Page 323 - James Caan - The Real Deal

31 · You Win Some, You Lose Some

£240k a year, so I asked to look at the accounts for that branch.
Guess what? It was only making £40k a year and the review would
wipe out the profit.
We needed to find a way we could either cut costs or increase
profit, so I walked over to the branch to take a look. I went at
breakfast time: it was packed. I went at lunchtime: you couldn’t
have got more people in and the staff were working their socks off.
This gave us a really big problem: we couldn’t get any more
customers if we tried and we couldn’t lose any staff. So I asked
myself if we could put the prices up, but the only thing Benjy’s had
going for it in the crowded lunchtime market was price. If we put
a cheese sandwich up from £1.25 to £1.50 we’d be at the same
level as M&S, so customers might as well go there as they could
pick up something else in their lunch hour at the same time.
I really couldn’t see a way forward, so I called together the most
senior people at Benjy’s – the product specialist, the chief exec, the
finance director, ten people in all – and asked them what we were
going to do about the Oxford Street branch.
‘You guys have been here longer than me; you know the
business inside out. What are our options?’
Two hours later we had come up with nothing. I think it was
then that I finally admitted what I’d suspected for some time: we
weren’t going to be able to turn it around. It was just too hard,
but it was still losing £100k a week so we had to do something.
When Hamilton Bradshaw bought the company from the
administrators what we had actually bought was a licence to trade
for six months. That meant there was a six-month window in
which to ratify the deal. At this point we had owned the business
for five months and after serious discussion we decided we should
simply accept a failure and take the loss on the chin. I couldn’t see
a way of turning it around: even if we worked on it full time for
two years, I didn’t see how it was going to stop losing money. So I
called the administrators and told them to look for another buyer.

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