By NEIL HARTNELL
Tribune Business Editor
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”.