Amalgamating department stores

Sustained by his new local authority loan stocks activity, Hatry was able to capitalise on an idea introduced to him by his solicitor, Stanley Passmore, who also served as chairman of a small provincial group of department stores. There were several hundred independent department stores who were facing difficulty. The competition of the groups of multiple stores was growing fiercer, and many stores were struggling to meet the cost of refurbishment after years of neglect during the war. Passmore, and Ronald Gaze, the managing director of his company, proposed that if department stores could be persuaded to group together, they could reduce their costs by buying stock centrally and benefit by jointly advertising extensions to the range of goods they sold. Gaze could identify stores that would be suitable candidates to join a new combine and could lead the management in realising the economies of scale. Hatry’s role was to arrange the finance and persuade the current owners to join. With Hatry’s persuasiveness, Gaze’s idea worked. Within two years, the new combine, Drapery Trust, had formed a substantial group of department stores and been copied by two other groups (Selfridge’s and United Drapery Stores). This worried the business that had previously acted as a wholesale supplier for the previously independent department stores: Debenhams. To protect its business, Debenhams made an offer to acquire Drapery Trust which was successfully accomplished in a series of transactions managed by Hatry. By 1950, the enlarged group had become one of the largest businesses in the country. In anticipation of the chance to revive his company flotation business, Clarence Hatry changed address, moving to Pinners Hall. In 1917, Hatry had assisted Passmore in the formation of a new listed company to take over the provincial department stores that previously had been owned by Marshall and Snelgrove, of which he had then become chairman. In 1926, James White persuaded Gordon Selfridge that his group should reorganise and expand along the lines chosen by Hatry. From the beginning, Ronald Gaze and Hatry must have understood that if their strategy proved successful it would become an existential threat to the wholesalers who supplied independent department stores, including one of the largest: the wholesaling business owned by Debenhams. Hatry’s role was to design the corporate structure of the new group, arrange its financing and negotiate terms with the stores to be acquired.