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Barclays not asset strippers.

Byline: Bill Gleeson

VER since they acquired Littlewoods in October 2002, I have heard a lot of talk that the Barclay brothers are asset-strippers. The charge is made every time a story emerges about a sale of one or other of the Littlewoods businesses.

Yet, while they are certainly in talks to sell the high street stores, twins Sir Frederick and Sir David can hardly be said to exhibit the behaviour of asset-strippers Far from breaking the business up, they have made it bigger, through the acquisition of GUS catalogue brands. Under its new management, the firm has invested in properties for its staff in Liverpool. Its financial services division has moved to new pounds 10m premises at Aintree, while the home shopping arm is moving to a new pounds 30m head office at Speke.

Nor is the latest episode with its Index catalogue stores an example of asset-stripping. The majority of the business is to close.

Asset-strippers, on the other hand, seek to raise cash from sales, not close businesses.

True, they are receiving pounds 44m from the bits of Index that they are selling, but that sum is a drop in the ocean compared to the near pounds 1.5bn that the brothers have spent on their Littlewoods and GUS acquisitions.

Nor have they asset-stripped at any of the other businesses they have owned. They did fire journalists at the Telegraph, but they are investing in new print facilities for the paper.

It is sad for the 3,200 staff who are losing their jobs at Index. Added to the 5,000 redundancies at Rover, we have had more than 8,000 job losses within the space of a few days.

While they are in very different economic sectors, both businesses share one thing in common. They were both bad businesses. Index hadn't made a profit in its 20 years of trading, while Rover didn't have the funds for reinvestment in new models.

The fact is that under the previous highly benevolent ownership of the Moores family, Littlewoods' staff were cushioned from the harsh realities of the market place. The Moores didn't practice hard-headed financial management. In the last years of their ownership, Littlewoods was barely profitable as businesses like Index held the firm back.

If the Barclays sell the rest of Littlewoods stores in a month or two, they will be left with the bit of the group that really interested them. Home shopping has potential, particularly through the internet. It's there that the future lies
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Title Annotation:Business
Publication:Daily Post (Liverpool, England)
Date:Apr 20, 2005
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