A Pocketful of Holes and Dreams (26 page)

In order to keep up with demand, I invested every penny we had in Tickled Pink, and we still ended up having to borrow large amounts of money from the bank. The more accounts we opened, the more stock we had to carry. We now dealt with factories all over the world, and I found myself travelling to Hong Kong, Thailand and China at least once a month.

We no longer needed the cash-and-carry business, as all our work was forward orders. And with the volume and size of our clients, we soon outgrew the Manchester showroom. We rented larger premises in Runcorn, a brand-new 40,000-square-foot warehouse, and based all our operations there.

We were now supplying over six hundred independent shops throughout the UK and parts of Europe, and had customers which included most of the high-street big names, such as House of Fraser, John Lewis, Selfridges, Dickens & Jones and Harrods. It had only taken us two years to win the top accounts in Europe.

I now employed thirty-eight staff in total, with another seventeen sales representatives out on the road showing our latest collections. The children’s range had expanded into boyswear for two- to ten-year-olds too. As young boys would not want to be seen in the Tickled Pink brand name, we kept the initials and registered Tom Pepper, which had a more boyish feel to it.

We also had to protect these two prestigious brands, selling them only to the exclusive top-end department stores and upmarket boutiques. I therefore insisted that the larger, price-conscious department stores such as C&A Modes would only be allowed to stock the styles under our Girls Talk and Kids Talk labels – which they did, successfully, the biggest single order being half a million pounds. We now had four in-house labels all under one umbrella. My job now was to control the production in twenty factories all over the world.

23. Two Wrongs Don’t Make a Right

I was riding on the crest of a wave by the time we entered 1992. Tickled Pink was heading for its best season ever, with £2 million worth of forward orders on its books, and all four brands were performing well on the high street. I was proud of what we had achieved – and all in two and a half years. My long-term plan was to build up to £5 million worth of forward orders per annum before selling Tickled Pink to the highest bidder.

We had spent eight months in lengthy negotiations with a large manufacturing company who had offered me a £3 million buyout over three years. This sum was based upon my forward orders and, more importantly, my contacts book, a valuable list of customers that would expand any company’s penetration into the retail market. We were three days away from completing the deal when the news hit the press that the chairman of the company concerned had been arrested for embezzlement. Of course, the deal fell through.

As if that wasn’t bad enough, weeks later, something even more catastrophic occurred: the recession hit the high street. I well and truly found myself in the wrong place at the wrong time. Consumers stopped spending. Fashion, often regarded as a luxury, was one of the first areas to be hit, and hit hard. The speed of the knock-on effect was frightening. Our big department-store buyers were having their budgets cut in half, forcing them to reduce their orders by half. The six hundred small independent shops we were supplying were cancelling orders left, right and centre. It was a nightmare. By now I was working on orders six months in advance, and I was heavily committed to factories all over the world. They in turn had large quantities of garments in production, and there was no way of stopping them.

While I was putting out fires on one side, the bank decided to light more fires on the other, demanding that I reduce my overdraft limit of £570,000. Typical! Just when I desperately needed the overdraft, they wanted to take it away. It was like being given an umbrella when the sun was shining, then having it snatched off you at the first sign of rain.

As the recession worsened, many of the small independent shops we were supplying were seriously struggling to stay in business; almost one a week was closing down. The bank kept increasing the pressure, and I was left with no alternative than to put my shops on the market. The timing could not have been worse, as property prices were starting to fall, to the lowest they had been for many years. My only consolation was that all my shops were in prime locations.

First to go was the Chester shop, then Kids Talk in Liverpool, and finally Girls Talk on Church Street. That hurt the most, as it had always been my favourite and had been a part of our lives for so long. Both Gina and I felt as if we were losing an old friend. In total, we managed to raise £200,000, which enabled us to reduce our overdraft limit, leaving us with £370,000 to trade with.

The loss of our retail business was hard to take, but I was convinced that Tickled Pink was the way forward. I was optimistic about the future with the brands we had created and the accounts we had opened; all we had to do was ride the storm. We kept on going, constantly tightening our belts, and hoped the recession would soon come to an end and I could find a new manufacturer to buy us out for the £3 million we’d been offered.

By the middle of 1992, we were still doing reasonably well, and were on target to make a profit, albeit a small one. However, it was still a profit and I was quite pleased we had managed to survive when so many of our competitors had gone out of business. Then, once again, disaster struck. Black Wednesday! Like a hurricane flattening everything in its path, this was a day of untold devastation and ruin.

On 16 September 1992, the European Exchange Rate Mechanism fell apart, with a catastrophic effect on the pound. In a bid to prop it up, the government announced that interest rates were going to rise to 15 per cent. The banks got into a blind panic, pulling the plugs on any small business they could get their hands on: I knew mine was not going to escape.

A few days later, I received an extraordinary phone call from my bank manager. He didn’t sound his usual polite self. ‘I want you in my office at ten o’clock tomorrow morning,’ he demanded. I was thrown by his abrupt manner, and hung up. The following day, I received a letter from him apologizing for his tone the day before. He asked me to be ‘kind enough’ to make an appointment to see him as soon as possible. Accordingly, I arranged to meet him at two the following afternoon, but before I hung up I was told to bring the company chequebooks, which made me feel uneasy.

The next day, I arrived on time and was escorted to his office.

He stood up and shook my hand, then indicated that I should sit in the chair opposite. He then got straight to the point: ‘Have you brought your chequebooks with you?’ he asked.

‘Yes,’ I replied, opening my briefcase and placing them on the desk in front of him. He reached out and slid them across the desk into a drawer. And then locked it.

‘As from today,’ he informed me, ‘we are no longer prepared to finance your business.’

I was shocked. ‘You can’t be serious!’ I said. ‘You have enough security to cover my loan.’

‘Not any more,’ he replied. ‘Property prices have halved since we last agreed your facility. I’m sorry, Jeff. My instructions are from head office.’

‘Please,’ I said. ‘You can’t do this to me.’ Reaching into my briefcase, I pulled out my paying-in book. ‘Look. On Monday I paid in £30,000.’ I was desperately trying to reason with him, thinking that he would see sense. ‘We have half a million pounds still owing to us,’ I continued.

Before I could finish, he interrupted me. ‘Yes, and we believe you won’t realize more than a third of it in the current economic climate.’

‘I won’t receive a penny of it if you won’t let me keep trading. What about the stock we own in the warehouse? It must be worth at least £150,000, and I only owe you just over £370,000!’ I was begging as if for my life.

‘I’m sorry. It’s out of my hands.’ He wasn’t interested.

‘Well then, what do you suggest that I do with no chequebook? I have staff wages to pay!’

‘I suggest you go into voluntary liquidation,’ was his unfeeling reply.

‘Why on earth would I want to do that?’ I demanded. ‘After sixteen years of breaking my back to build up a business from nothing?’ I was beginning to shout with frustration.

Getting to his feet, he walked to the door and opened it. Looking at me, he said, ‘There is no more that I can say or do in this matter. Goodbye.’

I don’t remember walking out of there, but I do remember being violently sick in the car park as the reality of it all hit me.

And after the vomiting came tears. How on earth was I going to tell Gina? And what about my staff? Some of them had been with me for years. My mind was in turmoil, trying to come up with answers. Sitting in the car, I was desperately searching for a way out of this mess; I had been in tight spots before and had overcome them. But this time it was no good; this was far, far worse. The more I thought about it, the more I realized that there was no way out. I felt like I was caught on the back of some horrendous monster that was carrying me away, with no means of controlling it and no way of getting off.

On my way back to the office, I rang Jaguar House and asked how much my Jag was worth.

‘£16,000 is the best I can do,’ I was told. I had paid £34,000 just two years before. Talk about adding insult to injury! Left with no alternative, I instructed him to bring the money in cash to my office the following morning.

That night, I sat down with Gina and explained everything. We talked into the early hours, and I told her I felt I had failed her and had let her down badly. She tried to comfort me by saying that it wasn’t my fault. But it didn’t make me feel any better.

The next day, I gave each member of our staff £500 from the sale of my car and told them that Tickled Pink was over. There were lots of tears shed that day, including mine and Gina’s, as our staff had been so special. The atmosphere had always been fantastic. Everyone had loved working there. For it to have ended in such a cold-hearted way left us all feeling devastated.

Karen Foster stayed with us, and it was up to the three of us to try to raise as much money as we could for the £150,000 worth of stock that had been paid for and was now sitting in boxes in the warehouse, and to recover as much of the half a million pounds still owing to us as we could as quickly as possible. The bank held a charge over our house as security against my overdraft facility, so if we didn’t get the money back, it wouldn’t be long before they forced us to sell our home, the only property we now had.

After three weeks of doing everything we possibly could, we managed to raise £40,000 for our remaining stock. That was it. The huge loss in value was due to the fact that it was now a buyers’ market and the major fashion clearance companies could offer peanuts for it. Collecting the money still owed to us was just as difficult. I spent day after day driving Gina’s car all over the country, personally calling on all our customers and demanding payment. Getting blood out of a stone would have been easier, for the recession had also hit them hard and they were struggling to survive themselves.

One look at their shops told me all I needed to know: I had little or no chance of walking away with the money I was due, whether it was £2,000 or £10,000. By the time I had finished debt-collecting, I had managed to claw back £100,000. We had to kiss the rest of it goodbye. We paid the £140,000 we had raised into the bank, but were still short by £230,000. And now the bank was charging me £1,000 a week interest on my remaining overdraft facility, making themselves an additional £52,000 a year! I begged them on numerous occasions to freeze the interest on the outstanding loan on the grounds that I no longer had a business and had already paid them some £300,000 in interest and bank charges alone over the past four years, but they refused to listen or to help. Instead, they demanded that I sell my house to pay off the balance of the debt.

A few years earlier, our house had been worth half a million pounds. But with the fall in property prices, I would be lucky if I raised enough to clear my outstanding debt to the bank. The ‘For Sale’ board went up outside Abbots Walk, and I had to put my beloved Tickled Pink into voluntary liquidation. When I contacted an accountancy firm in Liverpool to arrange an appointment, I was advised by the gentleman I spoke to that it would cost me £4,000, and it had to be paid in cash on the day of the meeting. More money to pay out! With more problems than pennies, I had to borrow the cash from my old friend and former driver, George Haynes.

As we walked into the accountancy firm’s offices on the day of our appointment, something was annoying me. I wasn’t at all happy with their payment terms. So before our meeting I quickly removed £1,000 in notes from my briefcase, rolled it into a small bundle and shoved it into my coat pocket. Gina wanted to know what I was doing, but I just gave her a wink and opened the office door for her.

Our liquidators’ greeting was very direct. ‘Good morning, Mr Pearce. Have you brought the £4,000, as requested, to start this process?’

‘I’m sorry, but I’ve only been able to raise £3,000,’ I explained, placing three £1,000 bundles on his desk in front of him.

‘OK, that’s fine,’ he said, and locked it in a drawer in his desk. He turned to us both, offering us a seat. ‘Let’s get on with it, shall we?’ He asked me half a dozen or so questions then got to his feet. ‘Mr and Mrs Pearce, I suggest that the two of you go and have a long lunch somewhere nice and come back in about three hours, by which time I will have gone through all your accounts and will have a much better idea how to proceed.’

As Gina and I walked out of the building we were greeted by a blast of cold air. It was a crisp autumn’s day so we decided to head down to the Pier Head on the River Mersey to get some fresh air. The last thing we wanted at that point was a long lunch. Neither of us had eaten a decent meal since the whole nightmare had begun, some four weeks earlier. We both felt sick to the stomach, literally nauseated by what had happened to our lives. Everything had been turned upside down, and we felt a huge sense of loss, as if a loved one had died. For fifteen years we had grown our business bit by bit, nurturing it from a small market stall worth a couple of hundred pounds to a company turning over millions. Holding hands, we killed time in silence, an unnatural feeling of quiet between us, tinged with apprehension as to what was coming next.