Crain's Manchester Business Review reports that Redrow is buying Harrow Estates, a company which was a major landowner in Cadishead.
Keeping track of who owns what is a tricky business when it comes to landownership. Owners are often absent from the local area, they hide behind a veil of holding companies, and exchange land like you or I might exchange currency when going on holiday. Some landowners, however, can be quite stubborn, holding onto sites for years in anticipation of selling the plot for greater value - 'hope value' as they say. Property developers may also take decades piecing together tiny parcels of land to assemble bigger plots before they decide to redevelop.
In Cadishead, the piece of land in question has changed hands frequently over the last 5 years - indicating how major investment companies may treat land as a commodity, as opposed say to piece of landscape invested with meaning and identity.
The site is located in Cadishead, forming part of the Northbank Industrial Estate, accessed by Hayes Road. There once was a tar distillery on the site, and as far as I can work out the site was once occupied by Clariant, who off-loaded the site to Bridgemere Properties, a Cheshire property investment company, in 2004. At some point the site passed into the hands of Harrow Estates who this month sold the site to Redrow Homes.
Clariant is a global chemical giant based in Switzerland. Although only formed in 1995, the company has a much longer history as Sandoz, originally a German textiles dyeing company dating back to 1863. Since 1995 Clariant have expanded through a series of acquisitions. They used the Cadishead site to store hydrocarbon chemicals, leading to a contamination threat to the local water system. Efforts to clean up the site were compromised by the construction of the Irlam and Cadishead by-pass, leading to Salford City Council having to compensate new owners Bridgemere (£225k) because the road construction compromised the existing remediation of the site.
Harrow are a major property development company, in some way connected to Bridgemere, but their website gives little away. Once the Environment Agency had passed the site as clean, the land was sold to Redrow, one of Britain's biggest house builders, a Welsh company formed in 1974.
I guess this final move pretty much reflects what has happened more generally in the British economy. A site once used to store oil and tar for industry is now derelict and was once contaminated. At great cost it has been cleaned and brought back into effective use - the very essence of urban regeneration. Now the site is primed for residential use, allocated for several hundred new properties as part of the Salford Unitary Development Plan.
However, with the credit crunch it is now longer clear what will happen. The site remains derelict - a muddied barrier between Cadishead Park and the waterfront of the Ship Canal.
Sources:
Redrow buys owner of key East Manchester site -
Crain's Manchester Business: "Clariant"
Headlines
Monday, 23 November 2009
Saturday, 21 November 2009
2,000 jobs go as more First Quench stores shut
Now you can't even drink yourself out of the recession
Threshers is quickly disappearing from the British suburban landscape with the closure of another 381 stores.
First Quench are one those elusive companies, which sit in the background quietly managing popular high street names - in this case Threshers, Wine Rack, Haddows and The Local. The first us ordinary folk hear about them is when the go bust or do something amazingly crass, like sell mortgages to people who can't afford to repay them thus sparking a global financial meltdown.
In the distant past, First Quench was owned by a very familiar and comforting name - Whitbread. Whitbread conjures up images of frothy beer in the 1970s and beer skittles with Fred Trueman. The subsequent history of the company, however, is one global corporate machinations. The tale is a familiar one in terms of the development of corporate capital, even though the mantra from the main political parties these days is the private knows best and that the market will resolve all life's problems. The reality is somewhat different, but a well-rehearsed story of merger, take-over, restructuring and job losses.
Without laying it on thick, it was Marx who first observed the tendency in capitalism for businesses to merge and increase their size. Their objective, he argued, is not to be competitive, rather it is to produce the opposite conditions - to monopolise the market and kill off competitors. Hopefully you can see that this runs counter to popular opinion that unregulated free-markets promote competitiveness and innovation.
Merger and intrigue
The short life of First Quench Retailing can be traced back to 1998, with the merger between Whitbread's Threshers chain and Allied Domecq (Victoria Wine to me and you. This brought together 1470 retail outlets - including Thresher Wine Shop, Drinks Cabin, Wine Rack, Huttons, Victoria Wine Cellars, Haddows, Martha's Vineyard, and The Firkin - under one umbrella company.
The clear aim of this strategy is similar to that of Starbucks. It is called 'crowding-out' - replacing every booze/coffee provider in a neighbourhood with a sole supplier, until there is simply no room left for local or independent retailers to operate. In this way a single company can establish control over a network of local monopolies. Such retailers will argue they have to do this in order to compete more effectively with even bigger companies, such as Tesco, who can use their shear size to buy supplies in bulk and drive down the unit cost of products in order to undercut competitors on price. Consumers may get cheaper booze, but they end up buying it from a limited range of suppliers.
Corporate Irresponsibility
But isn't just a story of neighbourhood change. What happens on the high street is explicitly connected to a system of global operations and decision-making.
Business mergers are no longer confined to regions or individual states, they occur on a global scale, facilitated through a menageries of equity or holding companies which comprise the international financial system. And so, there are much bigger companies out there, who are not just interested in controlling individual neighbourhoods, rather their goal is to monopolise whole continents. Consequently the story of First Quench enters the murky world of the City and the international financial system.
Just one year after the initial merger, Allied Domecq sold their 50% share to the notorious pub-co Punch Taverns. In 1991 Whitbread purchased the Peter Dominic Group from Grand Metropolitan for £50m, bringing the Bottoms Up brand into the group. Grand Metropolitan manages a portfolio of luxury brands and companies - diamonds, jewellery, liquor, tobacco, fashion, golf and nightlife across the world. They are like the Alan Whicker of portfolio managers - so understandingly Thresher didn't quite fit this image of exclusivity. Interestingly although Grand Metropolitan are based in California, the company claims to the lineage of The Group dates back to aristocracy of Brittany, France in the Middle Ages!
The Peter Dominic Group, now a separate retail division, disappeared from history, purschased by a Japanese private equity group - Nomura Holdings in 2000 for £225m (Nomura recently bought the failed Lehman Brothers bank).
First Quench, however, was then purchased by the London based Terra Firma Capital Partners in 2002. Threshers then expanded further - purchasing 370 outlets from the failed company Unwins. 170 shops closed and the rest were rebranded into three market niches - 'The Local', 'Thresher' or 'Wine Rack'.
This expanded group then became attractive prey to other equity companies - and so the whole group was sold to Vision Capital in 2007 for £250 million. Notice how after each transaction a zero seems to be added to the value - making some people very rich indeed.
Threshers Group then became First Quench Retailing, with it head office in Welwyn Garden City. But just two years later the new owners put First Quench into administration, closing over 700 stores with some 4000 people losing their jobs.
Vision Capital are one of those companies who don't actually seem to make or do anything. Rather, they manage portfolios, including the aforementioned Terra Firma, Northern Foods, Bridgepoint, AEA Technology, Legal & General, Credit Suisse and Deutsche Bank.
Vision Capital's intention is to buy up 'mature' companies and 'Build stronger companies and create competitive returns for our investors'. They do this by:
- developing a clear strategy for each business
- building and re-energising management teams
- ensuring that operating plans are executed
- reducing and managing risk
- injecting investment capital to support each company’s strategy and optimise its balance sheet
- making follow-on acquisitions and disposals.
In others words they are interested in asset stripping and restructuring. Vision have absolutely no interest in your local outdoor and providing you with a cheap four-pack for Dave's party. Their priority is the capital value of the whole business, and more importantly the property assets they now own.
At times of crisis this is what capitalism does. It transfers capital from businesses which make things and provide services, and transfers that investment into less risky investments, such as property. You might be thinking the property market is depressed and this strategy makes no sense, but these companies operate on a different scale in terms of space and time, thinking globally and anticipating future trends. They are quite happy to sit on property and land assets for decades before realising a return, with additional zeros always added to the value. The human costs of this though are huge, with your local local high street going into decline and people losing their livelihoods.
The people who run these global investment groups simply don't share the same moral perspective of ordinary folk. They are remote from the impact of the decision they make. Their primary concern is making as much money as possible for their investment backers. The rules of the market simply don't apply. Supply and demand as we might know it, is undermined by the actions of these huge corporate entities who pay no heed at all as to whether people in a particular community wish to have an off-license in their neighbourhood. The wishes and demands of individual consumers hardly come to it.
As know from the credit crunch, it is also very difficult to regulate and control the international financial system. It operates nowhere and everywhere, beyond the reach of any single national government. The companies which make up this system pretty much do what they want without fear of retribution.
But here we are with the three main political parties in the UK advocating private and market led approaches in all aspects of everyday life - from education, public transport, health to waste collection and beyond. But the reality is that we begin to expose services we rely on to the same kind of global investment activities which led to the end of Threshers. People might remember, for example, how 100s of local authorities lost millions of tax-payers money because the Thatcher government encouraged them to hold equity funds with the bank BICC. Unfortunately this went bust and so your local nursery or care-home had to shut. A similar thing has happened to Universities recently, with many holding funds in an Icelandic bank which also went bust. These universities have lost millions are now cutting back spending one education facilities and getting rid of staff.
We might be able to live without local access to cheap booze, but we certainly we would miss access to cheap/free health, education, or transport.
But this is the direction we are going in - following a pernicious mantra that the public sector is all bad and couldn't manage a piss-up in a brewery, whilst the private sector has all the answers and never makes mistakes. Remember this when you pick up your P45 on the way out.
Footnote: there's always a bigger fish
Allied Domecq were themselves taken over by Pernod Ricard, a French company established in the early 1970s, which operates a global network (Italy, Ireland, Cuba, Australia, Asia), around a core business of wines and spirits, including many Irish and Scottish distilleries.
Pernod Ricard, however, are simply another company owned by a bigger holding company - Fortune Brands (who also own Beam - Jim Beam, Courvoisier, Teachers etc). It would seem that there is always a bigger fish.
Sources:
2,000 jobs go as more First Quench stores shut -
Crain's Manchester Business
http://en.wikipedia.org/wiki/First_Quench_Retailing
http://beamglobal.com/
http://www.visioncapital.com/investmentapproach/default.asp
Threshers is quickly disappearing from the British suburban landscape with the closure of another 381 stores.
First Quench are one those elusive companies, which sit in the background quietly managing popular high street names - in this case Threshers, Wine Rack, Haddows and The Local. The first us ordinary folk hear about them is when the go bust or do something amazingly crass, like sell mortgages to people who can't afford to repay them thus sparking a global financial meltdown.
In the distant past, First Quench was owned by a very familiar and comforting name - Whitbread. Whitbread conjures up images of frothy beer in the 1970s and beer skittles with Fred Trueman. The subsequent history of the company, however, is one global corporate machinations. The tale is a familiar one in terms of the development of corporate capital, even though the mantra from the main political parties these days is the private knows best and that the market will resolve all life's problems. The reality is somewhat different, but a well-rehearsed story of merger, take-over, restructuring and job losses.
Without laying it on thick, it was Marx who first observed the tendency in capitalism for businesses to merge and increase their size. Their objective, he argued, is not to be competitive, rather it is to produce the opposite conditions - to monopolise the market and kill off competitors. Hopefully you can see that this runs counter to popular opinion that unregulated free-markets promote competitiveness and innovation.
Merger and intrigue
The short life of First Quench Retailing can be traced back to 1998, with the merger between Whitbread's Threshers chain and Allied Domecq (Victoria Wine to me and you. This brought together 1470 retail outlets - including Thresher Wine Shop, Drinks Cabin, Wine Rack, Huttons, Victoria Wine Cellars, Haddows, Martha's Vineyard, and The Firkin - under one umbrella company.
The clear aim of this strategy is similar to that of Starbucks. It is called 'crowding-out' - replacing every booze/coffee provider in a neighbourhood with a sole supplier, until there is simply no room left for local or independent retailers to operate. In this way a single company can establish control over a network of local monopolies. Such retailers will argue they have to do this in order to compete more effectively with even bigger companies, such as Tesco, who can use their shear size to buy supplies in bulk and drive down the unit cost of products in order to undercut competitors on price. Consumers may get cheaper booze, but they end up buying it from a limited range of suppliers.
Corporate Irresponsibility
But isn't just a story of neighbourhood change. What happens on the high street is explicitly connected to a system of global operations and decision-making.
Business mergers are no longer confined to regions or individual states, they occur on a global scale, facilitated through a menageries of equity or holding companies which comprise the international financial system. And so, there are much bigger companies out there, who are not just interested in controlling individual neighbourhoods, rather their goal is to monopolise whole continents. Consequently the story of First Quench enters the murky world of the City and the international financial system.
Just one year after the initial merger, Allied Domecq sold their 50% share to the notorious pub-co Punch Taverns. In 1991 Whitbread purchased the Peter Dominic Group from Grand Metropolitan for £50m, bringing the Bottoms Up brand into the group. Grand Metropolitan manages a portfolio of luxury brands and companies - diamonds, jewellery, liquor, tobacco, fashion, golf and nightlife across the world. They are like the Alan Whicker of portfolio managers - so understandingly Thresher didn't quite fit this image of exclusivity. Interestingly although Grand Metropolitan are based in California, the company claims to the lineage of The Group dates back to aristocracy of Brittany, France in the Middle Ages!
The Peter Dominic Group, now a separate retail division, disappeared from history, purschased by a Japanese private equity group - Nomura Holdings in 2000 for £225m (Nomura recently bought the failed Lehman Brothers bank).
First Quench, however, was then purchased by the London based Terra Firma Capital Partners in 2002. Threshers then expanded further - purchasing 370 outlets from the failed company Unwins. 170 shops closed and the rest were rebranded into three market niches - 'The Local', 'Thresher' or 'Wine Rack'.
This expanded group then became attractive prey to other equity companies - and so the whole group was sold to Vision Capital in 2007 for £250 million. Notice how after each transaction a zero seems to be added to the value - making some people very rich indeed.
Threshers Group then became First Quench Retailing, with it head office in Welwyn Garden City. But just two years later the new owners put First Quench into administration, closing over 700 stores with some 4000 people losing their jobs.
Vision Capital are one of those companies who don't actually seem to make or do anything. Rather, they manage portfolios, including the aforementioned Terra Firma, Northern Foods, Bridgepoint, AEA Technology, Legal & General, Credit Suisse and Deutsche Bank.
Vision Capital's intention is to buy up 'mature' companies and 'Build stronger companies and create competitive returns for our investors'. They do this by:
- developing a clear strategy for each business
- building and re-energising management teams
- ensuring that operating plans are executed
- reducing and managing risk
- injecting investment capital to support each company’s strategy and optimise its balance sheet
- making follow-on acquisitions and disposals.
In others words they are interested in asset stripping and restructuring. Vision have absolutely no interest in your local outdoor and providing you with a cheap four-pack for Dave's party. Their priority is the capital value of the whole business, and more importantly the property assets they now own.
At times of crisis this is what capitalism does. It transfers capital from businesses which make things and provide services, and transfers that investment into less risky investments, such as property. You might be thinking the property market is depressed and this strategy makes no sense, but these companies operate on a different scale in terms of space and time, thinking globally and anticipating future trends. They are quite happy to sit on property and land assets for decades before realising a return, with additional zeros always added to the value. The human costs of this though are huge, with your local local high street going into decline and people losing their livelihoods.
The people who run these global investment groups simply don't share the same moral perspective of ordinary folk. They are remote from the impact of the decision they make. Their primary concern is making as much money as possible for their investment backers. The rules of the market simply don't apply. Supply and demand as we might know it, is undermined by the actions of these huge corporate entities who pay no heed at all as to whether people in a particular community wish to have an off-license in their neighbourhood. The wishes and demands of individual consumers hardly come to it.
As know from the credit crunch, it is also very difficult to regulate and control the international financial system. It operates nowhere and everywhere, beyond the reach of any single national government. The companies which make up this system pretty much do what they want without fear of retribution.
But here we are with the three main political parties in the UK advocating private and market led approaches in all aspects of everyday life - from education, public transport, health to waste collection and beyond. But the reality is that we begin to expose services we rely on to the same kind of global investment activities which led to the end of Threshers. People might remember, for example, how 100s of local authorities lost millions of tax-payers money because the Thatcher government encouraged them to hold equity funds with the bank BICC. Unfortunately this went bust and so your local nursery or care-home had to shut. A similar thing has happened to Universities recently, with many holding funds in an Icelandic bank which also went bust. These universities have lost millions are now cutting back spending one education facilities and getting rid of staff.
We might be able to live without local access to cheap booze, but we certainly we would miss access to cheap/free health, education, or transport.
But this is the direction we are going in - following a pernicious mantra that the public sector is all bad and couldn't manage a piss-up in a brewery, whilst the private sector has all the answers and never makes mistakes. Remember this when you pick up your P45 on the way out.
Footnote: there's always a bigger fish
Allied Domecq were themselves taken over by Pernod Ricard, a French company established in the early 1970s, which operates a global network (Italy, Ireland, Cuba, Australia, Asia), around a core business of wines and spirits, including many Irish and Scottish distilleries.
Pernod Ricard, however, are simply another company owned by a bigger holding company - Fortune Brands (who also own Beam - Jim Beam, Courvoisier, Teachers etc). It would seem that there is always a bigger fish.
Sources:
2,000 jobs go as more First Quench stores shut -
Crain's Manchester Business
http://en.wikipedia.org/wiki/First_Quench_Retailing
http://beamglobal.com/
http://www.visioncapital.com/investmentapproach/default.asp
Friday, 20 November 2009
Environmental Disaster
Environmental disaster
Salford City Council continues with its strategy to blight the lives of its residents with plans to build warehouses on 98 acres of Green Belt land to the west of the A57 between Irlam and Peel Green. This will involve the loss of top grade farming land and likely closure of Boysnope Golf Course.
This proposal comes after recent planning decisions which will lead to the loss of over 200 acres of open space to the East of the A57 to accommodate:
- a waste dump, with specific loss of tree habitat adjacent to Boysnope Wharf
- a port which will handle 300,000 containers a year
- a rail freight terminal
- rugby stadium and related commercial developments
- rail and road infrastructure to service these facilities
Don't be fooled by the 'green credentials' of the Port. Shipping is about to ovetake air transport as a contributor to green house gases. Unlike road and air travel, shipping has not been subject to the same stringent environmental regulation, and is highly polluting (The Independent, 2007). Locally the Port development alone will lead to an additonal 1500 traffic movements at peak times, contributing further to increasing emission, especially as this route is already congested (Salford City Council). As these developments take place, developers Peel Holdings will also begin to lobby strongly for an upgrade of Barton Airport as Manchester's second airport, which in the long term will wipe out reduction in CO2 resulting from the transfer of freight from road to rail/ship.
In addition to the loss of green belt, other parts of the Barton and Chat Moss will be compromised by the construction of a rail freight spur to connect the port to the Liverpool-Manchester railway. This line will run adjacent to housing and across the safety zone currently used by aircraft at Barton.
In short, the combination of these development will be an environmental disaster.
What does this mean for the local community?
The economic argument is fairly clear. These developments will attract around £100m of private investment and create around 2000 jobs, if the estimates prove true.
However, the quality of these jobs is open to question. They will involve mainly low-grade warehouse work. The employment created is small relative to the total size of the development, with relatively few jobs being created spread over a large area.
The communities of Barton, Cadishead and Irlam may benefit from these additional employment opportunities, but jobs have to be balanced against the other impacts:
- loss of amenity space including natural habitat and leisure facilities
- the loss of local green-belt
- the threat of Irlam becoming subsumed into urban sprawl, losing its identity as a unique place
- the worsening of traffic conditions in and out of Irlam at peak times
- the threat of employment losses as existing business can no longer operate within the town because of congestion
Irlam, has already lost 15 acres of open space to an inappropriate housing development which has compromised the local environment with raw sewage leaking into the Irwell wiping out the local fish population (Salford Advertiser)
As it stands there is no meaningful committment from the private developers to address problems of access to and from this new development - indeed the proposal on the table - Western Gateway initiative is likely to excerbate problems for the community, by closing access to J11 of the M60 and re-directing traffic to the Peel's developments around the Trafford Centre. There is simply a vague consideration that at some point down the line Metrolink will be extended into the Port area. Big deal!
What's actually needed is a comprehensive strategic review of transport infrastructure in western Salford.
What to do?
The decision to build on 98 acres of Green Belt underlines Salford Council's hollow proclamations about the city's green credentials.
We need to question whether this development is needed at all. Salford is a shrinking city, with some 20,000 fewer residents today compared to 1991. With the decline of industry there are 100 acres of brownfield sites within the city boundaries. Under the current economic conditions there is absolutely no reason to develop on green belt land.
You can have a voice, but you need to express your views by January 10 2010.
Click Salford's Core Strategy to have your say.
Source: Salford wants to build on green belt land - News - Manchester Evening News
Salford City Council continues with its strategy to blight the lives of its residents with plans to build warehouses on 98 acres of Green Belt land to the west of the A57 between Irlam and Peel Green. This will involve the loss of top grade farming land and likely closure of Boysnope Golf Course.
This proposal comes after recent planning decisions which will lead to the loss of over 200 acres of open space to the East of the A57 to accommodate:
- a waste dump, with specific loss of tree habitat adjacent to Boysnope Wharf
- a port which will handle 300,000 containers a year
- a rail freight terminal
- rugby stadium and related commercial developments
- rail and road infrastructure to service these facilities
Don't be fooled by the 'green credentials' of the Port. Shipping is about to ovetake air transport as a contributor to green house gases. Unlike road and air travel, shipping has not been subject to the same stringent environmental regulation, and is highly polluting (The Independent, 2007). Locally the Port development alone will lead to an additonal 1500 traffic movements at peak times, contributing further to increasing emission, especially as this route is already congested (Salford City Council). As these developments take place, developers Peel Holdings will also begin to lobby strongly for an upgrade of Barton Airport as Manchester's second airport, which in the long term will wipe out reduction in CO2 resulting from the transfer of freight from road to rail/ship.
In addition to the loss of green belt, other parts of the Barton and Chat Moss will be compromised by the construction of a rail freight spur to connect the port to the Liverpool-Manchester railway. This line will run adjacent to housing and across the safety zone currently used by aircraft at Barton.
In short, the combination of these development will be an environmental disaster.
What does this mean for the local community?
The economic argument is fairly clear. These developments will attract around £100m of private investment and create around 2000 jobs, if the estimates prove true.
However, the quality of these jobs is open to question. They will involve mainly low-grade warehouse work. The employment created is small relative to the total size of the development, with relatively few jobs being created spread over a large area.
The communities of Barton, Cadishead and Irlam may benefit from these additional employment opportunities, but jobs have to be balanced against the other impacts:
- loss of amenity space including natural habitat and leisure facilities
- the loss of local green-belt
- the threat of Irlam becoming subsumed into urban sprawl, losing its identity as a unique place
- the worsening of traffic conditions in and out of Irlam at peak times
- the threat of employment losses as existing business can no longer operate within the town because of congestion
Irlam, has already lost 15 acres of open space to an inappropriate housing development which has compromised the local environment with raw sewage leaking into the Irwell wiping out the local fish population (Salford Advertiser)
As it stands there is no meaningful committment from the private developers to address problems of access to and from this new development - indeed the proposal on the table - Western Gateway initiative is likely to excerbate problems for the community, by closing access to J11 of the M60 and re-directing traffic to the Peel's developments around the Trafford Centre. There is simply a vague consideration that at some point down the line Metrolink will be extended into the Port area. Big deal!
What's actually needed is a comprehensive strategic review of transport infrastructure in western Salford.
What to do?
The decision to build on 98 acres of Green Belt underlines Salford Council's hollow proclamations about the city's green credentials.
We need to question whether this development is needed at all. Salford is a shrinking city, with some 20,000 fewer residents today compared to 1991. With the decline of industry there are 100 acres of brownfield sites within the city boundaries. Under the current economic conditions there is absolutely no reason to develop on green belt land.
You can have a voice, but you need to express your views by January 10 2010.
Click Salford's Core Strategy to have your say.
Source: Salford wants to build on green belt land - News - Manchester Evening News
Friday, 6 November 2009
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