Death of a salesman
What happens when you lose your closest colleague?
For nearly 20 years, David Whelan groomed his son-in-law to succeed him. Now he must find somebody else. Together with Duncan Sharpe, Mr Whelan built up JJB Sports to a sizeable chain, took it public in 1994 and continued to expand it through acquisitions. The younger man’s responsibilities steadily increased: last year he was appointed chief executive, as Mr Whelan stepped back to the role of chairman. Mr Sharpe also took on senior positions at Mr Whelan’s private companies, which include professional football and rugby clubs, a hotel and one of the world’s oldest pie manufacturers.
But on Monday, October 7 Mr Sharpe failed to appear at JJB’s Wigan headquarters. Around lunchtime, a farmer found his body hanging from a tree, eight miles from the home where he lived with Mr Whelan’s daughter, Jayne, and their four children.
It is hard to think of a starker illustration of how the private emotions of a single executive can affect commerce. At JJB, and Mr Whelan’s private companies, Mr Sharpe’s closest colleagues felt the acute pain of bereavement. Thousands of others, less personally involved, wondered what impact the death would have on their jobs.
Three weeks later – and shortly before the promotion of Tom Knight, JJB’s operations director, to chief executive – Mr Whelan invites the Financial Times to visit him in Wigan and talk about how the various companies will move forward. We meet at the JJB Stadium, home to Wigan Athletic, where Mr Whelan watches his team lose its position at the top of the second division by drawing with Queen’s Park Rangers. A forbidding figure in a black raincoat, he sits beside his wife and their eldest grandson. At moments of tension his hand shoots from his pocket to claw the air before him – then returns to the pocket just as fast.
The next morning, he says, Barry Dunne, JJB’s property director, will collect him in the company helicopter to visit possible sites for new stores across the South West. Mr Whelan will not sign the cheque until he has seen a site himself. He used to let Mr Sharpe take his place but nobody else. Now he must do it all.
“Me and Duncan got on fantastic. I talked to him about everything. Six or seven months ago, I said, ‘What’s up, Duncan? You’re looking worried. You aren’t saying things in meetings.’ He said, ‘I’m pissing blood, Dave.’ ‘Right,’ I said: ‘Hospital!’ ” Specialists found a growth in Mr Sharpe’s bladder. “He’d been to see a doctor on Friday (before he died) but we don’t know what news the surgeon gave him. And we aren’t pressing to find out. It’s a painful enough business as it is.”
The next day, the helicopter trip is cancelled. Instead, Mr Whelan continues the tour of his businesses. Starting from the Wrightington, his hotel outside town, we visit Poole’s Pies – where edges of pastry cling to the back of his shoes as he marches between the vats of meat.
Mr Whelan’s pride in Poole’s Pies is easier to understand if you know that natives of Wigan are known, not entirely affectionately, as pie-eaters; and, though he was born in Bradford, Mr Whelan has spent most of his life in the former mining town. JJB’s head office, built on what used to be a brick works, overlooks the Heinz factory – another big local employer.
Next door is JJB’s vast warehouse, the running of which costs a massive 1 per cent of turnover. Conscious of this, Mr Whelan is hot on detail. This afternoon, wandering around the warehouse, he asks a startled employee why the lights are on: “You’re blowing money out the door. Twenty quid an hour.” And when he finds two men standing idle, he stumps off mumbling that they’re “lazy bastards” and asks the super-visor what is going on. “Kick ‘em up the arse, get ‘em working,” he orders. (Renowned as a tough manager, Mr Whelan freely suggests that some staff may consider him “a bastard”. But he says he does not care unduly about that. “Because I’m fair.”)
When unable to make these inspections in person, Mr Whelan watches wages-to-sales figures. “If it’s not looking good, they have to get rid of people,” he says bluntly. Among those he has dismissed by phone from his holiday home in Barbados is Bruce Rioch, former Wigan Athletic manager.
Like Mr Rioch – but unlike most other club chairmen – Mr Whelan played football professionally. But in the 1960 FA cup final, playing for Blackburn Rovers, he broke his leg and his career ended. With a Pounds 400 bonus for reaching the final, he set up a stall in Wigan market. By 1978 he had 10 supermarkets, which he sold to William Morrison for Pounds 1.5m. But retirement did not suit him. He bought a sports shop, JJ Bradburn, and gradually built it into a chain.
Five years later, his daughter met Duncan Sharpe, a golf professional who had left school at 16. “When Jayne said it was serious,” Mr Whelan recalls, “I thought, ‘I’ve got to know if he’s all right.” He met Mr Sharpe, concluded that he was “a grand lad, 100 per cent honest” and two weeks later offered the 23-year-old a job as an area manager.
His own son, Paul, also worked for Mr Whelan briefly but for medical reasons was unable to carry on. “So you see, Duncan was my only son that could work,” he bleakly notes. As for his daughter Jayne, her own retail expertise is crucially different (see below). “Jayne has always wanted to be in ladies’ high fashion. It’s a ruthless market, that,” he says respectfully. “If you don’t buy right, you’re dead in the water.”
JJB, despite many years of strong growth and healthy profits, has recently experienced similarly tough conditions. In July the company issued a profit warning. Large sales of low-margin replica kits, propelled by the World Cup, seemed to reduce demand for higher-margin goods. The immediate effect was a 38 per cent drop in the share price. Further grim news was due in the half-year results Mr Sharpe was to have presented later in the week when he died. Could this have had anything to do with his suicide? “It had nothing to do with the results,” says Mr Whelan firmly. “They were not bad results.” (Plainly, the City felt they were.)
Nor does Mr Whelan assume that illness was necessarily the sole cause of Mr Sharpe’s suicide. “Inheritance is a big problem. Duncan was beginning to take the reins. Did I give him too much, too soon? He had been a simple, hard-working lad. And he married into a family that had a few bob . . . Could I have been more helpful? It’s bad enough to lose someone to natural causes. With this, you think, ‘Why? What the hell has he done that for?’ And I have no answer. I miss him like hell but . . . you’ve got to get up and get over it.”
In family businesses, plainly, the ordinary motivations of managers are mixed with something more personal. “This is not just my job,” says Mr Whelan. “It’s my life. If you hurt JJB, you hurt me.”
For months there have been rumours of a management buy-out but that now seems unlikely. “Yes, I would be happy if the company was private,” admits Mr Whelan, bruised by his recent experiences in charge of a public company. “We couldn’t have grown this big without the market – but we’re working as hard as we ever worked and (the markets) knock hell out of your share price, sometimes for no reason.”
If there is one thing he has learnt from Mr Sharpe’s death, though, it is that the institutions that give him difficulty are run by people who have feelings. “Everybody thinks that the City is a tough, hard place. I have had hundreds of letters and cards, beautiful letters written from the heart about how sorry they are. Perhaps it’s not such a hard place after all.”
Jayne Sharpe set up Garbo Fashion after the birth of her fourth child, to sell designer clothes to women across the North West. The first store opened in Wigan, the second in Southport. Then her husband, Duncan, found a site for her third – in prosperous Wilmslow.
“He came home and said: ‘I’ve seen this car showroom; you’ve got to come and see it.’” The building was severely dilapidated. “It frightened the life out of me. But Duncan was normally right about this kind of thing. He found a lot of the sites for JJB. He got some drawings done, some visuals. He said: ‘You go ahead with getting the stock.’ ”
The Wilmslow branch opened 18 months ago, supplying high fashion to customers from all over the North West, including several local footballers’ wives. This year it won an award from Drapers Record for store of the year.
Garbo has much in common with JJB but the businesses are crucially different.
“The ladies here really know about clothes,” says Mrs Sharpe. “We have to be careful not to sell the same thing to people going to the same event. We will buy only two Ungaro dresses, for example.” JJB, clearly, has no such problem with replica kits.
British teams are not always hugely successful but their supporters are second to none when it comes to buying and wearing replica kits. Some credit for that is due to the late Duncan Sharpe.
Most clubs introduce a new kit every year, typically in the spring. A new kit sells strongly after launch, then sales slow in summer. They rise again with the new season and steadily increase towards Christmas before falling off again. “This is probably the only item JJB sells that has a sell-by date on it,” says Colin Russell, associate director.
Remarkably, JJB Sports claims it never finds itself burdened with out-of-date stock. “We always sell out,” says Mr Russell. “That’s because of Duncan. He would take a calculated risk on buying up a large consignment of low-priced kits” – from manufacturers, near the end of the kit’s life – “and sell it on to customers. In the early 1990s, around the start of the Premier League, he showed what kind of market was available at reduced price.”
At JJB, replica shirts cost about Pounds 35 for adults and Pounds 25 for children – as much as Pounds 5 less than the recommended retail price in many cases. “I have never had a letter from a customer saying they don’t think the kits are value for money,” says Mr Russell.
Consequently, margins are tight. “If you’re left with 12 per cent,” says David Whelan, JJB’s chairman, “you’re doing well.”
Switching to sales mode, he adds: “Mothers love replica kits. What else are they going to buy the kids for Christmas? The youngsters will never have that shirt off their backs. You don’t have to iron it. It’s drip-dry. What other shirt can do that?”
1844 words. First published 5 December 02. © The Financial Timesblog comments powered by Disqus