British Firms Hit Hard By Hire-Purchase Curbs

Press, Volume XCIX, Issue 29232, 16 June 1960, Page 13

British Firms Hit Hard By Hire-Purchase Curbs

(Rec. 11 p.m.) LONDON, June 15. The dismissal of 820 workers by Hoover, Ltd., the vacuum cleaner makers, because of falling sales, will be followed by wholesale dismissals in other companies, the “Daily Mail’’ has predicted.

Hoover, Ltd., was only one of many firms suffering from the hire-purchase restrictions imposed by the Chancellor of the Exchequer (Mr Heathcoat Amory) in April, the “Daily Mail” said. The effects had been severe, and the trade was full of rumours of other companies following the Hoover lead. The Hoover news last night had come at the end of an edgy day in the stock market. Prices fell sharply as dealers worried about reports of new and stronger restrictions on hire-purchase and bank lending. The “Daily Mail” said that the restrictions (a minimum fifth down and two years to pay) had been to cause a sharp fall in the buying of goods on hirepurchase. Shopkeepers expected price wars as they tried to shift mounting stocks of refrigerators, television sets, and other household goods. In the second-hand car market, prices had fallen sharply as dealers with too little capital found they could not afford to carry their stocks.

Hoover, Ltd., was especially affected because the restrictions were aimed specifically at cutting

down on hire-purchase in the type of goods the firm made. Hoover, Ltd., makes four-fifths of all the washing machines exported by Britain, dominates the vacuum cleaner market, and also makes steam irons, spin driers, and polishers, the “Daily Mail” said. Last year it had lifted its sales by 50 per cent., and trading profits by 75 per cent., while the dividend increased from 60 to 90 per cent. Reuter said that last night Hoover, Ltd., issued a statement that its export business was substantially better than last year, but if the home market hardened further, production costs would rise and affect the company’s competitive position on overseas markets. As a result of the news, Hoover. Ltd.'s 5s ordinary shares dropped by 30d to 46s 3d and the 5s “A" ordinary shares dropped 4s 7jd to 41s 10id said the “Financial Times.” According to the “Daily Express,” the drop wiped more than £3 million off the total stock market valuation of Hoover, Ltd. In after-hours deals, shares of companies selling similar goods dropped by Is to 2s a time.-