Multi-Million Rolls Razor Co. Crashes

Press, Volume CIII, Issue 30497, 20 July 1964, Page 11

Multi-Million Rolls Razor Co. Crashes

(N.Z.P.A.-Reuter —Copyright) LONDON, July 19. While associates of Mr John Bloom, the 32-year-old business tycoon whose w ashing-machine empire has dramatically crashed, awaited news today about his return to Britain, a Luton airport official said a light plane he uses was due there at 9 a.m. tomorrow.

The plane, a red and white de Havilland Dove, with “Rolls Electromatic” painted on

the fuselage left Luton airport for Stuttgart on Thursday. Earlier, there had been reports that bearded Mr Bloom, who was in Bulgaria when the decision was made on Friday to wind-up his Rolls Razor direct-sales company, would be arriving in Britain today. The Rolls Razor directors are to meet tomorrow, when they hope to issue a statement revealing plans for servicing more than 500,000 of their washing machines already sold in Britain. PERSONAL FORTUNE The affair is Britain’s most sensational commercial crash since the war. The “People” today speculated whether Mr Bloom would use his personal fortune—estimated by some financial experts at £1,000,000 or more—to save the Rolls Razor Company. It quoted Sir Charles Colston, a fellow-director of Mr Bloom as saying: “I fervently hope it is so.” The “Sunday Times” quoted a member of Mr Bloom’s staff as saying he was flying back to London “to make a fight of it.” LIQUIDATION It was announced on Friday that the washing machine company would go into voluntary liquidation. A 28-word statement by the directors of the firm reached the floor of the London Stock Exchange only

nine minutes before share dealings stopped for the week. It caused “one of the wildest stampedes the market has seen in years.” PRICES TUMBLE

Two million was cut from the firm’s market value as Rolls Razor shares were slashed from 8s 6d to Is l}d. At one time last year, the shares were 47s lOd. City financiers calculated the new value of the firm’s shares as £321,000, and some dealers estimated that shareholders —many of them small investors who had used their savings—would collect about 3d a share when the firm’s assets had been sold. The Rolls Razor London headquarters, at Cricklewood, with its marble and plateglass frontage, was besieged by telephone calls as shareprices tumbled. Direct Sales John Bloom, a former £l2-a-week clerk, made his millions from one idea—by-pass-ing the shops to sell washing machines direct to the household. His rise to riches began when he spent his entire capital on a third-class weekend trip to Rotterdam to buy a Dutch washing machine. Mr Bloom bought it for £29, sold it in London for £44, and he was in business, breaking in on the tightlyheld British washing machine market. Orders snowballed and soon he was employing three salesmen and operating from a one-room office in Finsbury Park, north London. He went to a hire-purchase finance company which agreed to handle any business he found.

Soon he had enough in hand to afford an advertisement in a national newspaper. In the following week, 8000 orders poured in from all over Britain. From that point, his business, in his own words, “went up like a balloon.” As each advertisement brought more orders, Mr Bloom began to • open branches in the provinces. Many Products He tried selling dish-wash-ing machines, cosmetics, heating equipment, washing powder, holidays, cameras and—earlier this year—rlaunched trading stamps which pictured his own head. Mr Bloom, a man who has enjoyed battling- against the odds and being a thorn in the flesh of traditional manufacturers, would have liked to be a director of the Arsenal Football Club. One of his greatest personal shocks was his failure to get the chairmanship of Queen’s Park Rangers in a recent paper ballot of shareholders.

Two months ago, after ' a meeting with the Duomatic

Group, he commented: "Look at me. I am reduced to my last five million or so. but you don’t see me panicking to sell out. “The Bloom organisation will be as strong as ever in a very short while.” £6 Million Loss Eight days ago. on a 8.8. C. radio discussion he said that on paper he had lost about £6 million. Asked how much he was worth, he said: "I wish I knew. According to the press I understand I have lost about five to six million pounds in the last two months. “This is largely because I have not really wanted to put up the price of our products. “Nobody has been happy about our profits and it has cost me about five million quid, but it is not the end of the world. I will get by.” John Bloom became one of Britain's youngest millionaires. Two Yachts Married, he lives with an attractive young wife in a flat in London’s fashionable Park Lane, and owns two yachts and a villa in the South of France. After Friday’s meeting by the company’s board, Mr Malcolm Cass, a director of the English and Overseas Investment Company, said Mr Bloom—who is his brother-in-law, would be "very shocked” at the decision. Mr Bloom is in Bulgaria. Mr Cass said he himself was “quite surprised” about the decision. There were problems, he said, but “did not think this was the picture.”

Mr Bloom's English and Overseas Investment Firm, in which he has about half of the shares, has a large share stake in Rolls Razor, and also owns two radio firms and a television rental business. The investment firm's shares crashed on Friday from 6s 6d to 4s, a loss in market value estimated at about £770,000.