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SarahBell

Ethical Shop Fails - Rent To Own Type Shop

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http://www.oldham-chronicle.co.uk/news-features/8/news-headlines/95021/troubled-lowcost-store-closes

OUR House, the country’s first weekly payment store run by a social business, has closed after only four months following the operators’ descent into administration.

The shop, in Tommyfield Market Hall, opened in June selling furniture, appliances and branded electrical goods.

Operators Homemaker Solutions - a subsidiary of the FRC Group - was working in partnership with Oldham Council but has suffered financial trouble. Existing customer agreements won’t be affected..

Carolyn Wilkins, chief executive of Oldham Council, expressed her disappointment: “We’re extremely disappointed with the news. Our House offered a fairer, more ethical alternative to high interest stores and payday lenders. We are working with the administrators to find out how we can best support Our House’s customers and staff.”

Our House opened as an alternative to loan sharks and payday lenders. Weekly prices were up to 50 per cent lower than other high street rent-to-own stores.

The closure of Our House doesn’t affect FRC’s other local businesses - Furniture Resource Centre, Buckingham Interiors and Bulky Bob’s.

--
Bulky Bob's is who manages the bulk household waste. £15 to take 3 items away which they can try to recycle by selling.

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Hmmm. It's not entirely clear, but smells of trying to undercut the market.

Works if you can be radically more efficient. Could work on a micro scale if you work for free. Could work if you have a big sugar-daddy. Or a proper gangster organisation to cripple the competition (c.f. charity shops vs those encumbered by business rates).

But you don't undercut a highly competitive market just by being more naïve. Not even if you wrap up that naïvity in pious words about the villainy of the market.

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My guess is that the margins on selling such goods are very slim & the bigger name weekly payment stores have to charge silly interest to make their business models viable. Wonder if anyone could shed any light on the sort of margins retailers make on the goods themselves?

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Quite funny, sounds like a lot of charities / ethical businesses. 1st goal, pay well. 2nd goal, make employees feel good about themselves and give them a chance to boast about what a worthwhile job they are doing. 3rd goal, actually try to carry out the aims of the charity / ethical business (may be harder than thought, due to goals 1 & 2!)

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Quite funny, sounds like a lot of charities / ethical businesses. 1st goal, pay well. 2nd goal, make employees feel good about themselves and give them a chance to boast about what a worthwhile job they are doing. 3rd goal, actually try to carry out the aims of the charity / ethical business (may be harder than thought, due to goals 1 & 2!)

You missed out the initial prerequisite. Make sure you know nothing and understand absolutely nothing about basic finance or maths. You just need to believe in your socially justicious warriorness enough, and it will all work

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how strange

the set up is skint 4 months after opening this shop

yet the company in question managed to pay £101k wages to just 2 staff members in its last accounts

The accounts were signed off on 4 Sep 2015!

https://beta.companieshouse.gov.uk/company/08735058/filing-history

Please feel free to post that gem on the oldham chron comments! See if it gets included!

That's APPALLING. It's only been open 4 months.

Can the local govt ombudsman investigate how the council's money has been spent?

Edited by SarahBell

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Please feel free to post that gem on the oldham chron comments! See if it gets included!

That's APPALLING. It's only been open 4 months.

Can the local govt ombudsman investigate how the council's money has been spent?

Might be less outrageous than it looks. How long were the people in question working on it before it opened?

And if the figure is just an overall bill for employing people, bear in mind that half of it goes in tax. Though it still seems rather a lot if it really was just two ...

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The bill is for an 18 month period - the year end was extended

Section 7 of the accounts reads

Analysis of Staff costs

wages & salaries £101,888

social security costs £5,343

pension costs £1,702

No employee had emoluments (excluding pension contributions) of more than £60,000 in the 18 month period

The average number of employees analysed by function, was:

Our House 2

The council made a grant of £25k - not the end of the world.

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