Page last updated at 23:03 GMT, Wednesday, 7 May 2008 00:03 UK

All dressed up and nowhere to go?

By Ian Pollock
Personal finance reporter, BBC News

John Simons in his shop
John Simons has been in the business since 1955

Your clothes shop is one of a kind.

It has been going for 27 years, in a prime location in one of the most fashionable areas of central London.

But how can you sell up and retire while still ensuring the business continues in a recognisable form, ensuring your legacy lasts?

That is the challenge for the owner of the J. Simons shop in London's Covent Garden.

John Simons has been selling American men's clothes there since 1981, mainly in the Ivy League style - loafers, button-down shirts and the like.

It is not quite a retro shop; most of the clothes are new, even if some of the brands like Bass, Pendleton and BD Baggies have been going a long time.

But after more than 50 years in the clothes business, and with the lease on his shop coming up for renewal in June next year, Mr Simons fancies calling it a day.

"I've been running this business, one way or another, since I was 15 and that was in 1955," he says.

"The business would seem to be winding down to a natural ending the way things do.

"But because of the quite unique aspects of this shop and the huge following we have I'm very reluctant to let it just disappear," he adds.

The problem of succession

According to Howard Hackney, head of family business advice at the accountants Grant Thornton, Mr Simons is facing the classic dilemma - who will take over?

He should have been putting in place a plan from his late 50s onwards
Howard Hackney, Grant Thornton

"Its the biggest problem for family businesses; finding someone to take over and finding the funding to allow that takeover to take place, are common issues," he says.

Only about 10% of family businesses make it to the third generation.

And Mr Hackney thinks that Mr Simons has left it a bit late.

"The best strategy is to have started earlier than he has done," he says.

"He's looking to get out sooner rather than later and he should have been putting in place a plan from his late 50s onwards to find the right people to take over."


Mr Simons admits that he has had a rather laissez faire attitude to all this so far.

J. Simons shop
The shop relies on regular customers, not passing trade

But he points to the potential attractions for a buyer.

It is a profitable business, it has survived recessions, and it is not subject to all the vagaries of youthful fashion.

He points to a loyal customer base of 6,500 names and addresses on his mailing list.

Also, his landlord is not hostile but is friendly and accommodating, so he is not facing a cliff-edge decision next year and could in fact keep going a while longer.

"The landlords, Shaftesbury, are well known for encouraging niche and independent retailers," says local surveyor and estate agent James Collins.

"The first thing to do is approach the landlord, get a feel for what the rent is going to be, and what sort of lease they are likely to grant.

"A buyer will want the assurance of getting a new lease and what the rent is going to be," he advises.

Right place

Covent Garden is a choice location for independent clothes shops and there are lots of them there.

I would have advised him to move to one of the other Covent Garden fringe streets
Robin Calver, surveyor

Mr Simons believes that, in the right hands, a new owner could develop his specialist niche offer and open up a few new shops in places such as Paris and Rome.

Local property surveyor Robin Calver reckons that just moving a few streets away might be a good option for any new buyer.

"He could probably do with being in a slightly bigger shop," he says.

"It's quite cramped and doesn't display the stock that well.

"I would have advised him to move to one of the other Covent Garden fringe streets where he can get a retail unit at reasonable cost."

Wrong time?

Mr Simons has great faith in the attraction of his business.

In his view he is selling not just clothes but a lifestyle too.

He sees his shop as a unique cultural outpost of the post-war beat generation, for people interested in American clothes, music and style from the 1950s and 60s.

Unfortunately he may have chosen a bad time to sell.

All the talk now is of the credit crunch, a downturn in retailing and an impending recession.

"The credit squeeze applies across the board," says Howard Brecker of local estate agents Robert Irving Burns.

"The banks' criteria for lending has changed since the sub-prime crisis.

"They basically have run out of money and any new business has got to have a good track record, the people involved have got to be pretty financially sound and they have got to have a good business plan," he says.

Laurence Corner

Just a few miles away, on the Hampstead Road in Euston, North London, is evidence that being a long standing shop does not guarantee longevity.

Laurence Corner in Euston
A North London landmark for 60 years, now to become flats

Laurence Corner was probably the largest government surplus store in London, with a good reputation in a niche market.

But it closed down last year after being in business for 60 years.

It had, over the years, expanded into costume hire as well as military and camping gear.

But apparently the family of the original owner could not find a buyer.

The shop now stands semi-derelict while the site waits to be turned into flats.

A plan of action

So, what should Mr Simons do?

I'm unafraid to be uncertain
John Simons

The traditional methods for selling a business are to use business transfer agents - a sort of glorified estate agents.

Another is to get a firm of accountants to advertise the business for sale in papers such as the Daily Telegraph or the Sunday Times.

But Howard Hackney thinks John should get his own accountants to carry out an active search.

They should already be plugged into a network of potential buyers, including competitors or likeminded businesses.

"It might be that a direct approach to them, such as a similar clothes retailer, might be the best way of finding a buyer," he says.

"In the last few weeks it's become very tough, the banks are running scared of lending money, and it's having a real, knock-on effect.

"With fear of where the economy is going to go you are probably in a buyers market."

For the time being Mr Simons is still relaxed.

"I'm unafraid to be uncertain," he says.

"There's no interest yet but I want to find someone who will nurture what we've done.

"Or a business person who just likes the clothes."

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