Powerhouse (shop)
Encyclopedia
Powerhouse was a United Kingdom
electrical goods retail chain
which went into administration in 2003 and finally entered receivership in August 2006. At one time it was the third largest trader in the UK electrical goods market.
of the retail arms of Southern Electric
, Midlands Electricity
and Eastern Group. The head office was based in Bicester. In an attempt to differentiate themselves in the market they positioned themselves as 'local experts' with each stores main sign bearing the towns name. To fill gaps in their product lineup many stores had concessions for Time Computers and their short-lived mobile phone
arm Time Talk. There was also a close relationship with Sony - all stores up until the PRG buyout had 'Sony In-Store' sections where Sony products were isolated on backlit gondolas. nPower were also partners, with Powerhouse acting on their behalf to sign up new customers. This was a sound theory, as Powerhouse's strengths were in the MDA sectors and these deals helped their offering look competitive. However, Time Computers was not in good shape. Time Talk barely lasted 12 months. All Time concessions had closed by 2002 but were not officially refurbished. It was left to the individual store to best use the space as they saw fit.
Powerhouse initially traded strongly and bought out the Scottish Power
retail outlets in an attempt to widen their footprint. Very little effort was put into refurbishing the 'jock shops' and the Scottish Power logo could often still be seen etched into the glass in the former Surround Sound
and Hifi demo areas. Additionally, this led to some towns having more than one Powerhouse store (e.g. Nottingham).
At its peak, Powerhouse had 220 stores in 2000. In August 2003 following a very poor peak 2002 80 stores were immediately closed. The company continued to trade for two weeks while looking for a buyer. At the end of the two weeks the company went into administration.
purchased the leases and assets of Powerhouse. They evaluated the entire store portfolio and opened PRG Powerhouse with 180 stores (some of them having ) been closed two weeks previously. Unfortunately, due to a desire to keep costs low, no signage was changed and only small notices informed customers that the new firm was not liable for any items customers had paid for and not received from the former company. As a gesture of goodwill, they honoured the small item replacement warranty in-store. Large item warranty claims were handled by the underwriters. This initially led to a great deal of difficulty for in-store staff as angry customers struggled to get their faulty goods replaced. Internally the stores went through a minor refit, mainly to remove the Sony in-store branding and to better focus on the growing trend of flatscreen TV's.
Powerhouse had several holes in its product lineup. Following the removal of the Time Talk and Time Computers concessions, Powerhouse sold no computers or mobile phones. Games consoles were only stocked erratically around peak time. No attempt was made to sell the emerging iPod.
. Store closures began in 2005 and by the start of 2006 the company had less than 100 stores. Central warehouse distribution had ceased and each store was run as a factory outlet
with local 'man with a van' firms subcontracted to handle deliveries. In June 2006 the remaining stores went into administration but were again saved.
items that Powerhouse had previously ignored. A new website was launched and four stores were fully refurbished. Little is known as to what happened at this point, but the relaunch was never completed and the chain went into receivership on the 9th of August 2006.
to staff. This enabled staff members to see how the store was performing in a realistic sense. The biggest problem with this approach was managers sometimes 'declining business' if they felt it wasn't profitable enough for the store. This practice was discouraged when PRG took over.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
electrical goods retail chain
Chain store
Chain stores are retail outlets that share a brand and central management, and usually have standardized business methods and practices. These characteristics also apply to chain restaurants and some service-oriented chain businesses. In retail, dining and many service categories, chain businesses...
which went into administration in 2003 and finally entered receivership in August 2006. At one time it was the third largest trader in the UK electrical goods market.
Company History & Details
Powerhouse was born in 1992 from a management buyoutManagement buyout
A management buyout is a form of acquisition where a company's existing managers acquire a large part or all of the company.- Overview :Management buyouts are similar in all major legal aspects to any other acquisition of a company...
of the retail arms of Southern Electric
Southern Electric
Southern Electric plc was an electricity company in the UK. It is listed on the London Stock Exchange as SSE . Southern Electric merged with Scottish Hydro-Electric plc in 1998 forming SSE. Since then SSE bought SWALEC and Atlantic Electric and Gas...
, Midlands Electricity
Midlands Electricity
The Midlands Electricity Board was the public sector utility company responsible for electricity generation and electrical infrastructure maintenance in the Midlands of England prior to 1990...
and Eastern Group. The head office was based in Bicester. In an attempt to differentiate themselves in the market they positioned themselves as 'local experts' with each stores main sign bearing the towns name. To fill gaps in their product lineup many stores had concessions for Time Computers and their short-lived mobile phone
Mobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
arm Time Talk. There was also a close relationship with Sony - all stores up until the PRG buyout had 'Sony In-Store' sections where Sony products were isolated on backlit gondolas. nPower were also partners, with Powerhouse acting on their behalf to sign up new customers. This was a sound theory, as Powerhouse's strengths were in the MDA sectors and these deals helped their offering look competitive. However, Time Computers was not in good shape. Time Talk barely lasted 12 months. All Time concessions had closed by 2002 but were not officially refurbished. It was left to the individual store to best use the space as they saw fit.
Powerhouse initially traded strongly and bought out the Scottish Power
Scottish Power
ScottishPower Ltd. is a vertically integrated energy company with its headquarters in Glasgow, Scotland. It was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index but in 2006 it became a subsidiary of the Spanish utility Iberdrola...
retail outlets in an attempt to widen their footprint. Very little effort was put into refurbishing the 'jock shops' and the Scottish Power logo could often still be seen etched into the glass in the former Surround Sound
Surround sound
Surround sound encompasses a range of techniques such as for enriching the sound reproduction quality of an audio source with audio channels reproduced via additional, discrete speakers. Surround sound is characterized by a listener location or sweet spot where the audio effects work best, and...
and Hifi demo areas. Additionally, this led to some towns having more than one Powerhouse store (e.g. Nottingham).
At its peak, Powerhouse had 220 stores in 2000. In August 2003 following a very poor peak 2002 80 stores were immediately closed. The company continued to trade for two weeks while looking for a buyer. At the end of the two weeks the company went into administration.
Pacific Retail Group buyout
The Pacific Retail Group from New ZealandNew Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
purchased the leases and assets of Powerhouse. They evaluated the entire store portfolio and opened PRG Powerhouse with 180 stores (some of them having ) been closed two weeks previously. Unfortunately, due to a desire to keep costs low, no signage was changed and only small notices informed customers that the new firm was not liable for any items customers had paid for and not received from the former company. As a gesture of goodwill, they honoured the small item replacement warranty in-store. Large item warranty claims were handled by the underwriters. This initially led to a great deal of difficulty for in-store staff as angry customers struggled to get their faulty goods replaced. Internally the stores went through a minor refit, mainly to remove the Sony in-store branding and to better focus on the growing trend of flatscreen TV's.
Powerhouse had several holes in its product lineup. Following the removal of the Time Talk and Time Computers concessions, Powerhouse sold no computers or mobile phones. Games consoles were only stocked erratically around peak time. No attempt was made to sell the emerging iPod.
Demise
PRG Powerhouse were never able to gain significant traction in the UK electrical retail marketRetailing
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
. Store closures began in 2005 and by the start of 2006 the company had less than 100 stores. Central warehouse distribution had ceased and each store was run as a factory outlet
Outlet store
An outlet store or factory outlet is a brick and mortar or online retail store in which manufacturers sell their stock directly to the public. Traditionally, a factory outlet was a store attached to a factory or warehouse, sometimes allowing customers to watch the production process like in the...
with local 'man with a van' firms subcontracted to handle deliveries. In June 2006 the remaining stores went into administration but were again saved.
Go Switch On
In an attempt to leave the Powerhouse name behind it was planned to relaunch the new company as 'Go Switch On', majoring in high-technologyHigh tech
High tech is technology that is at the cutting edge: the most advanced technology currently available. It is often used in reference to micro-electronics, rather than other technologies. The adjective form is hyphenated: high-tech or high-technology...
items that Powerhouse had previously ignored. A new website was launched and four stores were fully refurbished. Little is known as to what happened at this point, but the relaunch was never completed and the chain went into receivership on the 9th of August 2006.
Internal KPI's
Like most electrical retailers, Powerhouse had its Key Performance Indications for staff performance e.g. warranty sales, credit sales, nPower sales. However it differed in the communication of Gross MarginGross margin
Gross margin is the difference between revenue and cost before accounting for certain other costs...
to staff. This enabled staff members to see how the store was performing in a realistic sense. The biggest problem with this approach was managers sometimes 'declining business' if they felt it wasn't profitable enough for the store. This practice was discouraged when PRG took over.