By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
One of the Bahamas’ best-known and historic retail names is ceasing business at month’s end with the loss of “under 15 jobs”, its owner yesterday telling Tribune Business he had been unable to “make inroads” into the annual $1 million losses it was suffering when he took over.
Confirming that John S George’s last store in Palmdale will close at end-July, Andrew Wilson blamed the building and housewares retailer’s demise on a combination of the recession, “ridiculous” electricity costs and intransigence by the National Insurance Board (NIB).
Having downsized John S George from five stores, and around 75-80 employees when he took it over in 2007, Mr Wilson, a retail entrepreneur, said he had re-deployed some of those workers to other formats he owns.
Those include Quality Business Centre (QBC) and Radioshack, plus a variety of fashion store formats, but Mr Wilson conceded that the recession had not been kind to his group as a whole, with staff downsized from a peak of around 150 to the current 50-55, a drop of two-thirds.
Confirming that he would not have acquired the already-troubled retailer from Ken Hutton’s ill-fated buyout group had he known the severity of the oncoming recession, Mr Wilson told Tribune Business: “John S George is closing at the end of the month.
“I would say the main factors are the recession, the cost of electricity and I had some NIB matters that dealt a death blow to the company.”
Mr Wilson and John S George were among the companies taken to court, and prosecuted, by NIB several years ago for non-payment of contributions to the public social security scheme.
He yesterday told Tribune Business that the sudden economic downturn, coupled with John S George’s financial condition, meant NIB contributions were being paid “partially but not totally”on behalf of employees.
Mr Wilson added that shortly after taking over John S George, he found “NIB were not prepared to work with me” in agreeing a payment plan and schedule for the outstanding monies.
Accusing NIB of failing to account for the economic downturn, he said: “In almost 40 years as an entrepreneur in the Bahamas I’ve always met my NIB obligations prior to the recession, but NIB were just not concerned about it.
“They were more concerned about receiving payment, but were impervious to the impact on the business or the harsh environment.”
And he added: “Bottom line is that when an organisation as powerful as NIB says they are not open to negotiation, but if you don’t pay you’re going to be prosecuted and sent to jail, the first thing you do is cut NIB a cheque.”
This, “combined with a very depressed economy”, had a terminal effect on Mr Wilson’s chances of turning John S George around and rescuing it.
And NIB’s “hard line” also impacted his retail group’s overall financial standing, exacerbating the recession’s woes, Mr Wilson said. “I had approximately 150 employees through my group of companies, and I have approximately 50-55 today,” he added, illustrating the recession’s effects.
Adding that “under 15 jobs” would be affected when John S George closes, the retailer being in the process of selling off its remaining inventory, Mr Wilson told Tribune Business: “We downsized throughout the group and cut the bleeding in John S George severely.
“We moved from approximately 75-80 employees down to 15. That was the primary driver. That was 90 per cent of the cut. We also cut off the A/C.
“The cost of electricity in Nassau is just ridiculous. At one point it was in the region of $8,000 per month, so we cut off the A/C.”
Despite stemming the losses at John S George, which were running at $1 million when he took over in 2007, Mr Wilson told this newspaper: “By and large, we were not able to make any inroads, as nothing was happening in the market.
“Overall, I thought at the time I took over the company I would be able to make a go of it, and did not anticipate this deep recession. Had I known, I certainly wouldn’t have done it. It’s been quite an education for me. At the end of the day, I failed. It’s not the first time I failed.”
Mr Wilson said he had reached an agreement in principle to sell John S George’s Palmdale store, although he declined to reveal details. The warehouse has already been sold to the D’Albenas wholesale agency.
As for his other businesses,, Mr Wilson said he was confident QBC “will survive”, and he was ensuring the group remained “lean”.
Comments
Arob 11 years, 10 months ago
My thoughts… RECESSION: Yes, even the economists up North did not know that their country was in a recession. Unfortunately, I think Mr. Wilson’s problems are more complex.
NATIONAL INSURANCE: Mr. Wilson, you claim that your failure to pay NIB is one of the reasons for your financial woes. This was your poor decision. Your budget for salaries and wages included the salaries and wages earned, and national insurance fees is a part of salaries and wages. You were wrong to withhold the NIB fees—your portion of the NIB fees and the employees’ portion that was deducted from their pay checks. This was unfair to your employees. It was unethical.
Please, do not blame NIB. As a seasoned businessman you are aware of your obligation to pay National Insurance.
However, in spite of your claim that paying your debt to NIB “dealt a death blow to the company” Mr. Wilson, you were able to choose whether to rebuild a historical company “John S. George” or continue with your other businesses. Your choice is obvious. Since 2007 your other businesses have expanded. As a matter of fact, QBC and Radio Shack are in direct competition with John S. George. Also, while John S. George is “dying” your competitors have expanded and new competitors have emerged.
ENTREPRENEURSHIP: Mr. Wilson is a businessman. He purchased an old business that required a new vision. Just reading his lament (Mr. Wilson) points to a “poor swimmer in deep water”.
As a former customer of John S. George, I watched the changes over the years. It is sad to see the end or an era, the end of John S. George, the oldest retail store in our country (founded in 1855).
maryann 11 years, 10 months ago
The average Bahamian Buinessmen/women donot see the need to pay NIB payments for their employees, who ever government pressure them to pay or take them to court to abide by the laws of the land will become their enemy for the rest of their living lives and who employees look into the matter of their NIB not being paid will in some cases will no longer have a job ,These same Buiness people will hire people who have no work permit to work in this country or whom have work permit from people who they no longer work for to avoid making NIB payments, because they will. not have these people questioning them about not making payments. The National Insurance Board and the Immigration Department needs to be more diligent in what is going on in this country and stop turning a blind eyes to what is going on in this country.
concernedcitizen 11 years, 10 months ago
what he really meant to say ,when the plp in certain people don,t have to pay NIB ,W Jones ,B Tiger ,Rithcie ,etc ,then the fnm come to power and mess our system all up ,,lol
really 11 years, 10 months ago
i would say the main factor is you just didnt know what you were getting yourself into wilson
Michali 11 years, 9 months ago
I have always admired Mr. Wilson for his courage in opening new businesses and his ability to adapt when certain aspects of a new business went awry. However, it does seem that he took on too much when he bought John S George and it is sad to see its demise. His neglect in paying full NIB contributions for his employees was inexcusable, even given the downtown in the economy and resulting loss of revenue. Mr. Wilson has had to close or revamp several of his stores and I do hope he is able to survive with the remaining few. I would encourage him as a Bahamian businessman to try and ride out the storm.
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