Sardines do a brisk trade in the High Street, so long as no one opens the tins
CHRISTOPHER FILDES
0 ne of the first laws of trade is that that there are two kinds of sardine. One is for eating, but the other kind is for buying and selling, so there is no need to open the tins and risk disappointment. Every so often, this perception sweeps through the High Street and store wars break out. Retail is detail, as we all know, and hard work and competitive, too, so why bother when it is so much more fun to buy and sell shops? More rewarding, even, if you get your timing right. Just at the moment Top Shop, Miss Selfridge, Dorothy Perkins, Burton and Evans (the friends of the fuller figure) are all in the shop window, arranged in a job lot and labelled Arcadia. They have caught the eye of Philip Green, the retail kingpin, who wants to bid for them — helped, so he thought, by an Icelandic retailer called Baugur, which would let Mr Green buy its shares in Arcadia and then buy three groups of stores back from him. This plan has been complicated by the Reykjavik police, who have come in with a possible rival approach from Felt Collars. Terry Green, another retail kingpin, has his eye on Mothercare, which was a decent business before Roger Seelig, the wholesale sardine merchant from Morgan Grenfell, put it into a job lot called Storehouse. Since then it has blighted one career after another, but this Mr Green says that, if he is given enough shares, he will kiss Mothercare better. Outside in the street, some customers may be less eager to shop till they drop, given that taxes are rising and confidence falling and higher house prices mean that their incomes are already mortgaged — but what do they know? They are just the sort of people who would spoil the market in sardines by opening the tins.
An Icelandic saga
IT is the saga of Baugur, among all these plain tales from the High Street, that now obsesses me. If Baugur is really the biggest retailer in Iceland (population: 282,845) how big are the smaller ones? What does Baugur sell — anti-freeze, fish-hooks, souvenir cod-liver-oil capsules? Can there be some confusion with Iceland, the frozen food specialists, lately renamed the Big Food Group and showing signs of meltdown? What prompted the boys in horned helmets, just as Philip Green was in midbid, to raid Baugur's offices? Its chairman and chief executive deny any wrong-doing but are under investigation — for bauglury? Fraud, we are told. For their company's credibility, as a crucial ally in this round of store wars or, later, as a force in the High Street, this can only be a bad baugury. Mr Green may need to say to Baugur: Off.
Sir Andrew's worry list
SIR ANDREW LARGE is a thinking man's banker. When he was asked to chair the Securities Association, he conscripted his headmaster, John Thorn of Winchester. What this now-dismantled monument to regulation in the City needed and lacked, in its chairman's opinion, was an original mind. Whether he will say as much of the Bank of England we shall have to see, but his appointment as Deputy Governor elegantly fills the sit, that had become so embarrassingly vac. Financial stability, which will be in his care at the Bank, is his special subject, or one of them — and in a week when Japan's shaky banks can spook the world's stock markets, and Citigroup, the biggest financial conglomerate of all, can lose one-tenth of its value in a single day's trading, stability must be high up on the worry lists. I look forward to hearing Sir Andrew on the theory and practice of bubbles. The one that burst in America has left Alan Greenspan to wipe the soap off his face, explaining that it was beyond the capacity of central bankers to say with metaphysical certainty that a bubble existed. It was not beyond mine.
Lloyd's anniversary
SOME tactician at Lloyd's of London has arranged for its members to assemble in general meeting on Thursday of next week, 12 September. They can then spend the previous day contemplating the biggest loss in insurance's history and, with that anniversary out of the way, can decide whether this is a business they want to be in. For them, as for Lloyd's, it has ceased to make sense. The idea that the bill for skyscrapers and their inhabitants should fall on the shoulders of a few thousand country gentlemen, who would pay up in full as a matter of honour, can only be fantasy. Its unique structure, which once helped to make it competitive, now counts against it; Lloyd's has been losing money and market share, and Bain, the consultants who have been advising Lloyd's governing council, have persuaded it that, without reform, the market has no future. The Council will ask next week's meeting for authority to take its plans forward, and the Association of Lloyd's Members is recommending its constituents to vote against.
The Galway blazer
THE Association must suspect, as well it might, that Lloyd's wants to say goodbye to its traditional members with their annual joint ventures and unlimited liability, and is digging in to fight their corner. Michael Deeny, its chairman, has called the Council's bluff before now. When it put forward what was supposed to be Lloyd's final offer to members, a decade ago, Mr Deeny, then at the head of an action group, waved it aside. This was no more a final offer, he said, than an opening bid at Galway horse fair. Some of his members are getting, and seem to be taking, offers to buy them out. I dare say that all this will culminate in a series of final, final offers that Lloyd's and the ALM can recommend, but this desultory horse-trading has been going on for a long time, and time is no longer on this market's side. When the Council and the ALM come to action stations next week, they need to remember Borges's phrase for the Falklands engagement: two bald men fighting over a comb.
Founder's kin
THE head of a long-established City family is the latest to find himself asked to show his passport and gas bill. The Financial Services Authority insists, so his bankers mumbled: we are required to know our customers. 'Well, here's one thing you should know,' he told them: 'My great-great-greatgrandfather founded this bank.'
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