The man with a soft spot for Reject Shop
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The Reject Shop. The name does not exactly inspire confidence, and the business has been chipped and broken more times than an old cup.
Losing money and in receivership, the 31 furniture and houseware stores have recently been a millstone around the necks of their owners.
Most businessmen would hesitate to buy Reject Shop once, let alone twice, but this is what Jeffrey Gould seems set to do.
In February 1994, as chief executive of Upton & Southern, a sleepy northern department store chain, Mr Gould paid pounds 2.3m for the Reject Shop chain. The deal quickly turned sour. After allegations that stock levels were less than expected, Mr Gould issued a flurry of hotly contested writs against the vendors. The 51-year-old entrepreneur quit in March and two months later Reject Shop collapsed into receivership with debts of pounds 8m.
But Mr Gould is favourite to purchase 10 of the stores from the receivers on Monday. It is believed flagship sites in Kings Road and Oxford Street in London are not included, though another, on Tottenham Court Road, is. Up to 15 shops are expected to be sold to other retailers, including Superdrug and The Pier, a US furniture group.
Scott Barnes of receiver Grant Thornton will only say that negotiations are at an advanced stage and that the total sale should produce between pounds 2m and pounds 4m.
What is it about the dowdy, old Reject Shop stores that Mr Gould finds so attractive. Is it the snazzy logo of bright red italics on a chequered blue and white background? Is it the pounds 15.99 director's chair the stores sell so many of? Or perhaps the novelties that appear around Christmas, such as juggling balls and troll-like dolls that grow grass as hair when placed in water.
It can't be the balance sheet. In the six months to January, Reject Shop made losses of pounds 1m on sales of pounds 15.8m. Some stores were closed under Upton & Southern's ownership while others were re-branded as RJs, a smaller, more upmarket format. Ron Trenter, Mr Gould's successor at Upton, felt that Reject Shop's name gave the wrong impression when only a small proportion of the goods were "rejects" or "seconds".
Analysts are divided on whether Mr Gould can make Reject Shop work. "Buying it again is not as mad as it sounds," one said. "A lot of the problems were down to stock problems rather than bad trading."
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