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John George “walks away” from JAG JV and industry

Mobile News
August 16, 2010

JAG joint venture with Go Mobile changes into sale of JAG chain, with John George stepping down after 21 years in industry

Dealer veteran John George has quit the industry, passing ownership of around 75 JAG retail stores to joint venture partner and Go Mobile boss Iain Humphrey.

Both parties made clear today (August 16) the parting was amicable, and not as a result of disagreement over the future direction of JAG franchise outlets, as claimed by sources in Mobile News (issue 470; August 16, 2010).

The pair have agreed to shut down JAG’s headquarters in Perranporth, Cornwall, to run the combined retail business from Go Mobile’s base in Daventry, stripping out around £90,000 of operational costs in the process.

JAG staff have been informed of the decision. Nine staff are to be made redundant, Mobile News understands, out of a total headcount of 21. Twelve have accepted jobs in Daventry.

George reckoned the joint venture is well-backed already by Go Mobile’s retail systems and by the Shebang business without him, the pair said.

The sale of the JAG outlets to Go Mobile has been worked on an earn-out basis, linked to profitability of the combined estate over the next years.

Go Mobile national sales manager Gareth Murray is handed charge of the retail operation.

Humphrey will, as planned, put focus on the associated Shebang distribution and Sellfone software businesses in support.

George said: “We were looking at the costs and it’s much more cost-effective to put all head office operations through Iain’s Daventry business. It makes better sense, financially.

“There’s no point in me running the whole thing from Cornwall when the actual operation is in Daventry.

“Iain’s staff have a lot of experience across a range of networks. Our experience is very much limited to Orange at present, so there was an issue there; we haven’t done a Vodafone connection for five-and-a-half years. There is synergy, therefore, in doing it this way.”

He added: “I will be receiving something from the merger as long as it is all run properly and goes well, which I’m confident that it will. I’ve known Iain for nearly five years and we have a good understanding so we’ll work through any problems and find a resolution to any we encounter. This is the way forward.

Humphrey said: “John has decided to stand back because he considers there to be a greater chance of success for the retail operation with a single head office, and associated cost base.

“There was never a disagreement; just the opposite. John has seen his business is in good hands, and reckons it is better served by a single head office.

“The franchise situation must be looked at, but I am very keen to retain all parts of the JAG retail business.”

In June, JAG and Go Mobile announced they were to resurrect their failed deal to merge their two companies in late 2008 under JAG’s leadership in a new 50/50 joint venture. The sale of 57 Go Mobile stores to JAG collapsed at the beginning of last year, as JAG backed out of the earn-out deal when trading suffered.

The new joint venture arrangement saw the two parties pool a combined retail estate of 109 outlets, with some Go Mobile outlets having been closed in 2009 prior to the new agreement.

George was due to lead the merged retail entity from Perranporth.

Retailer JAG, named for its founders initials (John Arthur George), was founded in 1989, and had close to 100 shops at its peak in 2008.

Following the collapse of the Go Mobile purchase in late 2008, JAG went into a ‘pre-pack administration’ and emerged with a new franchise strategy, where George sought to make use of the JAG brand and also reduce his exposure on certain sites and transfer ownership to franchisees. Sixty-eight of its 75 outlets are now franchises.

The demise of Dixons Stores Group’s The Link retail chain in 2006 saw JAG become the third-largest independent mobile retailer brand in the UK, following Carphone Warehouse and Phones 4U, with more than 450 and 800 stores respectively.

The expanded JAG chain will be rebranded Go Mobile under the new ownership, and take that position.

JAG was for a long time an Orange federated partner. Go Mobile has direct sales arrangements with all major network operators, except O2.

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