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19th September 2017
 
Title: The Winning Counter: Hugh Fraser & Harrods
Author: Pottinger, George
Price: £18.00
Publisher: Hutchinson
Date Published: 1971
Specifications: HC, 192pp., 6" x 9", 450g.
ISBN: 0091062209
Condition: Very good in dust jacket
Copies in stock: 3
Category: Retailing More books in this category
Company: Harrods More books about this company
Book type: Biography in Business
Hindsight ID: 202
The Winning Counter: Hugh Fraser & Harrods

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Notes: This short but solid and worthy biography admirably reflects its subject. Hugh Fraser, who, following his father and grandfather, always called himself a warehouseman, was a reticent, meticulous and cautious man, who unusually combined these virtues with a commercial boldness that made him one of the leading take-over and merger businessmen of his day. His caution is seen in his attitude to the roof-garden on top of Derry & Toms: while recommending it as a place to enjoy tea, and recognizing that it made money, nevertheless “[h]e was very ready to recognize that his financier’s brain could never have conceived anything so violently exotic”.
He was amongst the last of the generation of individualists, those who preferred to do things for themselves. Indeed, it was said of him that had he the time, he would have operated the lift at his headquarters building!
The book is informative on his “leapfrogging” technique of capitalisation for expansion. He would sell a building on an agreement that gave him a lease for a long term and then use the capital raised to purchase further property, the value of which in due course would be realized in the same way. The 1950s were a good time to initiate this, as the book value of many businesses was under-rated for various reasons consequent upon the war, which meant that property was relatively cheap to purchase. Fiscal policy in the post-war period was to tax distributed profits very highly, thereby inevitably creating the incentive to retain such profits or plough them back. And in general, after the war effort there was a lack of dynamism in the economy. All this led to site values being undervalued, giving Fraser his opportunity.
He drew on the experience of the family firm at the height of the depression, which had a made a reputation for thrifty housekeeping by financing acquisitions from its own resources. This cautious but at the same time bold approach to finance meant that Hugh Fraser was able to establish a reputation as a formidable businessman, someone whom the City rapidly came to take seriously.
There are snapshot histories of the various companies that Fraser bid for whether successfully or not. The first major acquisition was the purchase of Barker’s (which included Derry and Toms, of the roof garden). This alarmed his friends because they feared it would substantially reduce the company’s dividend cover, but it was a shrewd move because it doubled the House of Fraser’s net assets to £10m. The financial press concluded that he wouldn’t rest on his laurels now he had acquired his long-sought foothold in London. The City foresaw House of Fraser’s growth into one of the largest retailing organizations in the country.
The unflappable way in which he had added Barker’s to the chain confirmed in the public mind that Hugh Fraser was something of a card. He had gone about the acquisition by careful grooming of his personal acquaintance with the company chairman and a cautious approach to the shareholders, while holding his own against the financial press, experience that was to stand him in good stead when he came to buy Harrod’s.
His biographer, a family friend, says of him that he was capable of “cutting a dash when he felt like it” which suggests that this too was a ploy. While he lived well – a suite at the Savoy, his holidays and gambling on the Riviera, his hobby of cultivating orchids, his Rolls (which the manufacturers persuaded him to lend to Prince Rainier for his wedding) – he was no dissolute high lifer: there seems to have been an element of calculation in everything he did, which would go a long way to accounting for his success.
Barker’s staff saw no reason to regret the takeover, though there was a brisker air about the premises. One of the new chairman’s first acts was to add an extra week to the staff winter holidays. Fraser was indignant at the suggestion that he was someone who just bought up properties: “A large department store is not just bricks and mortar and haberdashery. It is a living entity comprising all the staff who work in it. It is my intention to see that they prosper as I do.”
Harrod’s was the supreme prize in the department store world, and one perhaps uniquely suited to the sober work ethic that the canny Scotsman brought with him. Many things went to making it a prize: the royal patronage; the aristocratic clients; the building itself, with its landmark dome; the décor which gave it a subdued air of permanence; the relaxed attitude of the staff; the air of security that the latter breathed – indeed, the hard sell was always actively discouraged by the management; the measured dignity, exemplified by the incredible amount of floor space given to the stocking of grand pianos; and finally the imperturbable reputation for being able to sell anything no matter how outlandish, from ornate hat pins to live elephants. “Get it at Harrods” really did mean what it implied!
There were no large institutional holdings in Harrod’s, which meant that greater caution was needed in wooing the shareholders. The make-up of the bid had to be designed to appeal to the individual small shareholder more so than was usually the case, which therefore meant that a substantial cash element was included. The acquisition was made with tensions, criticism from the financial press duly and drily met, but without any undue excitement or drama – as befitted the store, and to the eventual satisfaction of all concerned.
Hugh Fraser was eventually created a Baronet for his services to commerce and to his native Scotland. In later life he was a conscientious and effective chairman of the Scottish Tourist Board. A worthy career, duly honoured, and a commercial legacy that continued the old family business of the Glasgow “warehousemen”.

Keys: Harrods, Fayed, Knightsbridge, Figures in Business



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