Associated Dairies Group - FTSE 2

I found Allied Breweries rather fun, but I find Associated Dairies, aka ASDA crashingly dull, probably because their history is much shorter and carried out mainly in the days of corporate finance and private equity deals. All a bit dispiriting to an old socialistic business person like me! I have a healthy respect for those who make widgets and sell them to people who want widgets. I have little respect for financiers, though of course they are the ones who make money (and remove money from the humble types who make or run enterprises which make the widgets.

History

The Asquith family (not those Asquiths) were grocers in Yorkshire which expanded in the 1920s to have 7 shops.  Meanwhile, a group of Yorkshire dairy farms joined under the name of J.W Hindell Dairy Farmers. In 1949 they diversified and became Associated Dairies and Farm Stores under the leadership of Arthur Stockdale. Anyone know a more Northern name than Arthur Stockdale?

1n 1963 the Asquith brothers refurbished the Queens cinema in Castleford into a self-service supermarket. Next they converted an indoor market, then built their first purpose-built store. In 1965 Asquith suggested they should provide butcher counters in the stores run by Stockdale. Then they decided on a merger, and called the new company called Asda, representing Asquith Dairies. They opened new stores in the North in the 1960a and  in 1969 Stockdale bought out the Asquiths.

They progressed by buying the American struggling outfit Government Exchange Mart with 4 stores across the North and Midlands via a clever deal involving tax losses which seems to have meant they got the company for nothing, with favourable leases. They increased the turnover tenfold within 6 months. They expanded further during the 1970s and by 1977 they were in the far South with stores at Plymouth and Gosport

In 1978 the acquired Allied Carpets, another fast growing company which had started in a Birmingham market in 1950. It expanded under AsDa and became a household name, and apparently a legend for poor service, with Victor Meldrew wanted his ashes scattered in Allied Carpets to record his dissatisfaction with their customer service. Perhaps that is why AsDa sold the caboodle to Carpetland, which had troubles of its own, in 1995. 

By 1982 AsDa had stores in London and in 1985 they changed their name radically to ASDA. By the 1980s it was in decline and made a couple of dubious changes – merging with MFI (remember them?)  and had their new headquarters opened by Margaret Thatcher (remember her?). At some point during this decline they stopped being one of the largest customers for Honeywell, which had been dunned by me in the early 1980s. Dumping Honeywell doesn't seem to have helped, nor theirpurchase of the Gateway large supermarkets in 1989 . They put their prices up but nor did this lead to financial success and they nearly went bust in 1991. 

They bought in Archie Norman, who started at McKinsey to be CEO. Norman was also Conservative MP for Tunbridge Wells  and he introduced good Thatcherite remedies – selling assets and sacking people. It has to be said that the regime was successful and ASDA became profitable again. Norman was elected in 1997 (not a good year for Tories). He became CEO of the Conservative party and no doubt put them on the road to success but this didn’t happen for over 10 years. Whatever, Archie was a clever boy.

He was trying to sell ASDA to Kingfisher (owner of B&Q and Screwfix amongst others) but he got a better offer from the USA company Walmart and ASDA was bought by them in 1999. In 2018 there was an aborted attempt to merge with Sainsbury’s. This caused the the CEO of San=insbury’s Mike Coupe getting caught with this fingers in the cookie jar (allegedly)

https://www.youtube.com/watch?v=qcw4jLs7aKA

What happened was that ASDA was sold to some one else – petrol station mogul brothers  from Blackburn called Mohsin and Zuber Issa and the private equity group TDR Capital. Mohsin apparently has sold his 22.5% stake so I suppose Zuber and TDR own most of it, but of course in the modern idiom most of the money was put up by lenders who charge a high interest rate of about 8%. I have considered buying ASDA on my credit card but they won't give me a couple of billion credit, which is very unfair.

They have also been doing deals throughout including buying and selling back the Leon chain.  I have no knowledge at all apart from what I have gleaned from public websites, but given that their recent loss of market share looks to have stabilised.

My money (if I had any and was a gambling man) would be expecting them to change hands again before long. Probably end up a division  of Amazon like everything else in the world.

Funny how logos change over the years. Did anyone notice? Apparently this is difficult to read especially for those with Dyslexia.