John Bloom - Biography

John Bloom (born 1931) is an English entrepreneur, known for his success and failure at the Rolls Razor company in selling washing machines in the early 1960s. Blooms motto was: It's no sin to make a profit .

Early life and education

Bloom was born to orthodox Jewish parents in London's East End. Bloom's father, Sam, was born in Poland and a tailor. His mother was of Sephardic background. He attended Hackney Downs School which he left aged 16.

RAF

He then tried a number of jobs before National Service in the Royal Air Force. Bloom was initially posted to No.3 Radio School at RAF Compton Bassett near Calne, Wiltshire for training as a signalman.[1] It was there that he started his first enterprise. He noticed that a local coach company, Cards Coaches of Devizes, provided coaches to the RAF under contract. On Saturday afternoons these took airmen from the base to London on 36 hour passes. With a friend who ran a coach company in Stoke Newington, Bloom undercut Cards Coaches by half. Cards took Bloom to court but the judge sided with Bloom who declared that It's no sin to make a profit , which later became his motto.[2] Bloom was later posted to Bletchley Park and then Bush House in the Aldwych, London, on the grounds that his mother was unwell; she died some years later from a form of Multiple Sclerosis.

Washing machines

After the RAF, he initially worked as a salesman for a company selling Dutch-made washing-machines door-to-door. After a while, he decided to start his own company and tried to buy machines from Holland. With little money or credit this was difficult, but eventually he made a deal with a factory in Utrecht. He advertised them under the name "Electromatic". They were twin-tub machines with a washer and separate spin-drier, priced at 39 guineas (equivalent to £40.90). This was about half the price of shop-bought machines.[2]

In 1958 Bloom placed an advert in the Daily Mirror offering home washing-machine demonstrations. This generated 7,000 responses via postal coupons. Bloom's unorthodox marketing, direct sales to the public and low prices quickly gave him 10% of the market taken from the main manufacturers Hoover and Hotpoint. He was soon selling 500 machines a week, financed largely through affordable hire purchase agreements.

Bloom then realised that he could cut overheads by manufacturing in Britain. He did a deal with the then moribund Rolls Razor Company to make 25,000 twin-tub washing machines. He later merged the two companies, becoming Managing Director with a majority of the shares.[2]

In early 1962 he formed an alliance with the Colston company, expanding into dishwashers. In 1963 took over sales of the Prestcold Refrigerator business and immediately cut prices to half of those sold by retail outlets. This was followed by rental TVs and trading stamps.

He then moved into holidays with an exclusive deal to market Bulgaria in the UK. He sold a two-week all-in holiday at £59, once again cutting out retailers. The Bulgarian Black Sea coast was warm and sunny and littered with modern functional hotels. Bulgaria was a communist country and part of the Soviet bloc. It needed western currency and was prepared to sell Bloom cheap hotel accommodation and food in return. Later, after the washing machine collapse, the Royal Arsenal Co-operative Society formed Balkan Holiday with the Bulgarian state-owned tourist organization.

The company was listed on the London Stock Exchange in mid-1962 at $3.50 and double later that year. By the end of 1963 Rolls-Colston was selling over 200,000 machines a year.[3] However it was running out of people to buy the machines.

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Bloom's business had expanded rapidly, relying on the most aggressive marketing campaign of his time. In 1963 Bloom was the UK's largest press advertiser and a household name in the early 1960s.

Bloom appeared a debate on BBC's That Was The Week That Was in November 1963 with Bernard Levin. The Sunday Telegraph had reported on the debate that Bloom had been the victor and it was the first time Bernard Levin had lost a debate. Bloom had come across as the housewife's friend; a pal of working men; the scourge of the City and enemy of the Establishment and Resale price maintenance. Bloom was symbol of free enterprise. The listing of Rolls Razor on the Stock Exchange made Bloom a millionaire with a Rolls Royce Phantom, a Park Lane apartment, a French Riviera villa, and a 376-ton 150 foot motor yacht Ariane bought for $1 million.[3]

But the retailers and UK manufacturers were unhappy with Bloom's direct sales methods of cutting out the retailer and his two-for-one schemes giving a free refrigerator when you bought a washing machine. They didn't like his efforts to abolish Resale Price Maintenance. They reduced their prices considerably to create a "Washing Machine War". Bloom was forced to increase advertising costs just as sales began to fall. He was then hit by an 11-week postal strike in 1964, which prevented coupon returns. Moreover, receipts from Rolls's customers hire-purchase agreements had been underwritten by banker Sir Isaac Wolfson, who by mid-1964 Wolfson was funding Bloom with a $28 million loan. Spotting trouble, Wolfson withdrew support. The company's shares were suspended at $0.15 in mid-July 1964 it was placed into voluntary liquidation.[3]

The Economist said at the time: As the wreckage is exposed it is easy to forget what a lasting impression Mr.Bloom made on the retailing of household durables in this country. Before his arrival manufacturers tried to sell at the highest possible prices the appliances they found it most convenient to make, competing mainly on advertising claims of better performance and new technical tricks. Over a time the consumer gets more performance for his money, at each conventional price level, but what he did not get was a chance to buy a given grade of machine cheaper. Now five years the customer is king of price as well as design.

The Financial Times wrote: If the British economy is not sufficiently competitive, if established industry is too solidly wedded to price maintenance, we need more John Blooms not fewer of them.

In a letter to The Times Ralph Harris, Director of the Institute of Economic Affairs wrote: Mr. Bloom has already done more for economic growth in Britain than many of its verbal champions in the NEDC and elsewhere.

Personal life

He married Anne in 1961 and they had two children. Bloom was well known for his social connections with celebrities and politicians. David Bowie credits Bloom as being central to his first record deal, when the then-unknown singer was invited to play at a party in Bloom's Park Lane flat and introduced to an agent. Bloom was the first commercial sponsor in May 1963 of the Royal Windsor Horse Show, and on 18 March 1964 in the House of Lords Lord Balfour of Inchrne called then Prime Minister Harold Wilson: A real super salesman; the John Bloom of political life.

Later career

After his business problems, little was heard of Bloom for some time. He remained married to Anne. He published a book, It's no sin to make a profit, in 1971.[4] In 1972 Bloom started a medieval themed restaurant in Los Angeles called 1520 AD which ceased operations later that decade. Bloom then moved to Mallorca where he later opened a Piano Bar which he eventually sold to his partners. Since then he has been involved as a consultant for multi-national companies, and in corporate hospitality and sponsorship.

References

1. "Life & Times of Donald Charles Williams". Donald Charles Williams. Retrieved 2008-04-12.
2. "Bloom at the Top". Time Magazine. 13 October 1961. Retrieved 2008-04-12.
3. "Trouble in Never-Never Land". Time Magazine. 24 July 1964. Retrieved 2008-04-12.
4. John Bloom, It's no sin to make a profit, London: W H Allen 1971 ISBN 0-491-00076-6