Philip Green in shopping centre acquisition

Are these early signs of green shoots? Excuse the pun, but Philip Green is involved, so that may well be the case.

Apparently Green is a secret backer to buy the O2 shpping centre in London's Finchley Road for 92m pounds. If he's involved, he may well have seen now as being an ideal time to buy and that the collapse in commercial real estate is nearing an ebb.

It seems that Green is closely monitoring the property market for opportunistic raids. Once suggestion is that he may be looking for departement store-style shops to showcase his brands.

Only this month Green decided to integrate BHS and the Arcadia brands, including Top Shop, Burton and Miss Selfridge, in addition to announcing a roll our of Top Shop in the US.

A real entrepreneur

Quantitative Easing - do you get that from Boots...?

Quantitative Easing - sounds like some deadly remedy from childhood days. A lethal cough linctus or on similar lines to 'milk of magnesia'... It congures up images of Victorian institutions ...

But in fact, as we all now know, it's a fancy way of saying Gordy is printing money. It feels a bit like joining the ranks of Zimbabwe or being in the Weimar Republic in the 1930's - but what are the implications for us all and what is likely to happen? It didn't work for Japan in the late 90's so why take this big last gamble?

Reading the press on this, my conclusion is that we don't have much choice. We're damned if we do nothing and seem to be critisicised if we don't do anything. But 75 billion pounds of new money - it's mind boggling.

A month ago I wrote about business needing a kick start instead of another rate drop. Yesterday the Bank of England dropped the rate to 0.5% - a new unknown territory. Now 'quantative easing' can begin apparently, as all the other firepower has been used.

What will happen is that the BOE will create 'virtual money' (not actually print cash) and use this to buy bonds and other securities from banks in the hope that they will use the money to lend to business and consumers.

The big risk is that the banks will hoard the money and sit on their hands, and nothing will happen.

Let's hope not, as there's a lot staked on this, and not many options left.

Who has been swimming naked....?

As you will read from previous posts, I am determined to hunt out and highlight, wherever possible, the upside of the current downturn.

It was Warren Buffet who made the memorable comment in 2007 'When the tide goes out, you learn who's been swimming naked'. This has been particulartly the case in the US with Maddof (pronounced apparently as 'made-off' as in 'made off with your money'), and more recently Sanford, but I wanted to turn this analogy another way.

Now the economic tide is out, we can see who has been swimming naked. There were no great shocks when Woolies went down - we all knew it had been on the cards for years, and that the business had survived due to the boom years. Just as a below-average employee can survive in a large corporate environment when they should have been fired years before, so too poorly performing businesses seemed to get swept up in the frenzy.

The difference in performance between mediocre and great business in economic boom time is far smaller that you might think; in difficult times this difference can become a chasm. Therefore businesses that offer genuine value to customers will out-perform the rest - and dramatically so. So what differentiates the well dressed swimmers from the embarassed?

Some are well-placed because of the demise of their competition. Take for example Mothercare - a strong International business which is capitalising on the demise of Woolworths and Adams. Trusted brands that have been doing the right thing for a long time are also cleaning up - Pizza Express and McDonalds for example, are benefitting from those customers who believe they offer real value for money.

Niche players are thriving too. You wouldn't have thought of Whitbread as niche, but they have focussed on 3 core areas and have businesses that are performing well in the current environment - Premier Inn, Costa and Beefeater.

Have you noticed... the BBC have created a sub brand for the Credit Crunch?!

Have you noticed that the BBC have a new sub brand?

It has has a new logo and always appears in the News. It's called 'recession' and has a red squiggly line bouncing up and down (more down) with an arrow on the end.

So .. what will the next sub brand be? My insider tells me it could well be 'recovery?'. The question mark is important but what's the logo going to be .... the infamous green shoots...

But when will they start using this?? Meetings are still ongoing at the Beeb.

Then apparently there will be a 'recovery' sub brand so that we all enter into a new golden era...

Let's wait and see what happens. No doubt Peston will enlighten us.

Lord Carter gives keynote speech on 'Delivering Digital Britain'. We were there.

The Crunch Breaker and the Leaptomorrow team (www.leaptomorrow.com) attended a breakfast function earlier today where Lord Carter, Minister in Her Majesty's Government for Communications, Technology and Broadcasting gave a keynote policy speech on the future of Digital Britain.

The eagerly awaited Carter Report revealed little newness and was a telling tale of the position the UK Government is now in. 'We're not quite sure what to do' was mentioned various times by Lord Carter, but in his brief overview of the report, which he has led, he highlighted several key areas the UK Government will focus on in their digital policy, which are briefly as follows:

1. Infrastructure - the Govermement have a commitment to link up to 90% of the UK population to high speed digital broadband, although no time span was given.

2. Content - the decision to turn off analogue for TV would not be followed in other media such as radio.

3. Proficiency - trying to balance the 'openness and freedom' of the Internet with finding solutions to illegality and piracy.

4. Digital Government - there is a commitment to delivering easier access and allowing the user to trail the goverment bodies. Plus Universal service.

5. Training - people who hold the future should be trained. Need to retain know how in the UK where we lead in design, graphics and the computer games industry.

All very interesting (!?) but luckily we had two other speakers offering challenging questions too - Neil Burkett, CEO at Virgin Media and Paul Bazelgette, sector guru, and responsible for Big Brother among other things..

- Public Utility vs Boosting the Economy - needs to be the latter. All very well making broadband available to all but we need to see a financial dividend. We need to make digital far more commercial and driving entrepreneurial opportunity. Currently a social dividend exists; and economic dividend does not.

- Old Organisations vs New Organisations - there's no point in the Government pumping money into yesterday's industries. We, as taxpayers, should not be protecting old business models that cannot be sustained. Allow these to wither and die.

And the lessons for small and medium sized businesses?

Think laterally. How can you use all aspects of New Media and grow your business? Think beyond your normal boundaries - the government are committed to widening fast speed connections, both land based and wireless. We, as entrepreneurs are those who have to come up with the triggers to drive new growth.

One thing is for sure. Things will be very different after this recession. There will be winners and losers. Let's make sure we're in the former.

Do your research before going International - Tesco got it wrong

Yesterday's Sunday Times ran an article which began 'Tesco admits: we got it wrong in the US'.

Tesco. The one company that doesn't make mistakes. The company that drove a customer loyalty program to beat all others, boasting that it knew every minutae of millions of shoppers' habits in the UK. It knew its customers buying patterns so well that it could market product at the right time of the day and in the right part of the store.

So what went wrong in the US? It seems that they didn't take enough time to find out about their customers in this new market. Maybe they just thought they could apply the same models again.

But that's the key with International growth - it's an old cliche but it really is a question of 'Think Global, Act Local'. Make sure you get to know your target markets passionately.

So what went wrong with Tesco?

It seems that their US operation, Fresh and Easy got its early market research wrong. Marketing Director, Simon Uwins said 'we went into people's houses, talked to them about food and food shopping. We went into kitchens and poked around pantries'. This was all before the launch of 113 stores on the West Coast.

Unfortunately, he now admits, they didn't go into the garage where they would have found huge chest freezers full of stockpiled meat bought on special offer. In the US, it seems, consumers are driven by the weekly 'special offer flyers' so common in US food retailing. Tesco missed this and didnt realise the market was so driven on price and tactical manoeuvering - they have suffered and now have put the full roll out of 200 stores on hold for 6 months.

So the lesson is simple - make sure that every new market is researched fully. It doesn't naturally follow that the same format will work in all.

Gloom, doom and despondency. Where is the positivity?!

The snow. The blizzards. The cold. And then the rain.

The grey skies day after day. Postcards from someone 'sunning it up' in the Caribbean - wish you were here .... if only....

Gordon Brown. Miserable as hell. England lose the Football, Cricket and Rugby. More snow, rain and wind. And then Darling telling us the economy is as bad as it's been for 100 years. Let's emigrate!

Then on Monday morning the rain stopped, the temperature rose and the sun shone. I noticed that dawn was suddenly earlier. It felt as if Noah had got out of his boat. In a funny sort of way it felt that things may get better.

I know not a lot has changed in the news, but positiveness is so important - personally and in business. We need that 'positive' factor back; that 'can do' attitude, and if the oncoming Spring and change of weather can put a 'spring' into our step, then that can only be a good thing.

Swimming against the tide

The Crunch Breaker is on the lookout for people and businesses that are swimming against the tide in this economic downturn.

So, hand's up as to who has heard of a new retail chain called 'Other Criteria'? It's been open for 6 months, with more in the pipeline. Both shops sell artworks (by established artists and newcomers), prints, posters and publications, as well as items ranging from key rings and T Shirts (by artists Jeff Koons, Matt Collinshaw and Sir Peter Blake), to charm bracelets and deckchairs.

With world-class merchandising and fabulous shop-fits, the concept defies every notion of site research: one store is on Bond Street and the other off Marylebone High Street, two of the most expensive streets in London.

Oh yes - and while the key rings retail for a mere 3.50, and T Shirts for 25-45, the charm bracelets demand a depression busting 25,000 pounds!!

The founder? None other than Damien Hurst, who is proving a successful businessman and interesting shopkeeper. Hirst, who pocketed 110 million pounds after an auction of his works at Sothebys in September said of the new shop 'I don't think art has ever been as popular as it is today..'

Watch this space...

5 good reasons to have your own Blog site

I'm amazed by the Blog-resistance of many small and medium sized businesses. You hear comments like ' I dont have time to Blog', or 'It doesn't have any relevance in my industry'. Or even 'what is a Blog anyway?'. But in this economic downturn, now is the time to raise your profile, and Blogging is a great way to do this.

So, to help focus on the benefits of Blogging for your business, here are 5 reasons you should be thinking of Blogging as a vital extension of your business:


1. Become a Thought Leader.

Stand out from the rest with your opinions and thoughts. This shows great thought leadership, professional insights and leads to debate.

2. Engage in dialogue with your customers

It's a great was to engage in a more informal environment. You send out mail shots and email newsletters, so why not enter into a different kind of dialogue. One that really brings you closer to your customer.

3. Every Blog is an SEO opportunity

Plant words or phrases to raise your SEO profile. Sow subjects you want to promote and discuss these on your Blog. Done effectively, this will raise your SEO rankings overall, which can only be a good thing.

4. Blogs are like bait

Blogs encourage people to link with you because they are interesting and informative, far more than a standard website where you are encouraged to click on a promotional icon. Blogs are not seen as corporate or too sales focussed, and people often feel they want to connect with the 'thought leader' rather than a big corporation.

5. Humanises your brand

Your blog will show the personal side of your brand

All too often, there's the excuse of 'I don't have time to Blog...'

In reality, you don't have time not to do so....

Dare I say it? A bonus can be a good incentive!

It's a touchy subject right now. Prescott wants an end to the bonus culture. Brown says it all has to end. Even Obama says things have to change.

And it does. But not completely.

It's easy for us all to be swept along by the anger being felt by the big bank bailouts which have been made many times more poignant by leading banks insisting on bonuses being paid out for 2008.

But let's get things straight. Big banks and crazy City bonuses are very different from smaller businesses giving incentives to key staff to help drive the company forward. Sales and key staff need to be incentivised.

Only this evening on an LBC radio phone-in, the presenter was demanding the end of all bonuses. He didn't get a bonus, he claimed, so why should anyone else?

The truth, as always , is somewhere in between.

City bonuses must be made more balanced and based on longer time scales. The reason why Lehman Brothers went into overdrive (and overkill) was that big incentives were being given to make money fast, rather than think of the consequences over a longer period of time.

UBS have just re-written their bonus structure, giving key staff 40% of their bonus now (based on success) and the remaining 60% being put into an escrow account depending on the performance of the business the following year. This seems logical for this type of industry.

For smaller businesses, it's vital that success continues to be recognised. Set good clear personal key performance indicators (KPI's) and make sure those who matter are rewarded on the overall profitability and performance of the business.

Leverage the weak Pound to drive export sales

It's tough out there - we all know that. Day after day of depressing news, business failures and more uncertainty.

But in the UK we have a potential upside that is stronger than in many other markets. The weak Pound.

Sterling is more competitive than it's been for years, and despite a relative rally against the Euro at the time of posting this Blog, the UK currently has a great competitive edge in Europe, Asia and the US.

You just have to walk down Oxford Street or go into Selfridges in London's West End to see the hoards of Europeans snapping up items as if it's the first day of the Sales. The UK is clearly a very attractive place to come and buy goods - much in the same way as we all herded over to New York 2 years ago when the Dollar was 2 to the Pound. We now need to step up a gear and and get in front of new customers in new markets overseas.

Of course a cynic will argue that there's not much use trying to build business internationally during a global recession when other markets are in a bad way too, but think again; there will always be a demand for product that is innovative, well designed and priced competitively.

As a nation, we have always been good at the first two, but fallen behind when compared on price. Now we have the advantage of all three, without having to compromise on margin reductions and cost cutting.

In future Blogs, I'll point out where some of the opportunities currently lie and how to tie them down.

Sterling's a dud in the East

Last week the Crunch Breaker was on business in the Ukraine. All very swish and glam in a top 5 star Hotel in the Capital.

'Could I possibly exchange 100 pounds Sterling for local currency?,' I asked to the obliging and friendly front desk staff.

The response was a shock to a seasoned traveller.

'Sorry, but Sterling is no longer acceptable here. US Dollars or Euros would be fine though'.

Adding to the grief the front desk lady asked ... 'what is it really like back in London - it sounds so awful in the News....'

An interesting time to be a British pioneer abroad...

Seize golden opportunities in a downturn

'Most managers look for golden opportunities when times are good all and is well with the world. This is a mistake. The best one's often arise during downturns'. So wrote Donald Sull last week in the Financial Times.

Ian King, CEO of BAE said recently in a speech on the economy that 'the strong will get stronger and emerge with greater market share'. How true this is, especially in the current market.

Look at the vultures circling around the carnage left by the collapse of the Icelandic Banks. Philip Green jetting off to to Rekjavik to pick at the bones of ailing UK retailers. He may not have been successful then but he saw a golden opportunity to acquire businesses that were vulnerable and took first mover advantage.

Some smaller entrepreneurial businesses I talk to see the present as the time to grow; take tactical advantage and come out stronger. These are bold moves in uncertain times. But it's easy in a downturn to focus exclusively on managing threats, whilst losing sight of the opportunities out there. To counterbalance this, business owners need to ask themselves if they are retreating from opportunities they can seize? Does our competitors' pain create an opening for us? Can we snap up key resources at bargain prices?

All the economic bad news can be balanced by the reality that every downturn has an upside. Business leaders need to recognise these opportunities during hard times and seize them.

Another 0.5% rate cut isn't going to help at all

Yesterday the Bank of England reduced interest rates by 0.5% to a new historic low of 1.0%. There was 'widespread' expectation that this would happen and 'be a good thing'. But is it?

The belief, held by the Government, is that this latest reduction will encourage us all to spend more. Just like the 2.5% reduction in VAT was supposed to do. This reduction benefits those on variable mortgages but not savers. Those who actually benefit are more likely to hold onto the savings than to go out on the High Street and spend.

And what about small and medium sized business - the backbone of the UK economy? This latest reduction won't help at all. It's the lack of available credit that's killing these businesses, and the sooner the Bank of England and Goverment come to their aid the less likely they are to go out of business. Only today with news that there was a 220% increase in insolvencies in the final quarter of last year serves notice of the worsening situation.

A business needs the ability to borrow to drive itself forward. A 0.5% rate cut won't do anything. In the meantime Banks sit on their hands and pay huge bonuses despite massive bail outs.

Something's gone wrong.