The Perfect Storm – Storytelling #2
Christmas 1997, I helicoptered into the best year of Excel Clothing’s 10 year history. Full of excitement at taking on my new role as Managing Director of this successful ladies fashion chain, I had some grand plans for charting a new route for its destination. Toastmasters, if I only knew then; what I know now …
I had been blessed with a fortuitous life. I’m not saying it was easy or without its stresses, but I had been pretty successful. I’d always been a high energy individual, tenacious with stoic stamina. At the prime age of 35 I had been chosen to steer this ship into new waters. I was high on emotion.
Joseph Wright, a chartered accountant signed the purchase agreement at the Weymouth offices of Pengelly and Ridge on wet and windy November 25th. Joe smiled shyly, shook my hand and mumbled “Welcome Aboard Ms McHarrie” and handed over my own contract!
So there I am a week before Christmas. I’m looking around at what appeared to be a well oiled engine. Whilst watching Saira Sawtel, the fashion buyer studiously examining the stock inventory and cataloguing items to clear in the Winter Sale, I ponder my plans for the future.
The lull was short lived.
Saira arrived in the office just after Christmas with a huge grin on her face. “I’ve had the best Christmas present ever!” “What’s that then?” I smiled. “I’m pregnant!” she announced
I offered my congratulations of course; and thought oh pooh or words to that effect.
Saira spent four of the subsequent six months leaning over the side of the ship with debilitating morning sickness. In itself it might not have been a disaster except there were no records of forward orders. Guess what? There were no forward orders!
The rolling waves of disaster didn’t stop there.
By the end of January, I had found a hole in the accounts of £115, 000. Moreover a cash-flow deficit of £138, 000 that would seriously impact the first Quarter day of the year. This ship was listing. And of course the financial hole meant the proposed investment for growth soon leaked away.
I don’t know how many times Joe sat in my office biting his nails, looking to apportion blame. He recruited forensic accountants to investigate the gaping hole. Joe was uncomfortable fidgeting in his seat; he was quite obviously suffering with angry ulcers.
The concern for blame meant that no one was keeping their eye on other non-profitable holes. These were taking in water faster than we could pump it out. There were probably six of the 31 shops that should have been caste overboard.
After 18 months listing along I finally accepted we were no longer afloat. Mid September I sat Joe down with a strong black coffee and quietly announced. “Joe, we are trading insolvently. We have to stop buying”. He stared at me and ripped at his nails and shifted his weight “What if … what if I can find another £50k?” I shook my head. We needed a lifeboat, not a life raft.
The very day we called in the Administrators; Joe was admitted for an emergency quadruple heart bypass. Due to his poor health, the resulting fallout from the Administrator actions fell onto my shoulders alone.
We had no idea that they, the administrators, would rape and pillage the assets of the business. But they did. Far from assisting Excel Clothing to resolve its cash position, these pirates brought in friends and family to profit from our creditors misfortune.
When the ship finally sank it was a huge relief. I closed the last shop on the third of March in the year 2000. I am proud to this day that the store managers stayed with the firm until we pulled up the gang planks to their front doors. We had been through hell and high water together; fending off creditors, landlords and debt collectors. By far; the worst adversary had been the administrators.
I have always taken full responsibility for the demise of the business. There are many managerial decisions that I would do differently, if I had only known then; what I know now. It wasn’t just the financial debacle that sunk this ship. There were some essential energies that were missing that I could have should have done something about.
This is the true story; abridged as it is. I have another story of how it might have been with hindsight. It is a real shame that I didn’t know then; what do I know now