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18/08/10 - Crispin Odey "looks forward when others can only see the past"

I was sitting in the Virgin Atlantic Clubhouse Lounge in Heathrow the other day and picked up a copy of a paper called Financial News. It is a paper I have rarely seen, and never read. Yet inside the edition that Virgin had left out I found a fascinating two page feature on Crispin Odey written by Harriet Agnew and Liz Chong.(http://ow.ly/2rjkq ) It appeared to be part of what the paper calls the FN100 Most Influential. He has been spectacularly successful in the City of London since he founded Odey Asset Management in 1991.

I hope that some readers of this blog will recognise the Odey name. Until the recent refurbishment  a picture of George Odey , Crispin's grandfather, was on the wall in the main lecture theatre.  And alumnus Alec Finch tells us "When I was staying at the Lairgate Hotel, Beverley a couple of years ago I noticed the very fine oil painting of George and I believe it was painted by Fred Elwell a Royal Academician and highly sought after local artist". Better known, though, to many will be Dick Odey, Crispin Odey's father, who was Managing Director of Barrow Hepburn in the 1960s and 1970s. Within the leather industries both Odeys were controversial. George for the way he came to the helm of the company in the early 20th century and Dick for the way that he ran it.

Barrow Hepburn was a big animal

Barrow Hepburn was a big animal, and Dick adopted a strategy for growth that we now recognise as being misguided. He went for critical mass and bought up one ailing UK side leather tannery after another. He believed that the UK industry would shrink to the size of the UK kill and that if he had a majority market share he would be in a better position to bargain with the domestic shoemakers. What he missed, perhaps understandably back in the late 1960s, was the arrival of globalisation in the leather industry. Since the industry has always been global perhaps we should call this a rebirth rather than a new thing altogether, but however you view it the outcome was that the UK shoemakers preferred to go to Brazil to get cheaper leather than to stay in the UK and pay more. And what is more when the buyers travelled they found that British leather had slipped into a rut and in aesthetic quality and fashion sense was far behind what the rest of the world was making.  In the UK tanners were steeped in a tradition of corrected grain leathers and making the break to the natural full grain leathers coming out of Italy proved impossible for most UK side leather tanners at the time and accelerated their closure. In the latter days Dick Odey saw this and he threw money at new installations and brought in overseas technical experts such as Wolfgang Bolter to try and force a change. Those of who were there know how  hard we tried but frankly it seemed an impossible battle.

Curiously it was not this that ended the episode for Dick but a catastrophe in Scotland for which Dick was not responsible.  He had noticed that a hide trading business BH had there seemed to be overtrading so that the financial results did not match what he understood was happening.  He asked the accountants to check and then the auditors. Both came back saying all was OK. I remember well what followed as he and I were then to tour BH's facilities in New Zealand. I flew from Paris, where I was living at the time and he from a vacation in the USA. A telephone call and a telex found him transiting in Hawaii and he was called back. The loss in Scotland had indeed been real and amounted to £1.6m - a huge amount at the time. Two years later the auditors admitted liability and in the first case of its kind repaid the £1.6m  and actually the company overall never went into loss, but Dick lost his job over it. Sadly he was a big company man, and all his subsequent ventures were doomed to failure, leaving his son Crispin to make his own way in the world.

Yet reading the article about Crispin Odey you can recognise the many great things about his father. Crispin has had the advantage of entering the right industry at the right while his father entered the leather industry right at the start of its UK decline.  In describing Crispin the article says "Odey is seen by some as almost a throwback to another era, when traditional stock-picking and client relationships were paramount."  Without question Crispin is a better strategist than his father and he sees the future better, but for those of us who worked with Dick we liked his vision -the global moves like the purchase of Rizzi and of chemicals in the US. He was trying to put together a leading strategy  at a time of global change and some, of whom I am one, would have liked him to have been allowed to stay in place to see where the process would have taken him.

Crispin Odey, we are told, is a "hard headed businessman. He's got a lot of imagination, courage and patience. One of the reasons he has been so successful is because he has been willing to take a different opinion to other people and back it up".  Crispin Odey is a man of the times.  Both his father and grandfather were men of their times and in watching the latest generation do well we see a different person, yet much that was good of the old.  For those of us who actually worked with Dick Odey we found much that was admirable in him. He tried to build a big plan for the future and in doing so worked hard with to help all his staff develop and utilise their skills. The article says that Crispin likes to have a good working environment and remunerate his staff properly. Just like Dick.  Barrow Hepburn was a pressured environment but it was a good place to work.

Note: this item will also appear in my blog on the University of Northampton website

 

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11/07/10 - Spamming from Sialkot

I like Sialkot. I enjoyed visiting the 19^th century Anglican Cathedral, recently restored, and the hospitality of the troops at the border with India. It is a sad border, really, since there has been fighting there and Sialkot would be much richer if no border existed at all. Yet it is still a vibrant place with a new industry funded airport.

Sialkot nestles in India’s Punjab Province. While ancient Cordoba had silver and leather as the main industries Sialkot today has leather and medical instruments. The leather trade has been made famous by soccer balls, first made for the British Garrison 130 years ago, but now we see more low priced gloves for motor cycling and other sports.

In the last few year Sialkot has become famous for another thing.  Exceptionally bad Internet marketing.  For many years this has been Spam e-mails targeted at any one in the leather trade with a web site of any type. This has been unpleasant but easily managed along with sex enhancement and fabulous financial offers from Western Africa. But in the last year this has transferred into the area of Social Media – Facebook and LinkedIn.  One careless stroke of the keyboard and one’s news stream on Facebook suddenly because loaded with pictures and news that are just pure advertising.

What our friends in Sialkot, indeed throughout the sub-continent, must remember is that Social Media is private space in which consumers spend their leisure time. Marketers have to enter that space with very great care. This is the area where we talk about permission marketing.  Consumers opening up Facebook to see what their friends were doing at the weekend do not want to be bombarded with photos of shoes and gloves which are put there for commercial purposes. Just as annoying is when you get into a serious discussion on LinkedIn and up pops someone saying that all your problems will be solved if you buy gloves from Sialkot.  This is not good.

Message:
“Sialkot,  30th June 2010,                                         

Dear Gentleman,
We are Manufacturers & Exporters of all kind of Gloves, Motorbike gloves, Motocross gloves, Leather gloves, Ski gloves, Dress gloves, Cycling gloves, Sports gloves, Leather Chaps, Pent, Vest, Jackets and as well Tool bags.
We have well experience of manufacturing at our credit, we therefore can meet your requirements in a better way and in a perfect manner.
You are requested to direct your trade inquiries toward us for best price quotes.
With keen interest we are looking forward for your prompt and positive reply.

Best Regards,
Export Manager

Intrusive Sports
Pasrur Road,
Sialkot-51312, Pakistan
Ph: +92-52-12345678
Email: info@intrusivesports.com”

Mr Export Manager, this is not good at all. Being Sialkot and June 2010 being the month of the World Cup there is another message that we should send to you. Jabulani - which means "celebrate" in Zulu – is the name of the seamless machine made synthetic football made by Adidas.  What it has shown is that the move to synthetic machine made balls has gone too far. In the UK John Lewis sold a traditional 1970s leather football for £35.  It is perhaps for display but I bought one to play with and would have bought more had they been in stock. They bounce well, they are a joy to kick and dribble. The old issues of getting heavy in the wet and losing shape can be managed now. So if ever there was a moment for retro move back to hand sewn or partially hand sewn soccer balls now is the time.  Not everyone is going to play with them; even if the price is reduced as volumes and efficiency grow they will still be expensive. But they last and will be easily affordable for all top matches down to local leagues. And they are leather, naturally!

So instead of all this unpleasant intrusive promotion why does Sialkot not undertake a total rebranding based around 150 years of leather quality and craftsmanship and spearhead it by featuring global crafted leather soccer balls. Now that would be a campaign worth running. And because it is out of Pakistan with all its problems it would have to managed very cleverly, but with some bright ideas the apparent disadvantage of the origin could be turned to a huge advantage. Forget the spam, go for the real business and win friends on the way.

 

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12/05/10 - The Origins of things

I sat all yesterday through a series of presentations for industry University collaborative projects called KTPs. These are Knowledge Transfer Partnerships which are a very good way for business and Universities in the UK to collaborate. The companies contribute and the UK government then puts in quite a large amount and creates it normal bureaucracy around them.

My presence was because I am a trustee of the Leather Conversation Centre and we have a project running with the University of Northampton to find a new material to help conserve book bindings and leather upholstery suffering from red heat. This came about in the 19^th century as we started to use new types of vegetable tanning materials and more strong acids. Combined with things like SO2 from the air acid develops inside the leather and it starts to disintegrate. Most of us will have handled books from the period that have started to crumble in our hands. The material that used to be used to help slow this and protect the leather has been banned as unsafe to work with so we now have nothing.  So the project has Anne Lama who recently did her PhD at the British School of Leather Technology (now part of the Universities new Institute of Creative Leather Technologies) beavering away to find a new solution.

Typical of the British system the requirements are quite onerous. In addition to doing the research projects the researchers are expected to pass level 5 of the CMI management course. This is supposed to be degree level but is pretty obviously (to me anyway) some way behind. I have rather a similar view of the CIM courses too. And all the students have a grey haired and/or balding external adviser.  I always wonder about that as are these people folks that represent yesterday and were made redundant in a previous life or are they people with real knowledge and experience who perhaps took early retirement or wanted to relax a little and give something back. It is hard to tell.

What was clear that everyone in the room was spellbound about leather. Anne did a great presentation in her short allotted time but even beyond that there was already an enthusiasm which she was able to capture and carry along. And most of the audience were other young researchers. It is important to remind ourselves that consumers do like our product.

They were also fascinated by the history, by the origins of things. From the photo of Nelson's chair and her description of the work she did on it, to the making of leather wall hangings and there re-use as screens to the pieces of rotting book bindings she passed round everyone was involved.

This love of natural products, of the link to quality to luxury and to heritage is what makes leather so special. It simplicity and sustainability, properly made, is also a part of this. So knowing the origins and being sure of the claims being made about leather are very important elements for all marketers. We cannot allow greenwash. DEFRA are updating their guide at the moment - see http://www.defra.gov.uk/corporate/consult/green-claims/index.htm  Readers should also check out the "Six Sins of Greenwashing^TM" from TerraChoice, which is easily found on line.  We have all seen these claims about chrome-free (never quite defined) or "organic" which usually means a bit of quebracho or mimosa in amongst the calcium oxide, sodium sulphide, and metal pigments. Oh and "free of heavy metals" when even the best scientist knows that "heavy metal" is one of the most pointless descriptions ever.  All things designed to sound green by confusing the consumer. An abuse of trust and a great damage to the long term image of leather. So we have:

• - Sin of the Hidden Trade-Off
• - Sin of No Proof
• - Sin of Vagueness
• - Sin of Irrelevance
• - Sin of Lesser of Two Evils
• - Sin of Fibbing

To these they have no added the sin of false labelling. This latter is of interest in leather as our major brands worry about their commitment not to use hides from the Amazon Biome. How can we be sure about their origins? Some great work is being within the LWG on this and it looks like they have a formula that will deliver. But this emphasises the increasing importance of knowing the origins of things. For security, for environmental reasons and for heritage. Know where your leather comes from, know how it is truly made and help to make it last.

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22/12/09 - Pittards into Africa - at long last.

Tomorrow Pittards will complete their purchase of Ethiopian Tannery. I attended the EGM this morning which approved the share issue which had been previously placed at 1.5p per share with the directors and senior management. This raised the just over £2m needed for the down payment and some working capital. The whole deal signals that Pittards are out of "intensive care" and there is no real reason for them to slip back into losses in the foreseeable future. They are located in the best place in the world for their major raw material, which is one of the few not subject to huge swings in price, and able to make most of their production in the currency in which they buy and sell.

It seems curious that I can remember 20 years ago sitting in a lakeside hotel outside of Addis Ababa with a very great friend when we heard President Mengistu announce on the TV that he was stepping down, and it was actually May 1991 when he left the country to go into exile. That was the moment when we had all felt it was logical to enter Ethiopia and purchase on of the plants which it made no sense for the government to hold on to.  Guarantee raw material supplies, make in a dollar environment, avoid the high costs of sterling, do something to help loyal suppliers in Africa and make a point that African countries can add value and not just export commodities.  So we are twenty years on and there is no doubt that not making the move was part of the problem that lead to Pittards nearly going under after the best part of 200 years in existence. Yes, there were other issues, but growing smaller in a Sterling dominated manufacturing centre was never a strategy that made sense for any sort of company, least of all the one with the best recognised and respected business to business brand name in the leather industry. One with great and loyal customers hoping they would make the move to support them with better supply security and more stable prices.
But the clock cannot be turned back and here we are just ending 2009 and Pittards have done it at last, are still alive, and have every prospect for growth. Instead of Out of Africa it is Into Africa and with perfect timing as never before has the leather industry in Ethiopia looked more like growing into a viable and sustainable industry with footwear, clothing and leathergoods production. With a growing economy local demand will also grow. Kenya and Tanzania are looking at what Ethiopia are doing and are likely to follow. The Middle East is logistically close to Ethiopia and good new market to consider. No longer does everything made of leather have to go to the USA or the EU. This is a moment of change. Perhaps even the African nations will start to be willing to trade to each other and build new lines of communications. The Europeans built routes to the sea to export first slaves and then raw materials, It is a new infrastructure that is needed. If Ethiopia can use its growing wealth to build that infrastructure and at the same time develop a light industrial base out of leather with the large employment opportunities that come with making things out of leather then they will be building a real foundation for future prosperity.

And do not forget about Nigeria. All we hear about is violence, oil, corruption and Sharia law. But Nigeria has a strong leather raw material base and some good plants; it is perfect for capacity building and getting to leather footwear and clothing. And who is the British Ambassador? Bob Dewar, lately of Ethiopia and fully understanding of the potential good leather can do for a country.

Perhaps one day he can persuade the British DFID to understand and support the concept. It is all about Trade not Aid. A chap called Tony Blair wrote the book, but then did nothing to help implement it. So it is up to Pittards to do their bit, and in doing so it is surely a win:win situation for Pittards employees and shareholders and for Ethiopia.

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29/11/09 - A Twitter Cloud

How companies make use of Social Media matters. If you deal with a final consumer you should be active, but not just ploughing in without thought. Social media is a conversation not a broadcast media, and companies are tolerated on Social Media only if they understand how to participate.  Business to business activity is also relevant but again must be carefully planned or more harm will be done than good. 

I have done quite a bit of work helping business work out how to approach the extensive mix of Social Media. Not all companies see the relevance but all have reason to monitor the area and more than you imagine need to be involved. Below is what I have been putting on Twitter in the last few months in the form of a cloud:

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