Trying to prove the 'knockers' wrong

THE MONDAY INTERVIEW; Stephen Hinchliffe
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The Independent Online
Drive south west out of Sheffield and after a mile or two you are into the city's more affluent suburbs, where the roads are wider and the houses grander. Fulwood Road is here, a street once known as "Millionaires Row" because so many of Sheffield's cutlery kings built their homes there. Nearby Ecclesall Road has a few stately piles of its own. One of them is Parkhead Hall, a pounds 1m former iron baron's house that is the corporate home of Stephen Hinchliffe.

Mr Hinchliffe, 45, is a local entrepreneur who after spells in department stores and engineering has returned to the high street to build another fortune. Or so he hopes. His plan, which has retail experts mystified, is to develop a retail group from brand names that have known happier times.

In a year-long burst of almost unseemly acquisition activity, he has bought Sock Shop, the Salisbury luggage chain, Oakland menswear, Contessa lingerie, Torq the jewellers and the Red or Dead design group. Under his new group name, Facia, more purchases are planned. He may float the business. He may not. But either way, critics cannot understand what he is up to.

"I don't see why people should look at it this way," he says in a broad Sheffield accent. "It all does come together. What we are looking to have is a strength within the accessories market. We are also developing a fashion side. We are looking to expand Oakland and into womenswear. What we will have is a group of related businesses with a shared central overhead."

He already has 530 shops, 4,000 staff and sales of more than pounds 200m. But he declines to say how much he has paid for the businesses or how the purchases have been funded. "From our own resources," is his stock answer.

However, it is known that Mr Hinchliffe paid Signet pounds 3.2m for Salisbury's and that the business lost pounds 4.7m in the six months before he bought it and pounds 5m in the year before that. Sock Shop made a pounds 1m loss in 1992-93 and Oakland lost pounds 3.7m on sales of pounds 15m in the same year. Torq has a chequered trading history and was bought from receivership. The list hardly inspires confidence.

The other criticism that rankles is the "Flash Harry" tag some have attached to him. This stems partly from his hobbies which include a fondness for helicopters, grand corporate offices and cars. His Jade Mercedes with the number plate SH1 is parked outside Parkhead Hall, and he has a collection of 70 1950s classic cars including Rolls Royces, Ferraris, Aston Martins and Jensens. "What's money for?" he asks.

He is also keen to purchase that other trapping of the provincial Mr Big, the local football team. He has a15 per cent stake in Sheffield United and would like more.

Inside Parkhead Hall, Mr Hinchliffe works in a large bow windowed office overlooking manicured lawns. Well over 6 feet tall, he has the build of a Wimbledon FC centre forward (he plays football twice a week) and enormous hands. His wrist sports a chunky gold watch and he smokes a lot of Dunhills.

He is also sensitive about photographs, refusing to have his picture taken outside his baronial pad lest the accusations of corporate excess re-emerge. But what really aggravates Mr Hinchliffe is that people don't seem to take him seriously. "I take my business very seriously. I have hired some top people and they would have checked me out. They wouldn't have come lightly."

Recent recruits include Gary O'Brien, former finance director of Signet who has joined as chief operating officer, and Trevor Bell, the former marketing director of Harrods. He points to the changes he is making at Facia. At Salisbury, the stores will be re-designed with a new logo and new shop layout. The merchandise is being upgraded. At Sock Shop the merchandise is also being revamped and the hosiery, which accounts for 45 per cent of the group's sales, is being re-packaged. "We want to re-introduce the 'wow factor' in the shops", Mr Hinchliffe says.

The Torq stores had a firesale to clear unwanted stock when Facia bought it. The new selections are more sophisticated with prices ranging from a pair of ear-rings for pounds 2.99 to watches at more than pounds 100.

Oakland, the menswear chain picked up from C&A, will be taken more upmarket. An electronic point of sale system.will be introduced at the lingerie chain Contessa.

In the Autumn, Facia will move to a new head office in the old Laura Ashley design centre in Fulham, west London. A single distribution centre is being established at Milton Keynes.

Mr Hinchliffe says he likes the pace and detail of retailing. "Retailing has so many aspects to it. It has property, marketing, design, fashion. And any decision you take has an instant impact. In engineering it might take months to show through." He is also convinced he is moving in to the high street at the right time.

"If you buy at the bottom of the cycle you can do very well. I don't think things are going to get very much worse but I don't know how long it will be before they get very much better."

He says he may float Facia on the stock market but only if he needs the funds to finance a larger deal. It upsets him that some in the City say they would not represent him in a stock market listing because they do not understand his strategy. "That's interesting. Who said that?"

Making a success of Facia would mean a great deal to Mr Hinchliffe who wants prove his critics wrong. Born and bred in Sheffield, he worked as an accountant in an engineering company and a hospital board before leaving for spells in the grocery trade and computer systems. After some property dealings his first big success was in retailing.

In 1984 he led the management buy-in of the Wades department stores. In two years he turned it from loss to profit before selling to the Waring and Gillow chain for pounds 20m.

His next step was James Wilkes, an engineering company where Mr Hinchliffe bought a sizeable stake and ended up as chairman. In five years profits boomed as the company became the world's largest beer mat manufacturer. James Wilkes had built up a large range of disparate businesses including the Leeds based air charter business Knightway Air. It was here that Mr Hinchliffe acquired his first baronial corporate home, Beauchief Hall, which is just a couple of miles down the road from Parkhead Hall.

His time at James Wilkes ended in controversy after he was formally arrested as part of a fraud investigation at a seperate company.

The whole episode angers him. "I was never charged," he says. His point is that the investigation concerned someone else and that the authorities merely wanted some papers relating to a property transaction some time before. He feels the episode was uneccessary. "We sued the company involved and I won my case."

As a takeover battle for Wilkes intensified, Mr Hinchliffe stepped down as chairman in 1992. However, there were critics who asked why the company had an aircraft business and a head office with peacocks on the lawn and deer in the grounds.

"Okay. The peacocks cost pounds 2 each and there were two of them. The deer used to replenish themselves. I bought Beauchief Hall for pounds 725,000 and sold it for pounds 1.75m three years later."

He defends the airline business, saying it used to make money. "People don't criticise Hanson for owning different businesses. He has an airline. The knockers seem very selective."

He thinks there might be some people that are out to get him. "I think jealousy plays a part. Sheffield is a small business community and anyone who is active is noticeable. Not everyone admires success. "

Mr Hinchliffe regards Facia as his chance to prove "the knockers'' wrong: "Look at Wades, that was serious turnaround situation. And Wilkes. I didn't build a bad business there did I? Never mind all this high-flying, high- spending stuff. It's not taking me seriously for my achievements."