Focusing on leisure is risky for Rank
Friday 09 August 1996
Getting rid of the rump stake makes good sense both strategically and financially, but focusing on Rank's leisure and entertainment core makes the company considerably riskier. Not least because if you add in the pounds 300m proceeds of other planned disposals, the new chief executive, Andrew Teare, has a worryingly fat chequebook to go with his understandably sketchy knowledge of the leisure business.
If he spends that money wisely, Rank could return to the top table of the British leisure industry from which it has been notably absent for years. But no one should underestimate the challenge, given the uninspiring springboard the rest of the group provides.
Best of the bunch is probably film duplication, and if Hollywood continues to churn out films like Independence Day and Mission Impossible, Rank will have no problem shipping at least the current million or so videos a day. The digital revolution means the video tape's day is numbered however, and this is probably a case of making hay while the sun shines.
Elsewhere Rank is like a snapshot of 1960s Britain, with a stable of squandered, underinvested and tired brands. Odeon, Butlin's, Top Rank, Mecca - it's hardly the starting point of choice for a man setting out to rebuild a leisure giant.
Hard Rock appears to have become the focus of Rank's attentions. Again buying in franchise operations and working the brand hard with spin-offs such as branded music venues and a record label make sense, but this is a 25-year-old brand where like-for-like sales in the first half were actually lower than in 1995.
It would be churlish to judge Andrew Teare after just three months in the job. But the honeymoon period is certainly over, as the 6 per cent fall in his share price yesterday amply demonstrated. Leisure and going out are destined to remain very high growth areas of consumer spending but finding the formula that attracts the punters remains as hard as ever. Mr Teare might do better to return the Rank Xerox cash direct to shareholders than to embark on a reckless spending spree.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...