issues such as managing their supply of goods or making the process of attracting tenders for major contracts more efficient.
The bank said it attracted 50 blue-chip clients, including the Co-op retail chain and the law firm Clifford Chance, since its inception. But it admitted this was not a sufficient number to keep the business going.
"We proved we had world-class expertise but if companies don't bite the bullet and use the service, there comes a time when we have to take a decision about our investments," a Barclays spokesman said.
The bank attributes much of the slow take-up to the current economic conditions, which it says have made businesses unwilling to spend any unessential money that would affect their bottom line, even if in the long run the advice should help companies to trim costs. Of the B2B staff, Barclays is expected to keep on Alison Hutchinson, the 32-year-old former IBM executive who was recruited to head up the venture. The bank said it expected there would be a role for the senior management of B2B in setting up an advisory service for Barclays itself in an attempt to improve the internal management of the giant bank.
B2B was aimed at companies with a turnover of £100m or more. The customers it does have on its books will be handed over to Accenture, the consultancy service spun out of Andersen.
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