What exactly went wrong for Littlewoods?

Clogs to clogs in three generations. It’s the Lancashire saying attributed to manual workers, hence the clogs, who would predict as they saw someone get rich that the family would be returning whence they came, before too long. The fortune would not last beyond the grandchildren.

At first sight, the victory in the High Court this week of Matthew Velarde, grandson of Cecil Moores, co-founder of the Littlewoods pools, mail order and stores group, disproves the caustic, jealous observation. Velarde won the right to an equal share in the substantial estate of his late mother, Patricia, daughter of Cecil.

She died in 2017, aged 86. Patricia had three children and it was claimed only two, Christian and Rebecca, were meant to inherit. Matthew persuaded the judge otherwise and he now receives his third.

Apart from the bitter feuding the case exposed, it cast a spotlight on a famous business name, once the largest private company in Europe, the biggest family-owned firm in Britain, employing 25,000 people across retail and betting.

In that sense, clogs to clogs is wrong – the Moores remain exceedingly wealthy. Together they’re worth an estimated £1.2bn. Of the brand that brought them all their money, however, there is barely anything left.

The pools arm was sold in 2000, the shops and catalogues side was bought by David and Frederick Barclay, in 2002 for £750m. Littlewoods still limps along as a retailer online but Littlewoods Pools is no more – absorbed into a group called The Football Pools, again accessible digitally.

Like a testament to a vanished empire, the vast, landmark Littlewoods Building in Liverpool had lain empty from 2003. It was ravaged by fire in 2018 and is now being converted into a film studio.

It’s possible to look at the Littlewoods demise and conclude it was inevitable. The pools operation was hit hard by the advent of the National Lottery in 1994. Until then, the only chance of winning a seven-figure jackpot from placing a small stake was by playing the football pools. There were three leading players – Littlewoods, Vernons and Zetters, and Littlewoods was top dog. Instead of relying on football results, Lottery punters could simply choose six numbers and land an even bigger prize. Subsequently, the rise of online gambling further damaged the pools’ prospects.

Likewise, the stores and mail order could never hope to see off the internet and once that took hold they were destined to fail.

That’s one argument. Another is that plenty of other businesses were in the same predicament and evolved and continue to succeed.

Littlewoods was known all over the UK for gambling. The industry exists and thrives but without Littlewoods. Similarly, the shops were to be found on more than 100 high streets and the company’s catalogues that sold all manner of items were a familiar sight in many households. Another firm that ran shops and mail order, and was similarly middle of the road, middle-brow, was Next. This year, Next should make profits in the region of £700m.

So, what went wrong for Littlewoods? John and Cecil were the sons of a bricklayer. They grew up over a pub in Eccles, Lancashire. In 1923, John launched the football pools. In the first year, it made a loss but John persisted. Then came the mail order and the stores, and the partnership with Cecil.

John, the more senior of the two, had four children – two boys, two girls. The boys went to Eton and the girls to Cheltenham Ladies. None of them displayed his business acumen and critically, his hunger.

John retired as chairman, aged 81, in 1977. He handed over the reins to his son, Peter. John could not stay away – for the next three years at 10am on Mondays, Wednesdays and Fridays without fail he would go to his office on the 11th floor of the company headquarters and be there for three hours. John also kept his seat on the board.

Peter, an opera buff, was not up to the task. Under his stewardship, Littlewoods profits fell, from £49m to £11m. This was too much for his father, 84, who took back the chairmanship in 1980. John was chairman for a further two years, retiring again in 1982. Except even then he didn’t go, he carried on turning up at the head office three mornings a week same as before and attending board meetings until 1986, when he reached 90.

The Moores brought in able external managers who seemed to be steadying the ship and arresting the decline. They had a vision for the business and were planning to make changes. This was too much for some senior members of the family; Betty or as she had become, Lady Grantchester (Sir John’s oldest child, she married a peer and died in 2019). They convinced themselves that the “hired help” were plotting a takeover of the group and were intent on becoming rich at their expense.

Private detectives were charged with spying on the outsiders and following their movements. The management rumbled what was going on and a row erupted. It was a bizarre and unedifying episode, sad really, which ended with directors resigning and ultimately, with the break-up of the company.

It’s easy to blame Sir John for sending his children to fee-paying schools and sending them down a gilded path that was quite unlike his own. At Next, Lord (Simon) Wolfson, the chief executive since 2001, went to Radley and studied law at Cambridge. But then his father, Lord (David) Wolfson, did the same, attending Clifton College and Cambridge where he read law and economics.

Perhaps the Wolfson dynasty was lucky. There was another difference, though. When Simon took charge, Next was a publicly listed company in the FTSE100. Simon’s appointment was met with accusations of nepotism from the City, something he had to work hard to disprove. Despite numerous approaches from bankers, John and Cecil would not float or as they saw it, “sell” their business.

The Moores aren’t exactly wearing clogs but where Littlewoods is concerned, the Lancashire adage has a ring of truth.