Maplin Electronics in administration

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Prime
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Re: Maplin Electronics in administration

Post by Prime » Thu Mar 08, 2018 9:45 am

1024MAK wrote: But the really sad thing is, that modem dial up ordering system was far quicker than the current "revamped" pile of garbage sad excuse for a web site :(
I'll agree with that, it's difficult on the current "flashy" site to find anything and the categories that you can filter on are also um somewhat lacking. Though this is not a problem unique to Maplin, they certainly seem to be worse than most.

But digressing a little, it's a symptom of modern trends in UI design where they seem to have let marketing / artistic people design the functionality of the user interface, so you get something that looks cool, but is less usable than something simpler, with better functionality.

Cheers.

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Andy1979
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Re: Maplin Electronics in administration

Post by Andy1979 » Thu Mar 08, 2018 11:56 am

crj wrote:Here's a look at what happened to Maplin from a very different angle. It seems they may have had problems with tangled finances as well as the ones visible to us as geeks.
An interesting read. I work as an accountant myself, although don't have massive experience of private equity / venture capital.

My understanding is that when companies change hands, the price is (obviously) based on someone's plan for what the business might achieve in the future. The value of everything currently in the books will be much lower than this, and the difference is what ends up as "goodwill" to balance the books. These acquisitions are normally bought with a big loan from somewhere, hence all the debt.

Most investors plan to sell their stake in the business after 3 to 5 years, which is where the incentive to over-expand can come from.

So it's all basically a bet that the business plan will come true - the same for any investment. If it doesn't, then the company can't repay its debts and it all falls down. It doesn't mean that the company wasn't making any profit, it just wasn't making enough to pay off the debt.

One can debate the morals, but I'm sure there are plenty of examples where it works well.

If Maplin's core business was making profit, then maybe someone can buy it (or some of it) from the administrator as a going concern. That would be a great outcome for Maplin.

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Re: Maplin Electronics in administration

Post by Commie_User » Thu Mar 08, 2018 12:55 pm

1024MAK wrote: All that nonsense with layers of companies is for only two reasons: reduce the tax payable and hold debt.
Our laws on such matters in this country are pathetic.
Ordinarily, competitive corporation tax attracts investment that would go elsewhere. There'll always be someone trying to be more creative in the book-keeping than is good for them anyway, so where do you go? I would argue that the higher rates of tax and regulation in years gone by broke up the Beatles and caused the brain drain.

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1024MAK
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Re: Maplin Electronics in administration

Post by 1024MAK » Thu Mar 08, 2018 3:07 pm

Commie_User wrote:
1024MAK wrote: All that nonsense with layers of companies is for only two reasons: reduce the tax payable and hold debt.
Our laws on such matters in this country are pathetic.
Ordinarily, competitive corporation tax attracts investment that would go elsewhere. There'll always be someone trying to be more creative in the book-keeping than is good for them anyway, so where do you go? I would argue that the higher rates of tax and regulation in years gone by broke up the Beatles and caused the brain drain.
Who said anything about higher rates of taxes? My view is that the laws should be simplified so that they are more "catch-all", and hence make legal avoidance harder to do.

But anyway, it's best not to drift any further off topic, as we don't really want to talk politics here.

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Re: Maplin Electronics in administration

Post by Commie_User » Thu Mar 08, 2018 4:05 pm

No probs, I catch your drift now anyway. :)

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Re: Maplin Electronics in administration

Post by crj » Thu Mar 08, 2018 4:29 pm

Andy1979 wrote:One can debate the morals, but I'm sure there are plenty of examples where it works well.
I'll try to make one quick point that isn't quite moral or political, then I'll shut up in case anybody has anything further to say on the technical side. (-8

Whenever a system is set up so you can gamble £1 for a 50-50 chance to either win £10 or lose £10, there's a strong incentive to make the gamble if (a) it's legal and (b) you can walk away with impunity if you go negative. The combination of high leverage and limited liability companies is basically just such a situation.

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Re: Maplin Electronics in administration

Post by jgharston » Thu Mar 08, 2018 8:00 pm

Prime wrote:But digressing a little, it's a symptom of modern trends in UI design where they seem to have let marketing / artistic people design the functionality of the user interface, so you get something that looks cool, but is less usable than something simpler, with better functionality.
Something similar has happened with Google Street View, after a few seconds of "walking" down a road it thrashes itself to a standstill and I have to use extreme prejudice to kill my browser.

Code: Select all

$ bbcbasic
PDP11 BBC BASIC IV Version 0.25
(C) Copyright J.G.Harston 1989,2005-2015
>_

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Re: Maplin Electronics in administration

Post by Coeus » Thu Mar 08, 2018 10:13 pm

crj wrote:Whenever a system is set up so you can gamble £1 for a 50-50 chance to either win £10 or lose £10, there's a strong incentive to make the gamble if (a) it's legal and (b) you can walk away with impunity if you go negative. The combination of high leverage and limited liability companies is basically just such a situation.
The original idea behind limited liability is that the money you put in a shareholder is the money being gambled. If someone accepts that bet you mention that, if lost, would leave the company with £10 of debt for each £1 of shareholder investment then the person accepting that bet is taking a risk and if the company folds and is unable to pay the £10 then the person accepting the debt should not complain.

I think the problem here is that we assume those who invest in a company by buying it's shares will use the control over the company thus provided to keep the company solvent and thus protect that investment. The problem comes when the very same people who hold those shares, and therefore have that control, find some other way of getting money out of the company that dwarfs what they paid for the shares such they are not worried about the company becoming insolvent and losing their initial investment.

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Re: Maplin Electronics in administration

Post by crj » Thu Mar 08, 2018 11:01 pm

Asset stripping is one problem, sure, but it's not the problem I was talking about.

Worked through in a little more detail: a company has £1. It does something with that £1 that will either (50%) make £10 or (50%) lose £10. If they make £10, the company now has £11 so the newpapers interview the founder to ask how they did it, everyone involved gets rich, etc. If a company loses £10 it now has -£9 pounds. But it has limited liability, so it declares bankruptcy. Yes, the owner loses their £1, but the wider economy loses £9 in bad debts.

If an entrepreneur does that over and over again, they'll make an average of £4.50 each time, even though they're not actually being successful.

If your only objective is to maximise profits (and many sources of funding are quite insistent that it should be!) then there's a strong incentive to indulge in that kind of risky business to the maximum extent permitted by law.

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Re: Maplin Electronics in administration

Post by Kecske Bak » Fri Mar 09, 2018 4:51 am

crj wrote:If your only objective is to maximise profits (and many sources of funding are quite insistent that it should be!) then there's a strong incentive to indulge in that kind of risky business to the maximum extent permitted by law.
On a similar note I was watching a very interesting video on why RadioShack failed the other day. I had assumed it was due to the eBay etc., so I was surprised at the reason... https://youtu.be/JFivtOmXPPM

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Re: Maplin Electronics in administration

Post by Coeus » Fri Mar 09, 2018 1:13 pm

Kecske Bak wrote:On a similar note I was watching a very interesting video on why RadioShack failed the other day. I had assumed it was due to the eBay etc., so I was surprised at the reason... https://youtu.be/JFivtOmXPPM
So why would the guy presenting that video look at this picture:
Screenshot from 2018-03-09 12-54-08.png
and say that the problem started when they started making a loss, i.e. as the graph crosses zero. Clearly something suddenly happened in 2010 and that was the beginning of a downward trend. Surely, whatever that was, it was the problem that needed to be addressed.

So it seems in both cases there are traditional business reasons for being in trouble as well as controlling interests that don't seem to be acting in the best interests of the business.

I wonder if it is a bit like the goose that lays golden eggs. Imagine someone owns such a goose but it seems to be ailing and isn't laying so many golden eggs so he puts it up for sale. People look at the goose and one buyer concludes that it probably has a terminal illness but has a plan and buys it. Once he has the goose he pumps it full or hormones to get the eggs out faster knowing full well that this will hasten the demise of the goose but he expects to make more from those eggs than the price of the goose and that's good enough for him.

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Re: Maplin Electronics in administration

Post by Diminished » Fri Mar 09, 2018 2:14 pm

Coeus wrote:I wonder if it is a bit like the goose that lays golden eggs. Imagine someone owns such a goose but it seems to be ailing and isn't laying so many golden eggs so he puts it up for sale. People look at the goose and one buyer concludes that it probably has a terminal illness but has a plan and buys it. Once he has the goose he pumps it full or hormones to get the eggs out faster knowing full well that this will hasten the demise of the goose but he expects to make more from those eggs than the price of the goose and that's good enough for him.
Some of it may be based on the value of the brand name. Even if a company is obviously beyond redemption, a brand name still owns mindshare within the populace and that may be worth something.

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Re: Maplin Electronics in administration

Post by crj » Fri Mar 09, 2018 4:55 pm

Coeus wrote:Once he has the goose he pumps it full or hormones to get the eggs out faster knowing full well that this will hasten the demise of the goose but he expects to make more from those eggs than the price of the goose and that's good enough for him.
Worse. They borrow as much money as they can against the value of future egg production and use that money to buy more geese. Now the business is bankrupt unless the original goose goes on laying and the new ones they've bought also turn out to be the kind that lay golden eggs.

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Re: Maplin Electronics in administration

Post by Kecske Bak » Fri Mar 09, 2018 5:16 pm

Coeus wrote:Clearly something suddenly happened in 2010 and that was the beginning of a downward trend. Surely, whatever that was, it was the problem that needed to be addressed.
Yes you're right and, to be fair, he did allude to it - mobile phone companies setting up their own stores to sell phones, which were a huge part of RadioShack's business then. That made the business vulnerable to the leveraged buyout that eventually killed it.

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Re: Maplin Electronics in administration

Post by Commie_User » Sat Mar 10, 2018 12:56 am

What's going to happen to any pensions taken out by the workers, I wonder. I think Maplin had a pension scheme.

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Re: Maplin Electronics in administration

Post by topcat96 » Sat Mar 10, 2018 9:44 am

Commie_User wrote:What's going to happen to any pensions taken out by the workers, I wonder. I think Maplin had a pension scheme.
The creditors will always get paid first, the staff will just get the table crumbs if there's anything left. The company pension scheme will be automatically frozen by the administrators with no payments or contributions being allowed.
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BigEd
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Re: Maplin Electronics in administration

Post by BigEd » Sat Mar 10, 2018 9:52 am

I found this (warning, lots of depressing news within):
Members of the company’s pension schemes need not panic. When schemes collapse they fall into the hands of the PPF, who have the responsibility for paying workers’ pensions. Those who already reached the scheme’s normal pension age will receive 100% of their pension. For those who haven’t reached the normal pension age, the PPF will pay 90% of what their pension is worth, up to a cap. This cap is currently just over £38,500 per year for someone retiring at 65, so it only affects the highest earners.

Members of the scheme can still take early retirement and a tax-free cash lump sum. In fact, the way PPF calculates these can sometimes be more generous than a typical scheme.

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Re: Maplin Electronics in administration

Post by sirbod » Sun Mar 11, 2018 9:59 am

I remember when Maplin was just one store at Southend, we used to go there most weekends to buy electronics in the 80's. They were very knowledgable and carried every component we ever needed.

I've been to two local Maplin stores (Chelmsford and Colchester) several times over the past few years and they've either not had the components I'm after, or don't know what I'm talking about. Staff used to be very knowledgable, not so much now and they carry a very limited stock of components.

Suffice to say, I haven't used Maplin to purchase components for years, using RS or CPC instead.

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Re: Maplin Electronics in administration

Post by Prime » Sun Mar 11, 2018 2:50 pm

Well just been to Coventry maplin and spent nearly £100 :) Closing down sale discounts of up to 50%......

Still be a shame to see them go.

Cheers.

Phill.

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Re: Maplin Electronics in administration

Post by Andy1979 » Mon Mar 12, 2018 9:23 am

Prime wrote:Well just been to Coventry maplin and spent nearly £100 :) Closing down sale discounts of up to 50%......

Phill.
Just picked up an Amprobe multimeter from my local branch, which I'd had my eye on for a while as my 25yr old Maplin 'white gold' meter isn't so accurate or reliable these days.

All test equipment is 30% off, though I could still have bought it slightly cheaper through Amazon, which I guess is part of the problem (from a seller I've not used before though).

Apparently the stores will be kept open for 2-3 months or 'until the stock is sold', unless a buyer comes forward in the meantime.

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Re: Maplin Electronics in administration

Post by crj » Mon Mar 12, 2018 9:52 am

Andy1979 wrote:All test equipment is 30% off, though I could still have bought it slightly cheaper through Amazon, which I guess is part of the problem
That's reminding me of when Focus DIY closed down a few years back. It wasn't until they'd reached 70% off that I picked up a few useful bits and pieces like spare rolls of mains flex. The final day before they closed, everything was 90% off and the store was still far from empty, which might have given them some clue as to why the business wasn't viable!

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Re: Maplin Electronics in administration

Post by vanpeebles » Mon Mar 12, 2018 10:59 am

Prime wrote:Well just been to Coventry maplin and spent nearly £100 :) Closing down sale discounts of up to 50%......
Did you buy two HDMI leads? :lol:

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Re: Maplin Electronics in administration

Post by Prime » Mon Mar 12, 2018 11:57 am

vanpeebles wrote:
Prime wrote:Well just been to Coventry maplin and spent nearly £100 :) Closing down sale discounts of up to 50%......
Did you buy two HDMI leads? :lol:
No :) Though to be fair to Maplin they're not the only ones who charge over the odds for stuff like that e.g. PC World etc.

What I did get :
Arduino ethernet shield,
Resistor, disc cap, electrolytic cap packs.
Couple of USB A->Micro cables.
Bunch of batteries.
Bunch of solar lights for garden,
Couple of LED torches for the cars.

Cheers.

Phill.

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Re: Maplin Electronics in administration

Post by Coeus » Mon Mar 12, 2018 12:03 pm

crj wrote:That's reminding me of when Focus DIY closed down a few years back. It wasn't until they'd reached 70% off that I picked up a few useful bits and pieces like spare rolls of mains flex. The final day before they closed, everything was 90% off and the store was still far from empty, which might have given them some clue as to why the business wasn't viable!
The thing about sales is that you have to have the money in hand, even if the items are cheap, you have to have somewhere to store what you've bought and you have to have a plan for it otherwise you have simply paid for something to be in your way without it providing any benefit.

People might stock up on generally useful small items and a few customers may have been thinking that their kitchen or bathroom furtinture are looking a bit tatty so replacements going cheap would be a good idea but even then they'd have to be intending to DIY and not rely on the company in administration to do the installation. For medium-sized items I bet most people would still wait until they actually needed them before buying.

Perhaps the selection of products at Focus did not match what people wanted to buy but I am not sure the failure of their closing down sale proves it. It is also the case that choosing what to sell by volume or total profit alone can have its drawbacks as, if you get a reputation for having a narrow range of products such that people risk having to do somewhere else too, they are less likely to go to the shop in the first place.

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Re: Maplin Electronics in administration

Post by crj » Mon Mar 12, 2018 2:13 pm

Prime wrote:No :) Though to be fair to Maplin they're not the only ones who charge over the odds for stuff like that e.g. PC World etc.
PC World's business model appears to be selling to uninformed consumers, though.

Also, competing heavily on price for things like laptops and phones then upselling overpriced accessories like network cables and chargers.

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Re: Maplin Electronics in administration

Post by crj » Mon Mar 12, 2018 2:21 pm

Coeus wrote:The thing about sales is that you have to have the money in hand, even if the items are cheap, you have to have somewhere to store what you've bought and you have to have a plan for it otherwise you have simply paid for something to be in your way without it providing any benefit.
Well yes. But a related isue is that DIYers seem to understand that their own time is money. They'd rather buy Dulux magnolia matt emulsion than a Focus own brand now-with-3%-less-rancid-Dairylea 10litre value tub of magnolia matt emulsion. Putting the stuff on walls is going to take time so they're willing to pay a little money for something that will apply easily, look good and last a long time. Using paint that takes them twice as long to apply, make their house look like crap or means they have to redecorate twice as soon doesn't appeal. Sensible people might not use it if it was free.

Simlarly, now I think about it, I would plead with people not to buy Maplin's dodgy USB-charger mains sockets, even if Maplin eventually gives them away.

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Re: Maplin Electronics in administration

Post by 1024MAK » Mon Mar 12, 2018 11:13 pm

To be fair, some plug-in SMPSU from Maplin that I have bought in the past have been good quality. Mind, they were not the super cheap type.

I have never bought a USB PSU from Maplin.

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Re: Maplin Electronics in administration

Post by 1024MAK » Mon Mar 12, 2018 11:34 pm

As to Focus, where I live, this was (at the time) the best DIY store for the items that I was interested in. It was cheaper than Homebase (who had the highest prices and were more interested in selling homeware stuff than DIY stuff), and cheaper than B&Q.

At one time, we had three DIY stores within 3 minutes walk of one another (B&Q, Great Mills which became Focus, and Texas Homecare). I shopped in Texas and Great Mills. Only buying items in B&Q if I could not get what I wanted in the other two stores.

After Focus got into trouble, Homebase took over the store. But it did not last long before Homebase closed it (they had another store, their main store, less than 3 miles away).

B&Q since then have moved to a bigger store. And the main Homebase store is now Bunnings.

But near to the old Focus store, we now have a Wickes store.

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Re: Maplin Electronics in administration

Post by crj » Wed Mar 14, 2018 7:12 pm

Prime wrote:Well just been to Coventry maplin and spent nearly £100 :) Closing down sale discounts of up to 50%
I visited the Cambridge Beehive Centre branch at about 5:30pm today. Five members of staff, and I was the only customer.

I couldn't see anything at 50% off, and not much even at 30%. Anything potentially interesting was only 20% or 10%, and even then I was startled by the extent to which they're now selling nondescript brands, rather than anyone reputable. There was a kitchen bug killer reduced to a sensible price, for example, but there's no way I'm going to buy something with exposed metal and a voltage step-up from a company I've never heard of!

Most stuff was still way more expensive than online.

I ended up not buying anything, which is a bit sad. Maybe I'll drop by in a few weeks' time when the discounts are steeper.

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Re: Maplin Electronics in administration

Post by 1024MAK » Wed Mar 14, 2018 10:06 pm

I went in one of the Bristol branches this week and bought some items. It appears the signage in the stores is not very good. I checked some prices on the web site. Example, an MB7 project box. On the web site it was shown as £4.65. In store it was £9 something. But IIRC the sale sign showed only a 20% discount. But I was only charged £4.65. Other stuff was actually 20% or 30% off.

And yes, the number of staff outnumbered the number of customers while I was in the store.

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