A shift towards online business or supermarket chains or a result of depressed incomes? East of the M60 investigates.

The 1993 opening of Oldham’s branch of TJ Hughes was a Godsend for persons yearning for cheap clothes and footwear. It coincided nicely with the opening of the Spindles Shopping Centre and the refurbishment of its older sister. Oldham at the time was one of Greater Manchester’s most popular town centres. Set in the Town Square Shopping Centre’s former Presto store, it would later occupy a street level unit, formerly leased by Toy and Hobby.

Eighteen years on, the Oldham store remains part of the Town Square shopping centre, but the centre itself has lost a fair number of shops. Its younger neighbour has seen JJB Sports and The Disney Store quit Oldham. A few yards from TJ Hughes, HMV closed its doors, in spite of a tenure spanning nearly 30 years. TJ Hughes looks set to join HMV, leaving a huge gap in the town centre’s shopping facilities.

TJ Hughes is pretty much a Liverpudlian institution, along with its dearly departed rival Lewis’s. It too has had connections with Lewis’s, once being part owned by Owen Owen till the 1980s. In 1991, it took over the Lewis’s department store chain from Sears Group with TJ Hughes sold to its management. 1992 saw a share issue which led to their expansion. Most of its expansion took place in the North West of England, though further stores opened south of Altrincham with Coventry and Eastbourne sporting branches. By 2000, JJB Sports took over TJ Hughes, an arrangement which lasted till this year.

Most of TJ Hughes’ clientele would fall within the C2DE demographic; in other words, lower-middle class to working class households. People who are most likely to have been affected by static or falling incomes. People most likely to have been affected by rising fuel prices and VAT rates. Given the number of public sector job losses in the North of England, the Northern shopper’s reduced spending power will be further squeezed. Therefore, the downturn is not only affecting the likes of Habitat, but also discounters. This April saw Home Retail Group (owners of Argos and Homebase) report a 10% drop in profits. Recent unemployment figures saw a modest drop in the South East of England with rising figures in the West Midlands and the North of England.

18 years on from the Oldham store’s opening, TJ Hughes is no longer became the sole preserve of cheap clothing. TESCO and Sainsburys started getting in on the act. ASDA upped their game with its extension of the George label. Catering for the same market as TJ Hughes is Primark, whose cut price clothes became a national phenomenon. TJ Hughes lacked the deeper pockets of Associated British Foods and the main superstore chains.

Perhaps embracing the online shopping revolution may have favoured TJ Hughes. Since 2003, TJ Hughes has been owned by private equity groups, following its short lived acquisition by JJB Sports. From there on, it has been left behind by the likes of Primark and TK Maxx, and at a critical time when superstore chains were developing their online presence. In spite of this, it expanded with some recent acquisitions including former Woolworths units. Christmas 2005 saw the launch of an online shop, but was that too late?

Superstore Loyalty?

For many people, it seemed to be the done thing to drive into the local supermarket for all worldly goods. Instead of paying parking fees in town centre locations, a trip to ASDA, TESCO or Sainsburys meant free parking. Supermarket clothing labels became a suitable alternative to cheaper designer clothes. Therefore, in some households, the trip to the local shopping centre was superfluous.

At the other end of the scale, some savvier shoppers turned to the Pound shops and other discounters like B&M Bargains and Wilkinson. Both chains are big players in the North West’s marketplace and are often seen in the same locations as TJ Hughes. Therefore, the competition lay in cheap crockery as well as clothing.

Yet, TJ Hughes’ profits had risen over the most part of the last eight years. Continued expansion and steady footfall would have guaranteed some security. The stores already have a degree of customer loyalty, not least shoppers in its home city who will mourn the loss of another shopping institution.

Private Equity and Credit Issues

The main issue leading to its administration is regarding the loss of cover which protects suppliers in the event of collapse, and a change of private equity investor. Therefore, £30 million was needed by Autumn 2010. This wasn’t forthcoming as the private equity partners Endless made a loss of £10 million. Hence TJ Hughes being taken over by its administrators Ernst and Young (Manchester) this summer. The administrators aim to sell the business as a going concern.

Should TJ Hughes disappear from our shopping centres, it will become the second North West based store chain to disappear by means of credit issues. The other was Music Zone, where their bankers refused a financing deal, leading to them entering administration.

A Bigger Picture?

Despite the platitudes and cajoling of the banks by the coalition government, banks are still refusing to lend to small and medium businesses. Is the same happening to regional players like TJ Hughes, as has happened with Music Zone? Though TJ Hughes has expanded beyond the North West, is its progress by organic means being hampered by the City? Hence Morrisons’ expansion in the south by means of acquiring Safeway?

Perhaps there is more to this than the availability of cheap Wranglers, such as its demographic’s lost spending power. Or a shift towards the convenience of the internet (hence ASOS’s rise) and being able to find a new top besides the King Edwards, which is a bigger picture that goes beyond a main regional player?

Yet, it is in these difficult times where Britain needs the likes of TJ Hughes on its high streets. There are still some shoppers who are unable to use the internet or have any interest in the internet. People who would like to see a human face yet pay affordable prices in a less over-facing environment than an anonymous supermarket, out of town and away from bus routes.

A section of these people have free bus passes yet command huge sway over consumer spending. They, along with working class and lower middle class shoppers would miss the likes of TJ Hughes. Not least for its value for money but also its convenience.

S.V., 24 July 2011.

2 thoughts on “TJ Hughes: A Victim of Britain’s Two Speed Economy?

  1. Speaking as an Oldhamer, I thought the town centre was holding its own a little bit compared to other towns in regards to empty shop spaces due to closures. The main casulties in the town had been Woolworths and Dixons. But, in the last couple of years, the spaces have crept up.

    As mentioned, the old HMV, Poundland, DIsney Store and Sports Direct, plus JJB Sports is a big gap now. TJ Hughes would be signifcantly bigger. Then you have the old Sainsburys store in, which has been empty for something like 7 years now and the rundown Alexandra Retail Park, although this may see some regeneration in the future.

    I think the problem for TJ Hughes is that, as it has been said and like a few other stores have fallen by the wayside, it is being out-done by the Internet other stores, particularly the supermarkets, but also stores like Primark and Wilkinson. There isn’t much, if anything, that cannot be bought at a supermarket that is also on offer at TJ Hughes and some of the products might be of better quality at a Tesco or a Asda. I think the reason why HMV decided to close its Oldham store was that people were choosing the Sainsburys down on Union Street or the two Tesco’s nearby to buy their chart CD’s, DVD’s and games. Plus, when you can buy things cheaper on their website rather in store, then people will pick the web and wait a couple of days to save a little bit more money.

    Another problem for TJ’s is that there is no unique factor that they offer that nobody else does. Clothing, electricial, homeware, kitchenware, it can all be bought elsewhere in a number of places. TJ’s does have some good qualities too, like the perfumes, which are certainly better value for money than somewhere like Boots, which is useful for a reasonably price gift for a wife/girlfriend/mum (it’s the thought that counts after all).

    If TJ Hughes does go in Oldham, then it would be a prime location for somebody to snap up. It’s the biggest floor space in the town, there’s access from inside the shopping centre and from outside, with five bus stops outside or around the corner. I do think that one store is missing from Oldham, which is needed and certainly would be welcomed by Oldhamers and that is Wilkinson, as it offers a lot of stuff that Woolworths used to offer. I think the other big store that could move to Oldham (and it is one that has been talked about for years) is M&S. Another option would be for someone like Morrisons to try and grow their recently-started M Local range of stores (one’s just opened in Ilkley, another one lined up for Wilmslow), which is their answer to the Tesco Express/Metro and the Sainsbury’s Local. Although, I could see Tesco being the more likely contender, if a supermarket was to move in, giving them a even stronger stranglehold in the borough.

    Rochdale’s TJ Hughes is also in a good location, as you have to go through it to get into The Wheatsheaf Shopping Centre, if heading in from the car park or bus station, so there are probably vultures lurking around that store too, ready in time for when the Metrolink arrives in 2014, to grab visitors in. Someone like Home Bargains might pounce to take one of the floors (only Rochdale and Stockport in Greater Manchester where they don’t a Home Bargains or its sister company Quality Save in the town centre).

    As for the other TJ locations in Greater Manchester, Pendleton and Stretford might be harder to fill, as they’re smaller locations. Might be a case of somebody moving from a smaller location elsewhere in the shopping centre into TJ’s space, like Poundland and Sports Direct have done in Oldham with Woolies. Bolton’s could be tricky, as it’s on a retail park, near Sainsbury’s and next to TK Maxx and Argos, which would have been two options had they not already been there. Could be any number of stores that move in there. Could be something like a Asda Living store, simliar to the one at Manchester Fort or perhaps someone based at one the older retail parks in the town, who may decide to more into a better location.

    I think the situation with TJ Hughes will be like Woolies and no doubt other retailers: we’ll only miss it when it’s gone.

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    1. Hi Shaun,

      Detailed and thorough as ever, Oldham does have a fair number of empty spaces, but the number of which seems to be slowing down. In the precinct, a fair number is due to relocations elsewhere in the centre (the original Poundland store was way too small and the new one’s less claustrophobic). The centre seems to be shifting more towards Yorkshire Street, High Street, Union Street and Curzon Street. The first Sainsburys store is presently in a poor position, unlike the current one which is well within the town centre.

      Then of course the earlier retail parks (if you could call them that) seemed to be in most lackadaisical positions, spluttered on random edges of town. Compare with the current Elk Mill Retail Park, which has led to Alexander Retail Park floundering at the expense of the one off the A627(M).

      I agree with you on the reasons regarding HMV. Though the supermarkets lack the variety of HMV, Oldhamers have opted for the likes of Sainsburys and TESCO for more popular releases. Then there’s the internet for more specialised music. Likewise with the lure of TJ Hughes, given how other competitors have copied the formula and succeeded.

      The vacation of JJB Sports (or TJ Hughes) would offer potential for a future Wilkinson store, occupying either one or both floors – which I agree would go down well in Oldham. Perhaps it could stop a few from going to Ashton or Rochdale.

      You are right in saying that Rochdale lacks a Home Bargains/Quality Save. Stockport has a Home Bargains; it is actually in Edgeley and used to be a Kwik Save. Affluent Cheadle has a Quality Save.

      I think some may be holding on for Metrolink, in the hope that a similar Sparks Effect would reach Oldham and Rochdale, as has happened with Bury. Like Woolworths we would miss TJ Hughes, unless a buyer wishes to run in as a going concern (which I hope so).

      Bye for now,

      Stuart.

      Like

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