Courts Plc Business Information, Profile, and History

Company Perspectives:

Courts is a truly global company specializing in the retailing of home furnishing and electrical products with stores trading somewhere in the world at every hour of the day and night, 365 days a year, producing sales of over £2 million a day and profits of over £1 million a week. We are proud to have outstanding international management in all our centers of operation, who will help the Group to achieve increasing success in the future.

History of Courts Plc

Courts Plc is one of the United Kingdom's leading retail furniture and home appliance companies. Yet, with more than 300 stores operating in 20 countries worldwide, Courts is also a globally operating company that can boast that the sun never sets on its retail empire. Based in Surrey, Courts operates more than 100 stores in the United Kingdom, including England, Wales, and Guernsey. The company's U.K. network of High Street shops and larger edge-of-town superstores contribute 40 percent of Courts' annual sales, which topped £732 million in 2001. The bulk of the company's retail network operates from Antigua and Barbuda, Barbados, Belize, Dominica, Fiji, Grenada, Guyana, Indonesia, Jamaica, Malaysia, Mauritius, Papua New Guinea, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Singapore, Trinidad and Tobago, and Bermuda. In these markets, the company is generally the domestic market leader; the majority of the company's overseas revenues come from its home appliance and electronics sales. The Caribbean and southeast Asian markets each generate more than 25 percent of Courts annual sales. Courts Plc is listed on the London Stock Exchange. A number of its subsidiaries, including those in Jamaica, Malaysia, Barbados, and Mauritius, have been listed on their local stock exchanges as well. While the company's overseas expansion has thrived, its attempt to move into more markets nearby has proven more difficult. In 2001, Courts was forced to exit Ireland after several years of losses there. Led by Chairman Paul Cohen and Managing Director Bruce Cohen--the Cohen family, which built the chain from a single store in 1946, holds a 40 percent interest in the company--Courts has been shifting its emphasis on development of its superstore concept for the new century. The new concept broadens the company's retail mix beyond furniture and appliances to include "everything for the home under one roof."

19th-Century Furniture Retailer

The first of what was to become the Courts furniture retail chain was opened in Canterbury, England, in 1850. William Henry Court inherited the store in 1860. Under Court's ownership, the store, originally a small one-man shop operating in the shadows of the Canterbury cathedral, grew into a thriving retailer and furniture maker. In order to supply his store, Court began producing his own furniture, opening a number of workshops. Courts furniture became known for its quality, and the store soon attracted a growing clientele from beyond Canterbury itself. Nonetheless, Courts remained a single-store operation throughout its first century of business. William Court's son Percy took over the store in the early 1930s, registering it as a limited company in 1933. Under Percy Court, the store expanded, adding garden displays to its furniture displays. The company also capitalized on the fame of The Canterbury Tales, adding Chaucer to its logo and encouraging customers to "make a happy pilgrimage" to the store.

World War II nearly ended the Courts retailing name, however. In 1942, the German air raids over England had caused widespread devastation, including the Courts store, which suffered a direct hit during a bombing raid.

At the end of the war, Percy Court sold his family's store to three brothers, Albert, Edwin, and Henry Cohen. The Cohen brothers had come from the family that had built up the British and Colonial Stores Group, which operated furniture stores in England, Scotland, Wales, Ireland, and Canada chiefly under the brand name Cavendish & Woodhouse. British and Colonial at one point counted among the world's largest furniture retail chains. Percy Court sold the company to the Cohen brothers in 1946, but remained with the company as a director--he was responsible for store displays--until his death.

The Cohen brothers sought to build on Courts' reputation for quality furniture in the region and began to plan the first phase of the Courts company's expansion. By 1949, the family had added five more stores to the Courts network. In order to encourage consumers, who had been hard hit by the economic hardships of the postwar era, to buy at its stores, Courts began offering credit. Customers came, and the company began a steady expansion drive through the 1950s, adding two or three new stores each year.

Courts' expansion remained limited to its southern and eastern England base, and by 1959, the company's chain had swelled to 35 stores, including its first store in Cardiff, Wales. That same year, Courts went public on the London Stock Exchange. The public offering was to enable the company to continue to develop its U.K. business over the next decades.

Yet, the end of the 1950s also saw the company turn to the overseas market for expansion. Rather than developing an export business, however, Courts determined to bring only its brand name and retailing expertise to its new markets. Products for its new stores were to be furnished from their local markets, and the company also adopted a policy of hiring practically all of its overseas employees locally.

Jamaica became Courts' first foreign market when the company opened a store in Kingston in 1959. Less than a year later, the success of the first Courts store led the company to open a second Jamaican store in Mandeville. Meanwhile, the first of a new generation of the Cohen family were joining the company, starting with future Chairman Paul Cohen in 1956, who was joined by Bruce Cohen in 1964.

International Expansion in the 1970s

By the mid-1960s, Courts' overseas success encouraged the company to pursue a wider international expansion plan. Yet, Courts specifically sought smaller overseas markets, many of which had roots in the British colonial era, in which the company was able to achieve market dominance. This "big fish in a small pond" formula brought the company to Barbados in 1965.

Despite Courts' success in that market, the small size of Barbados meant that the company would not be able to expand its operations there beyond a few stores. Instead, Courts responded to the market's geographical limitation by expanding its product offerings. Barbados became the first of the Courts stores to offer a wider range of products than just furniture, as the company introduced home appliances and other household equipment, such as sewing machines and bicycles. This product mix was to become adopted by all of the company's foreign stores--and quickly became the largest source of store sales--before being introduced to the company's growing U.K. operations as well.

Courts' Jamaican operations had continued successfully throughout the 1960s. In 1969, the company decided to place its Courts Jamaica subsidiary's shares on the Jamaican Stock Market. In this way, the company continued its original policy of building a strong local base for its international subsidiaries. The public listing helped the company's Jamaican operations expand to become one of the largest of the foreign Courts subsidiaries. The company's retail network on the island was eventually to grow to more than 30 stores. Courts began to expand throughout the Caribbean region, opening subsidiaries and stores in Antigua and Barbuda, Belize, Grenada, Guyana, Dominica, St. Kitts and Nevis, St. Lucia, Trinidad and Tobago, St. Vincent, and the Grenadines. In all, the company's operations in the region consisted of some 120 stores and provided 27 percent of the company's total sales at the turn of the 21st century.

Courts turned from the Caribbean to the Asian Pacific at the start of the 1970s. In 1971, Courts entered Singapore, which was to provide a springboard for the company's expansion throughout the region. In that same year, Courts also opened a store in Suva, the capital of the Fiji Islands. That store was to be only the first of a chain of more than 20 stores operating in the Fiji island chain under both the Courts and the new Homecentres store names. In 1978, the company's Barbados operations became the next Courts subsidiary to go public on its local stock exchange.

Other markets followed in the early 1980s, including the Channel Islands, which saw the first of its Courts stores in 1980; St. Lucia, where the company opened the first of six stores in 1981 (a seventh store was announced for 2002); and, with the first of nine stores opening in 1983, in Papua New Guinea. As with the company's other overseas stores, stores in the new market featured a diversified mix of products ranging from furniture to home appliances.

Meanwhile, back in the United Kingdom, Courts had continued its steady expansion, and by the mid-1980s the company's retail network there neared 100 stores throughout the south and east of England and in Wales. In 1985, Courts began to adapt the diversified product mix of its international operations to its domestic stores. With the addition of home appliances and electronics goods, Courts began to develop a new "superstore" retail concept. Rather than take up residence in the company's traditional High Street locations, the new superstores were located on the outskirts of town. These locations provided the opportunity for larger floor space as well as a widened customer base than its center-of-town stores.

A Mammoth Retailer for the 21st Century

In the mid-1980s Courts continued to enter new markets, now using a new store name, Courts Mammoth, reflecting the stores' large size and diversified product mix. In 1985, the company opened its first store in Mauritius, in the Indian Ocean, where the store name became Courts Mammouth to appeal to the market's French-speaking population. Two years later, Courts Mammoth opened in Malaysia, which became one of Courts' single most important foreign markets. The company also continued its expansion in the Caribbean, opening up stores in Antigua and Grenada. By then, the company had seen a changing of the guard, as former Managing Directors Paul and Bruce Cohen took up the chairman and chief executive seats, respectively.

Courts' foreign expansion continued into the 1990s. At the beginning of the decade, the company's Mauritius operations became the next subsidiary to be listed on the local stock exchange. Two years later, Courts Singapore also became a public company, listing on that country's stock exchange. Meanwhile, Courts added operations in Trinidad and Tobago, forming a partnership with local company Huggins Retail in 1991; the company also ventured onto the South American continent for the first time, through a partnership with Geddes Grant to enter Guyana in 1993. The company later added operations in Central America as well, in Belize.

Back at home, Courts began preparing an assault into other U.K. regions. In 1996, the company began opening stores in the north of England. The company also opened its first branch--a superstore in Dublin--to take it into Ireland, followed by a second store in Blanchardstown. Yet, while the company's foreign operations remained dynamic through the end of the decade, the company's U.K. branch was starting to struggle, with profits brought down by its difficulties in penetrating the north of England and steady losses at its Irish location. By 2000, the company's U.K. operations were in a slump--despite contributing 40 percent of the company's revenues, profits amounted to just £1.5 million. In comparison, the company's southeast Asian branches added £24 million in operating profits, and its Caribbean network generated nearly £40 million in profits.

By the end of its 2001 fiscal year, the company's inability to penetrate the Irish market forced it to close its stores there. The company had also placed its U.K. operations under review and put into place a restructuring plan designed not only to shave off some £20 million per year in costs, but also to rejuvenate the Courts brand image and to recast the company as an upmarket retailer. The company continued its shift toward an emphasis on superstores, boosting that concept with the introduction of new textile and curtain boutiques. The company now sought to redefine its store concept as "everything for the home under one roof."

If the company's U.K. operations were falling behind a bit, its overseas network continued to flourish at the start of the new century. One of the most dynamic of the company's markets was Malaysia, where the company had rapidly built a network of more than 50 Courts Mammoth stores. In the fall of 2001, the company continued its policy of floating its subsidiaries, taking a listing on the Malaysian stock market for that subsidiary, while announcing plans to increase its store network in that country to nearly 70 by the end of 2002.

The Cohen family, which still held 45 percent of the parent company Courts Plc, began preparing to turn over the company's operations to a new generation at the turn of the century, particularly with the naming of Stephen Cohen to take over as managing director of the company's U.K. division in 2000. The company also began making plans to expand into a new market, that of South Africa, forming a joint venture with the Profurn Group, while also targeting entry into Madagascar. Courts Plc had successfully negotiated more than 150 years of history and had built its network into one of the most international of furniture retailers.

Principal Subsidiaries: Courts (Antigua and Barbuda) Ltd.; Courts (Barbados) Ltd.; Courts (Belize) Ltd.; Courts (Dominica) Ltd.; Courts (Fiji) Ltd.; Homecentres (Fiji) Ltd.; Courts (Grenada) Ltd.; Courts (Guyana) Inc.; Courts (Ireland) Ltd.; Courts (Jamaica) Ltd.; Courts Mammoth (Berhad, Malaysia); Courts (Mauritius) Ltd.; Courts (PNG) Ltd. (Papua New Guinea); Courts (St. Kitts-Nevis) Ltd.; Courts (St. Lucia) Ltd.; Courts (St. Vincent) Ltd.; Courts (Singapore) Ltd.; Courts (Trinidad) Ltd.; Courts (UK) Ltd.; Courts Worldwide Purchases Ltd.; Canterbury Investments Ltd. (Bermuda); Courts (Overseas) Ltd.; CFGB Ltd.

Principal Competitors: Dixons Group plc; Harrods Plc; House of Frazier Plc; James Beattie Plc; Marks & Spencer Plc; MFI Furniture Plc.

Chronology

• Key Dates:
• 1850: Courts furniture opens in Canterbury, England.
• 1860: William Henry Court inherits the store and opens workshops to begin producing his own furniture.
• 1932: Percy Court takes over operation of the Courts store.
• 1933: The company is incorporated as Courts Ltd.
• 1942: Courts store takes a direct hit during German bombing raids.
• 1946: Percy Court sells the store to the Cohen family, who begin expansion of the company.
• 1950: Courts opens sixth store.
• 1959: Courts goes public on London Stock Exchange, opens its first store in Jamaica.
• 1965: The company opens a store in Barbados, which becomes first store to feature diversified home furnishings product mix.
• 1969: The company floats Jamaican subsidiary on the local stock exchange.
• 1971: The first Courts store opens in Singapore.
• 1978: The company's Barbados store goes public on the local stock exchange.
• 1985: Courts launches the Mammoth superstore concept, opens first Courts Mammouth (the variant spelling designed to appeal to a French-speaking clientele) store in Mauritius.
• 1987: The company enters Malaysia with Courts Mammoth superstore concept.
• 1990: The company lists Courts Mauritius store on the local stock exchange.
• 1992: Courts Singapore store goes public on local stock exchange.
• 1996: Courts opens its first store in Dublin, Ireland.
• 2001: Courts Malaysia goes public on the Malaysia stock market; the company also pulls out of Ireland and forms joint venture to enter South African market.