View from City Road: Buying time with writs

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The Independent Online
The very name, Reject Shop, should have given the hapless Jeffrey Gould some indication of what he was buying. The company duly proved as dud as the products it sells. By way of excuse, Upton now claims it was a victim of deceit but many would say it should never have bought the company in the first place. The manner and method of the acquisition bears all the hallmarks of someone in such a hurry that he is almost bound to trip up. Mr Gould was brought into Upton & Southern by James Hodkinson, former director of Kingfisher, with a great fanfare in December 1992. After the customary rationalisation and debt restructuring, he ambitiously signalled, very loudly, his desire to buy another retailer and his share price moved northwards in anticipation.

With the clock ticking on his inflated share value, Mr Gould was under pressure to deliver. So he bought The Reject Shop, paying pounds 2.3m for a company that it now transpires is pounds 2.5m short on stock. The writs may buy enough time for Mr Gould to get his rescue rights away, but it is going to be a long wait for any recompense, even assuming he wins. Directors of Eurocopy, who are suing Sketchley for pounds 9m over the acquisition of Equipu in 1989, are still waiting for an outcome. Fools rush in . . .

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