A dynasty divided

Since 1977 the Moores family at Littlewoods has acted out a soap opera rich in discord. Now, with a takeover bid on the cards, the bad blood is flowing

WHEN I was 16 I realised just what a genius Sir John Moores, the founder of Littlewoods, had been.

Every Thursday night, for two years, I would trudge the streets of Barrow- in-Furness collecting coupons and cash for Littlewoods pools. In that time I must have collected around pounds 7,000. To my knowledge none of my "clients" won a penny.

Each Friday, I would take the entries to an office in the town centre and get paid: pounds 5.

It was a brilliant business: the responsibility for counting the money and checking the forms were filled in correctly was all mine. Littlewoods hardly had to do a thing. Costs were minimal; if you had seen that grubby office, you would know what I mean. Owning the football pools, it was obvious, was a licence to print money.

And so, over the years, it has proved. Sir John, who died in 1993 aged 97, left his family a business worth pounds 1.2bn. A money-making wheeze dreamt up in the dark days of depression in Manchester during the 1920s has spawned separate mail-order and stores divisions with combined sales of pounds 2.7bn, producing profits last year of pounds 116m.

With every share still firmly in family hands, it must be wonderful being one of the 34 Moores - almost like winning the pools, over and over again. Together, they own houses around the world and have never wanted for anything. Peter, Sir John's second son, loves opera, so he paid for Glyndebourne to stage his favourite work. According to Harpers & Queen, one of the male Moores saw a rare Porsche in a showroom window in Paris recently and bought it: at a cost of pounds 600,000.

It is not all one-way: they give something back as well. There are Moores foundations, Moores-sponsored art exhibitions and prizes, and the Sir John Moores University in Liverpool. For years, they bank-rolled the big Merseyside football clubs, Liverpool and Everton.

Yet, suddenly, it has all gone wrong. They still have their wealth, but the smile has faded. Speak to them and they seem weighed down. All that money, you realise, is no guarantee of happiness.

Barry Dale, the former chief executive, wants to buy their company. He is prepared to offer pounds 1.2bn providing, if he gets the chance to look at the books, the figures stack up.

Kohlberg Kravis Roberts, the US takeover specialist, also has Littlewoods in its sights. It was involved in early discussions with Mr Dale, but now, instead of acting for one particular client, it is thought to have its eyes on Littlewoods' potential break-up value.

Mr Dale and KKR, and anyone else who may be stalking Littlewoods, are not the problem: the Moores are under no obligation to sell, and any approaches could be dismissed as impudence.

Their difficulties go much deeper than puffed-up public relations men and corporate financiers scenting blood. They begin with the sad reality that the Moores do not get on with each other, and they end with the unpalatable truth that none of them either wants, or has exhibited the ability, to run such a large business successfully.

That terrible realisation began to sink home as long ago as 1977. If there was ever a defining moment in the recent history of Littlewoods, it was the death that year of Nigel Moores in a car crash.

Nigel, by all accounts, was a star. Popular and gregarious, Nigel, the nephew of Sir John, was a uniting influence, someone around whom the rest of the family could rally - in short, a future chairman.

By the time of Nigel's death, Sir John had long since decided none of his own children was up to the task. He only had himself to blame. Born of working-class stock, he was an ambitious, ruthless social-climber who sent his two sons to Eton and his two daughters to Cheltenham Ladies College, and then castigated them for not having his drive. A towering influence, he suffered fools and his children badly.

He was delighted when his elder daughter, Betty, married Kenneth Suenson- Taylor, later the second Baron Grantchester, and mortified when John, his eldest son and heir, came out as a socialist with more interest in good works than making money.

With John out of the picture and Peter exhibiting an artistic temperament, rather than a steady businessman's hand, Sir John turned to Nigel.

When Nigel died - ironically, after his father gave him a pounds 9m settlement to persuade him to give up his favourite past-time of motor racing - Sir John was devastated. He made two moves to steady the ship and, unwittingly, sowed the seeds of the present turmoil. Betty, who shares much of her father's ambition but not his degree of business acumen, was given a seat on the board and Peter was made chairman.

Sir John went off to well-deserved retirement. It proved short-lived, though, as Peter was a disaster. Profits plunged from pounds 49m in 1977 to pounds 11.5m in 1980. The unthinkable, bankruptcy, started to become a distinct possibility.

Aged 84, Sir John returned, booted out his son and took back the reins. The blow to family pride was crushing.

The solution, made with much regret, was to bring in outside help. In his first major appointment, though, Sir John struck lucky. Desmond Pitcher was just the right sort to knock the company back into shape. Tough and uncompromising, the new chief executive did just that, putting the brakes on costs and expanding profits. He was well rewarded: pounds 850,000 a year.

At first, the rest of the family was delighted, and fully behind Mr Pitcher. His close relationship with the old man was tolerated; Mr Pitcher, astutely, made sure Sir John was kept informed of developments through regular visits to his Formby home. When John Clement, the new chairman brought in from Unigate, showed signs of supplanting Mr Pitcher and throwing his weight around, even he was dispensed with. Mr Pitcher became both chairman and chief executive.

Soon, however, the sniping started. Mr Pitcher, it was felt by some members of the family, was too big for his boots.

John, who was happy to have the weight of responsibility lifted from his shoulders, did not agree. In the boardroom, Pitcher could always count on John's support. They represented a formidable duo: the eldest son and main heir, and the man in charge of safeguarding the family silver.

At first, Pitcher's appointments, especially those of Mr Dale, his deputy and Prodip Guha, in charge of stores, were tolerated. Together, this triumvirate of Pitcher, Dale and Guha transformed the outlook. They chose a populist, low-budget route, stressing the stores offered value for money and playing to the Littlewoods good name

That did not go down well with some members of the family who thought Littlewoods ought to be moving upmarket. They were prepared to suspend their disquiet, pending improved results.

In the late summer of last year, it all proved too much. Senior management became concerned about the conduct of one or two managers in the stores buying division. Network Security, a firm of corporate investigators was asked to look into possible frauds by executives in that department.

Few people at John Moores Centre in Liverpool knew of Network's involvement and the whole investigation was kept low-key - after all, it was a fairly ordinary event for a company the size of Littlewoods to call in corporate investigators.

What happened next, however, was far from ordinary. At a meeting of the company's audit committee, attended by some members of the family, it was suggested Network might like to launch a new inquiry, to look into one of the deals struck by Pitcher - who, by now, had retired as chairman but remained on the board - and Dale and Guha.

Network, never one to look a gift horse in the mouth, accepted and began to make inquiries of what was, on its public face, the people who until very recently had dominated the day to day operations of the company.

The trigger for the investigation was the deal struck between Littlewoods and Lorad, a Far Eastern trading company.

Network was asked to assess whether Lorad, which agreed to help Littlewoods cut out the middle man in the region, was being treated too generously. Network ceased to report to the company executives and dealt exclusively with the audit committee.

The ensuing inquiry quickly took on a sinister aspect. Last October, after not having written about Littlewoods for a while, I decided to revisit the company, and, on a trip up north, arranged to meet Mr Guha. We met for dinner in Chester where he lived. He told me very little, but he did confirm that Peter, after being rebuffed to become chairman for a second time - everyone remembered with horror, the first time - was selling out completely.

The day after the story about Peter's share sale appeared, Mr Guha was asked by the chairman, Leonard van Geest to stay behind. A photograph was produced of the two of us walking along the street in Chester and Mr Guha was instantly sacked.

That was the first intimation of what was going on at Littlewoods, that there was a total breakdown of trust between some members of the family and senior employees, that private detectives were spying on selected senior executives.

It was incredible, really. Littlewoods, the family firm that prided itself on a fresh, wholesome image on the high street and mail order catalogues, and was a national institution thanks to the pools, was moving in the murky world of spooks.

Bizarrely, though, it did not stop there. Over the ensuing months - Mr Guha was dismissed in October 1994 - it became apparent the private detectives were still operating. Pitcher, the former chairman, disovered an attempt to obtain his bank account details; Mr Dale, the chief executive also became convinced he was being targeted.

In March, this year, Mr Dale's fears proved correct. He was called to a meeting in Littlewoods head office, grilled for several hours on a whole range of issues, most of which were completely trivial, then sacked. His dismissal came after a secret meeting of John, Lady Grantchester, her son, James Suenson-Taylor and Mr van Geest held at the Savoy Hotel in London, where Lady Grantchester called for the company to be returned to family managment. She wanted Mr Dale to be dismissed and Mr Suenson- Taylor, who has no experience of running such a large group, to take his place.

A few weeks later, Pitcher, who still retained a seat on the board, resigned in disgust. Network's investigations had discovered nothing untoward but still led to the departure of the powerful trio.

While the company made noises about finding a replacment chief executive, Mr Dale, who is pursuing the company for unfair dismissal, was smarting and plotting his revenge. Two months ago, he made his move, using an intermediary to tell Mr van Geest, over lunch at the Grosvenor House Hotel in London, he was thinking of buying his company.

That offer has now been formalised in a letter from his advisers, Dawnay Day, to the board. His interest may yet lead to a counter-approach from KKR.

Meanwhile, the family is deeply divided. One group, understood to represent 30 per cent of the shares, want to sell-out completely. They have had enough of years of internal squabbles and would like to free up their money. John Moores is also understood to want to sell his shares but would like to retain some sort of association - to keep his name and that of his father, alive. Mr Suenson-Taylor, having had his candidature pushed forward by his mother, is believed to have his eye on seizing control.

A forthcoming meeting of the family - at their so-called Forum - is unlikely to resolve anything. An extraordinary general meeting where a vote will be taken to allow Mr Dale to see the books is finely balanced.

More significant, say insiders, is not these meetings, both of which are due to be held in the next few weeks, but the gathering of the clan next spring to hear this current year's financial results. They are not likely to make for pleasant reading. Profits are thought to have been hit, not least by the impact of the National Lottery on the pools.

Then, say those close to the family, may well be the moment when the decision is finally taken to sell. Until then, Mr Dale may have to wait.

In the meantime, the Moores will carry on fighting and debating, and even in these straitened times, adding to their millions.

bility lifted from his shoulders, did not agree. In the boardroom, Mr Pitcher could always count on John's support. They represented a formidable duo: the eldest son and main heir, and the man in charge of safeguarding the family silver.

At first, Mr Pitcher's appointments - especially those of Mr Dale, his deputy, and Prodip Guha, in charge of stores - were tolerated. Together, this triumvirate transformed the outlook. They chose a populist, low-budget route, stressing that the stores offered value for money and playing to Littlewoods' good name

That did not go down well with some members of the family, who thought Littlewoods ought to be moving upmarket. They were prepared to suspend their disquiet, pending improved results. But in the late summer of last year, it all proved too much. Senior management became concerned about the conduct of one or two managers in the stores buying division. Network Security, a firm of corporate investigators, was asked to look into possible frauds.

Few people knew of Network's involvement and it was kept low-key - after all, it was a fairly ordinary event for a company the size of Littlewoods to call in corporate investigators.

What happened next, however, was not ordinary. At a meeting of the company's audit committee, attended by some family members, it was suggested Network might launch a new inquiry, to look into one of the deals struck by Mr Pitcher - who, by now, had retired as chairman but remained on the board - and Mr Dale and Mr Guha. Network, never one to look a gift horse in the mouth, accepted and made inquiries of the people who until recently had dominated the day-to-day operations.

The trigger for the inquiry was a deal between Littlewoods and Lorad, a Far-Eastern trading company. Network was asked to assess whether Lorad, which agreed to help Littlewoods cut out the middle man in the region, was being treated too generously. Network ceased to report to the executives and dealt exclusively with the audit committee.

The inquiry quickly took on a sinister aspect. Last October, not having written about Littlewoods for a while, I decided to revisit the company and, on a trip up North, arranged to meet Mr Guha. We met for dinner in Chester where he lived. He told me very little.

Later on, the day after I wrote a story saying that Peter was selling his stake after being rebuffed for the chairman's post a second time, Mr Guha was asked by the chairman, Leonard van Geest, to stay behind. A photograph was produced of the two of us walking along the street in Chester. Mr Guha was instantly sacked. That was the first intimation of what was going on - that there was a total breakdown of trust between some members of the family and senior employees, that private detectives were spying on selected executives.

It was incredible. Littlewoods, the family firm that prided itself for its wholesome image on the high street, was moving in the murky world of spooks. Bizarrely, though, it did not stop there: Mr Pitcher suspected someone was trying to find out about his financial affairs; Mr Dale, the chief executive, also became convinced he was being investigated. In March this year, Mr Dale's fears proved correct. He was called to a meeting in Littlewoods' head office, grilled for several hours on a whole range of issues, most of which were trivial, and then sacked. His dismissal came after a secret meeting of senior family members and Mr van Geest at the Savoy Hotel in London, where the call was made for the company to go back to Moores management. They wanted Mr Dale to be dismissed and a young member of the family, with no experience of running such a large group, to step in.

A few weeks later, Mr Pitcher resigned.

The triumvirate had now all departed. Meanwhile, Network's investigations had discovered nothing untoward.

While the company made noises about finding a new chief executive, Mr Dale, who is pursuing the company for unfair dismissal, was plotting his revenge. Two months ago he made his move, using an intermediary to tell Mr van Geest he was thinking of buying his company.

That offer has now been formalised in a letter from his advisers to the board. His interest may yet lead to a counter-approach from KKR.

Meanwhile, the family is deeply divided. One group, fed up with the internal squabbles and thought to represent 30 per cent of the shares, wants to sell out completely. John Moores is also understood to want to sell his shares while retaining some sort of association.

A forthcoming meeting of the family is unlikely to resolve anything. An extraordinary general meeting where a vote will be taken to allow Mr Dale to see the books is finely balanced. More significant, say insiders, is not these meetings, which are due to be held in the next few weeks, but the gathering of the clan next spring to hear this year's financial results. Profits are thought to have been hit, not least by the impact of the National Lottery.

Then, say those close to the family, may well be the moment when the decision is finally taken to sell.

In the meantime, the Moores will carry on fighting and debating, and even in these straitened times, adding to their millions.