John Bloom: The serial business guerrilla

Walk down any high street, or browse online, and you’ll find almost every retailer offering some form of discount. So it’s hard for us today to grasp that, until the 1960s, it was common for British manufacturers to set a minimum price at which shops had to sell their goods.

These arrangements, known as resale price maintenance (RPM), were killed off by changes to British law, most notably in 1964. The businessman arguably most responsible for changing the terms of the debate was the flamboyant (and controversial) entrepreneur John Bloom.

Bloom’s first foray into breaking down restrictive practices came when he was doing his National Service with the RAF. Sent to a base in Wiltshire, Bloom realised the cost of a weekend coach trip to London was nearly equivalent to his weekly wage.

Sensing an opportunity, he partnered with an independent firm to offer a much cheaper rival service, which proved wildly popular.

After leaving the RAF, Bloom became a door-to-door salesman, selling everything from paraffin to washing machines. He hated it, but it gave him the idea of buying advanced ‘dual-tub’ combined washer-dryers cheaply from Holland.

By buying in bulk and advertising in the press to generate leads, he could sell directly to the public and so undercut the electrical shops, which were prevented from offering discounts by RPM.

With a £1,000 loan from an uncle, Bloom made a deal with a Dutch manufacturer, Klean Washing Machine Company. His first advert in September 1959 was a hit, generating 7,000 enquiries.

He also benefited from a clerical error by his shipping firm, which allowed him to reinvest in stock. When the firm realised its error, Bloom persuaded the owner Freddie Laker (who later became famous himself) to allow him to gradually pay off the £23,000 debt (£453,000 today).

Although the firm proved profitable, Bloom realised he would need more cash if he was to expand further. The problem was that “I knew next to nothing about finance”.

Taking advice from the owner of his London apartment block, Bloom took out an advertisement, looking for a public company to merge with. This led to a partnership with manufacturer Rolls Razor, which enabled Bloom to build his own machines in Britain.

Despite a £100,000 (£1.7m in today’s money) publicity campaign mounted by his rivals against his technique of direct selling, Rolls Razor sold 208,000 machines in 1963. However, Bloom’s advisers, Kleinwort Benson, pushed for further growth and, “like a fool, I believed them”, expanding production still further.

Disaster struck, in the form of an 11-week postal strike (which delayed orders), competition from established firms (which slashed prices in a ‘washing machine war’) and an increasingly saturated market.

The company went bust in July 1964, which prompted a Board of Trade investigation into Bloom (our picture of him is from around that time) and other directors.

Bloom later had a varied business career as a restaurateur, retailer and adviser to tycoon Bernie Ecclestone. He also played a key role in the pirate radio station Radio Caroline, and is currently launching his own range of cosmetics.

Merryn

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