The Co-operative Group, the UK’s biggest mutual owned by 8.5 million people, announced this week that it has returned to profit. This development will likely surprise anyone who remembers when chief executive Richard Pennycook was forced to admit that, '2013 was a disastrous year, the worst in our 150-year history'.
The Co-op, which once had funeral, pharmacy, insurance, banking and a supermarket among its businesses had lost a staggering £2.5 billion and faced the near collapse of its banking arm, which had a £1.5 billion hole in its finances. Former City minister Lord Myners, who resigned from the Group’s Board, blaming former managers, ‘who were allowed to run amok like kids in a sweet shop’.
If it wasn’t bad enough that mismanagement had almost run the mutual into the ground, there was also the matter of the Co-op Bank’s former Chairman Reverend Paul Flowers being charged with drug offences. The Group received extensive coverage not just on the business pages but across the front pages thanks to the so-called Crystal Methodist.
In short, it was a very public, very ugly meltdown.
The Group subsequently introduced a turnaround plan – Rescue, Rebuild, and Renew. So this week’s announcement that they are back in the black marks a major milestone for the troubled group: it’s the end of the Rescue phase of the program.
Now it remains to be seen if the Co-op can build on this momentum and successfully complete the turnaround. The group has returned to profit because it sold its pharmacy and farming businesses but there is still a lot of work to be done. What sets the Co-op apart from other businesses is that it promises that it is ‘not just about profit’. Before the Co-op became plagued by scandal, the Group’s 2012 accounts even stated, ‘In line with our member-owned model, investment decisions are not driven by the purely financial demands of shareholders, but by the wider concerns of our members’. And that promise is also exactly why this turnaround can’t just be about profit.
In order to restore its tarnished image, the Co-operative also has to find a way to regain the respect, loyalty and trust it once held. In other words, the comeback has to be as much about restoring these values as it is about restoring value to its businesses.
During this short Easter week, Abchaps hosted a Market Lunch, attended the Third Annual Nowruz Commission Gala Dinner at the Institute of Directors and caught up with Man Group.
Westhouse Securities announced that Andy Crossley will be joining as Managing Director from Peel Hunt. Meanwhile, Mike Falvey moves from Four Seasons Health Care to partner of the performance team at KPMG. Baring Asset Management also appointed Edmund Chong, previously of HSBC, as Head of Sales, Client Service and Business Development, distribution for Asia ex. Japan.
“Crystal Methodist” – A Methodist minister with a penchant for crystal meth and cocaine. A phrase whose origins can be traced back to the Daily Mail, if only because of the high number of headlines featuring the UK’s very own Crystal Methodist, Paul Flowers.
This Saturday is, of course, all about the Oxford Cambridge Boat Race. It's always quite the spectacle, so make sure you pick out a good spot along the river to watch the race unfurl. Not into the whole Oxbridge rivalry? Perhaps the Oxford Cambridge Goat Race is more your thing.
Head to the Garden Museum in Lambeth for an exhibition about the New Covent Garden Flower Market. Listen to excerpts of interviews about the market, what it’s like for people working there, the connection to the old Covent Garden Market and the changes that are happening now.
Grab a bargain on Sunday at Judy’s Affordable Vintage fair, at York Hall in Bethnal Green, with a selection of hand-picked stalls packed with affordable vintage fashion, accessories and homewares.
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