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3 Things You Should Know About Courts Asia

courts logoMany of us know the name Courts, Courts Asia (SGX: RE2) as an electronics retailer where you can buy a laptop or the odd printer cartridge. But this couldn’t be more different from its roots – which date back 133 years to England when Queen Victoria was still on the throne.

Quality Furniture

The first Courts store was opened in 1850, a one-man “tinker’s shop” making and repairing kettles and pans in the shadows of Canterbury Cathedral.

When William Henry Court inherited the store in 1860, he started making and selling his own furniture – which being of good quality proved popular. Court opened a number of workshops in order to meet the demand and customers came from far and wide to buy Courts’ quality furniture.

The Canterbury Tales

Business was good, but despite the demand, Courts stayed a single-store operation until William’s son Percy took over in the 1930s.

Percy expanded the store, adding garden displays to the furniture displays. He shrewdly capitalised on Canterbury’s fame in Geoffrey Chaucer’s classic “The Canterbury Tales”, adding Chaucer to the shop’s logo and encouraging customers to make a “happy pilgrimage” to the store. He proceeded to register the shop as a limited company in 1933.

British & Colonial Stores Group

After the war in 1946, Percy Court sold his family’s furniture shop to the Cohen brothers – Albert, Edwin and Henry, whose family had built up the British & Colonial Stores Group – one of the world’s largest furniture chains. The company had furniture stores in England, Wales, Scotland, Ireland and Canada, chiefly under the brand name Cavendish & Woodhouse.

Credit

Wishing to capitalise on Courts’ reputation for excellent quality, the brothers sought to expand and by 1949, had added five stores. But times were hard for many in post-war England. In an effort to help cash-strapped customers buy its goods, Courts began offering credit.

During the 1950s Courts was listed on the London Stock Exchange and continued to expand, adding two or three stores each year and by 1959 had 35 stores including Cardiff – its first shop in Wales.

The Caribbean

The Cohen brothers now had their sights set overseas and in 1959, opened the first Courts store in Kingston, Jamaica. However, instead of exporting their own English-made furniture, Courts chose only to bring its name and expertise. All furniture sold in its Jamaican store was to be obtained from the markets there and nearly all employees were to be locals.

The Kingston store proved a huge success and Courts quickly opened a second in Mandeville.

Big fish in a small pond…

Courts continued its overseas expansion, interestingly choosing smaller markets, which had roots in the British colonial era, allowing the company to gain market dominance.

Sewing machines and bicycles

Courts’ first store in Barbados proved to be something different. As the island had limited expansion opportunities due to its size, Courts chose to expand its offerings instead – and introduced home appliances and household equipment such as sewing machines and even bicycles to its store. This mix of products proved a hit and quickly became adopted by all Courts’ foreign stores.

Singapore and Malaysia

In 1971, Courts turned to the Asian Pacific and opened its first Singapore store in 1974, selling furniture and later electrical products. The first Courts store in Johor Malaysia opened in 1987.

It was the best of times…

During its peak in the 1980s, Courts had 100 stores in England and Wales and 350 worldwide. It began to diversify, selling home appliances and electronics as well as its mass-produced furniture. The company adopted a “pile ‘em high, sell ‘em cheap” strategy and opened new “superstores” large, Courts Mammoth stores on the outskirts of town with larger floor space to appeal to more customers.

In the meantime sales in Asia and the Caribbean were flourishing and in 1992, Courts Singapore became a public company, listed on the Singapore Stock Exchange with Courts Malaysia listed on Bursa Malaysia in 2000. But did you know…

  1. In 1942, the Courts store suffered a direct hit during a German bombing raid, almost destroying it.
  2. Despite selling his shop, Percy Court stayed on as a director and was responsible for store displays until his death.
  3. Courts is still one of the largest furniture retailers in Jamaica and is an official partner of the Caribbean Premier      League (CPL).

It was the worst of times…  

However, by the end of 2001, Courts Plc. was suffering. Poor sales in Ireland forced it to close all stores there and profits were dismal in the UK. Sales in South East Asia and the Caribbean on the other hand continued to do well.

Restructure  

The company looked to restructure to save costs and rejuvenate the brand, which whilst originally known for high quality furniture now sold mass-produced pieces in “tatty” stores that were leagues behind its rivals.

What’s more, Courts’ habit of giving its overseas customers credit through agreements with the UK company meant that the strength of the pound against the dollar had a strong impact on profits.

Sadly, customers were disappearing in droves and sales continued to fall. After numerous profit warnings the banks finally withdrew their support in 2004 and Courts Plc. was placed into receivership, leaving thousands of angry customers without the furniture they’d ordered or the deposits they’d placed.

A sad demise for the little Canterbury shop for whose high quality furniture customers would happily travel miles.

But what happened to its stores on foreign shores?

Courts’ Caribbean stores are currently thriving, after Regal Forest Holdings Limited assumed ownership in 2006.

Courts Asia

As for its Asian stores – here too lies a happier tale. Courts Singapore and Malaysia were taken over and restructured by subsidiaries of the Asia Retail Group (ARG) between 2007 and 2009.

Now known as Courts Asia Limited (CAL) the company is firmly established as a retailer of electrical and IT products as well as furniture with 70 stores throughout Singapore and Malaysia.

What’s more the company is continuing to expand and recently announced that it has started construction on its Indonesian “Big-Box” Megastore in the east of Jakarta – its biggest store yet.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Alison Hunt doesn’t own shares in any companies mentioned.