This concise history of Hillards Supermarket is based on interviews with Mr Peter Hartley conducted in 2016 and 2017.
The Beginning
Hillards was founded by John Wesley Hillard, born of Shepton Beauchamp, Somerset in 1859, son of a skin hide merchant. John Wesley was an apprentice of the tea trade, who upon finishing the apprenticeship went to Paris where he managed a grocery store. After a year in Paris he travelled to Tralee, in Southern Ireland, where he managed three grocery stores. In 1885, it is said that he borrowed the sum of £60 (the equivalent of £6900 in 2017) and bought a store in Cleckheaton in the West Riding of Yorkshire. A store in which a number of previous attempts to establish businesses had failed, John Wesley was “given six months”. John Wesley however did not fail and within a few years he had six stores, and went on opening stores in the surrounding area.
The stores were usually end of terrace houses, where the front living room and been turned into a little shop of roughly 150 to 200 square feet, a common practice at the time. By the time of his death in 1935 John Wesley had built up a chain of almost seventy small stores, all within 15 miles of Cleckheaton. He also acquired a chain of 15 stores, called Jubbs Grocers, in Huddersfield. John Wesley named is shops Lion Stores, as the original shop in Cleckheaton was in Albion chambers, and on top of the building was a stone Lion.
Early 20th Century Change of Management
Following the death of John Wesley Hillard the business was carried on by Percy Hartley (father of Peter Hartley), who had joined the company in 1908 having trained and worked as an accountant. Percy Hartley married one of John Wesley Hillards four children in 1913, and worked as an accountant in the company until John Wesley’s death in 1935, where upon he took over management. John Wesley’s sons, Charles and Jack Hillard, had worked in the company, however John was very much in control and they had had only limited input into its running. Soon after their father died they retired from the company.
Charles emigrated to Australia with his Partner and wrote his letter of resignation as a company director on board the ship. However, on arriving in Australia they discovered the climate not to their liking and returned on the same ship. On his return Charles was re-appointed as a director, and remained so until the company was publicly floated in 1972, but took little part in the running of the company. Jack Hillard had no involvement in the running of the company, but was a major shareholder.
Percy Hartley ran the company from 1935 until he was forced to retire due to ill health in 1951. Following his retirement the company continued for a time without a clear management structure, comprising David Hartley (one of Percy’s sons who joined the company in 1947 from the RAF) and two assistants.
Post War Management Difficulties
Peter Hartley joined the company in 1955 after spending time gaining experience outside of Hillards in Allied Stores and Express Dairies (which also had a supermarket chain called Premier Supermarkets in London).
Peter’s period outside of the company allowed him to gain first hand experience of how other companies conducted business. On returning to Hillards Peter was keen to implement some of what he had learnt. As if often the case when one party sees the need for change this caused some friction within the company (particularly between the Hartley brothers). In the early 1960’s the then Chairman (an accountant from Leeds) brought in a group of management consultants, ostensibly to recommend a stock control system, but really to make a recommendation about management and resolve the situation about control of the company.
The consultants recommended that the company initially look outside of the company to find a managing director, with a view to Peter Hartley taking over the role after gaining a few years of additional experience. This plan was partly implemented with the appointment of John Jolliff as managing director from inside the company in around 1962-3. John Jolliff continued in the role of managing director until he unfortunately died, around 1970. A period of time where he had to manage the disagreements between the brothers Peter and David about the direction of the company.
After John Jolliff’s death the then Chairman Gordon Hunter decided that Peter Hartley and his brother David would become joint managing directors. Which although a pragmatic decision, was also likely to lead to further disagreement, and really highlights some of the difficulties around the succession and management of family businesses. Prior to his resignation the Hartley’s older brother also acted something of a referee between the them, a difficult position if favouritism is to be avoided. This difficult management structure persisted until David Hartley had to step back from the role of managing director in 1977 due to ill health. Selling his shares in the company and retiring to Jersey.
The company therefore had a period of around 10 years, up to about 17 years, where there was a degree of friction in the management of the company. Largely due to issues related to the succession of the control of the company by the third generation of the family. This is not an uncommon problem for family firms, which often suffer difficulties with succession around the third generation. Despite this the company was able to make significant progress, significantly expanding the number of stores and engaging in various modernisation projects (such as a move towards larger self-service supermarket stores).
Peter Hartley became sole managing director of the company in 1977, moving to company Chairman in 1983 when Gorden Hunter retired.
The Tesco Takeover
One of the most significant parts of the Hillards story was the successful hostile takeover by Tesco in 1987; a hard fought 60 day battle for the future of the regional chain.
Hillards got off to something of a difficult start as it could not enlist the support of its normal merchant bank, Kleinwort Benson, as they had recently carried out work on behalf of Tesco. Creating a conflict due to the amount of information on Tesco they had sight of. Therefore Hillards had to go looking for an unfamiliar organisation for support in defending the bid, eventually settling on Rothschild’s. Something that no doubt would have slowed down the initial phase of the defence.
What followed was, what was in many respects, a very effective defence by Hillards. Consisting of a ground campaign centred around the stores, and a more national, London focused, campaign aimed more at institutional shareholders. The more local ground campaign help raise the profile of, and support for, with the public. (Which may have fed back into local politics.) It also encouraged smaller regional shareholders not to accept the Tesco offer and sell their shares. The more national campaign was focused on encouraging institutional shareholders in the city (London) not to accept the offer, and also gather political support.
Political support proved to be of little help in the end as the takeover of Hillards by Tesco was not seen as a problem by bodies including the monopolies commission. Thus there would be no political intervention on behalf of Hillards to block the bid, preferring to leave it to the markets.
What followed was a period of fairly intensive activity by both parties. Tesco was forced to raise the price offered for Hillards twice during this time to tempt more shareholders to sell. This was ultimately successful when the Prudential, a major institutional shareholder, decided to accept the final Tesco bid (which offered a significant premium over their initial investment in Hillards). This move made a successful defence all but impossible and in the final days Hillards had no choice but to recommend people accept the final offer.
When is Failure also Success?
To say that this was ultimately a failure on behalf of the Hillards board would be an overly simplistic reading of the situation. Yes ultimately the board, and therefore the family, lost control of their company to Tesco. However, the defence campaign raised the profile of Hillards in the community and also significantly raised the Tesco offer. Delivering an excellent return for shareholders, which we should remember, is a significant aspect of the responsibility of the board of a company.