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INTRODUCTION AND BRIEF HISTORY
The 1980s saw many changes in the British retail sector and a significant, if not major, player was the Scottish-based company of Goldberg & Sons (AGS). This case study attempts to draw out the salient factors at work through the late 1970s and 1980s that saw AGS initially succeed, but finally fail.
By the mid-1980s AGS was one of only three Scottish-based retailers still quoted on the Stock Exchange. Founded in 1908, it was a quoted company from 1938 and had always had a member of the Goldberg family at its head. The Goldberg story has the hallmark of many fashion companies--founded by a Lithuanian Jew, buying bales of cloth and making it up into piece-goods for sale to wholesalers, through to the creation of a 135-store nationwide fashion business by the mid-1980s.
The founder of the company, Abraham Goldberg, was Chairman from 1908 to 1934 when he handed power to his two sons, Ephraim and Michael. Together they brougt the company to the stock market and saw the development of the business from the one department store in Glasgow to the building by in-house contractors, of the Edinburgh department store and the beginnings of a small department store chain in central Scotland. From 1970 to 1974 stores were opened in Falkirk, Ayr, Paisley, Kirkcaldy, Motherwell, Dundee, Kilmarnock, Airdrie, Dunfermline, East Kilbride and Greenock, with an average sales floor space of 7,500 sq. ft. These sold a range of family fashions, household goods and electrical items. They were scaled-down versions of the main Glasgow department store.
From 1974 onwards Mark Goldberg, grandson of Abraham, took the position of Chairman. At that time AGS was the only Scottish public company with a woman director. In the mid-1970s AGS became the first retailer in Europe to introduce a comprehensive electronic point of sale (EPoS) system (an IBM system that was in place until 1987). Until that time all sales transactions were recorded in day-books, an operation which involved having 500 bookkeepers. Not only was the process costly in terms of people employed, it also created large queues in the stores. But the company took its time in choosing its new system.
EPOS: AN INNOVATION
A visit to the USA by some of the...