Thoughts on business and life, of the man who founded the famous Selfridges department store
Most people have an innate disdain for merchants. But, as Harry Godon Selfridge argued 100 years ago: “The preacher, the lecturer, the actor, the real estate agent, the farmer, the employee all, all are merchants, all have something to dispose of at the profit to themselves, and the dignity of the business is decided by the manner in which they conduct the sale.”
This is an abridged version of a classic text on business and life, by Selfridge who started his life in the US in poverty and died in obscurity. In between, he became one of the most famous men of Europe. He transformed the idea of a department store, changed advertising forever, and was engaged in a series of affairs with some of the most glittering beauties of his time.
At 21, Selfridge was working for a store in Chicago, Marshall Field, where he coined the classic advertising line ‘Only ___ shopping days until Christmas’ and possibly the phrase ‘The customer is always right’. Selfridge then moved to London, opened his own store which became an instant hit attracting a million visitors during its first week.
Selfridges was a unique store. Massive space was given to ‘services’—library, a restaurant, a hair-salon and a smoking room. Later, it put up large displays of everything—from a monoplane used in the first flight across the English Channel to a seismograph. The first public demonstration of TV was at Selfridges, in 1925. However, heady with commercial success, Selfridge led a dissolute life, having a string of affairs, got addicted to gambling and was, eventually, ousted by the management. He slipped out of sight and passed away in 1947.
This book is filled with his thoughts about business leadership, customer care, advertising, risk-taking and so on. Apart from the idea that ‘customer is always right’, Selfridge also understood that employee loyalty is key to successful retail operations. He was also an advocate of ethical advertising and argued: “Why should a statement be subject to question? Is it not infinitely wiser to make every statement dependable beyond the chance of question? Why pay for space and then fill it with matter, which must quickly be discovered to be false? Why thus reduce the value of every future statement?”
An array of such statements and powerful aphorisms appear throughout the book, challenging the centuries-old prejudice against commerce.
The two basics aspects to managing your financial life are – avoid losses by staying away from scams and to invest smartly and steadily to generate savings for your retirement. Moneylife Foundation's seminar today tackled these twin themes.
With the number of moneylifers increasing, Moneylife again held an introductory seminar on the basics of financial literacy on “ Learn to be Safe & Smart with Your Money” on 1 May 2014 (Thursday) supported by ICICI Bank and Disha which was indeed very informative, interactive and knowledgeable. The event, which again witnessed a packed audience, was held at the Moneylife Knowledge Centre (Dadar).
Sucheta Dalal, managing editor of Moneylife & financial journalists with over 25 years of experience warned the audience to stay away from so-called “ponzi schemes” which aim at fooling people to buy into attractive schemes promising extraordinary returns. She explained that the main problem is that people do not distinguish between purchasing consumer or financial products. They anyway get lured by big names and a strong sales pitch. The trick anyway is to look through the “sales pitch” and not get carried away. Ms Dalal warned that companies like Amway, Tupperware, Herbalife are also examples of pyramid schemes. According to research, less than half the people are able to sell and make money and end up blaming themselves and not the company. These Ponzi/MLM/Pyramid Schemes which operate at every level in the country have suceeded to cheat people from top managers to the poorest people.
Ms Dalal also emphasised on how one should not lose money to banks. Relationship managers usually work only to earn themselves fat commissions from your investments.
Thus, most “relationship managers” resort to mis-selling or hard selling a product. In order to be safe, one should have all communication documented. Ms Dalal also touched up on area related to credit cards, insurance and credit scores.
In the second session, Debashis Basu, editor and publisher of Moneylife, spelt out the various ways in which one can be smart with money—and presented to the audience the best ways in which they can manage their money. Mr Basu emphasised the importance of saving regularly to deal with big expenses such as education for children and more importantly for retirement.
Examples were shown on how one could use the power of compounding to their benefit. “The best way invest smartly is to start as early as possible and save as much as possible”, said Mr Basu.
One of the most important aspect of savings where a majority of savers are left confused is to invest how much and over which financial products. Left with confusing choices, majority of savers opt for bank fixed deposits which is a safe and easy option. Mr Basu explained to the audience how much they should allocate to fixed income investments and equity mutual funds depending on their age and whether or not they have dependents.
Inflation is the permanent risk and is difficult for one to avoid. The only way to overcome inflation is by smart investing. Savers should avoid trying and timing the market on their own and should stick to regular investing.
The risk involved in various asset classes was explained and how much returns these assets are expected to generate was informed to the participants. How a mix of these assets could be used for different investment horizons to keep you money safe was also discussed.
If you have not become a member of the Foundation yet, please visit www.mlfoundation.in for more details. Membership is free of cost, and Moneylife Foundation members also get access to such informative seminars and can utilise the state-of-the-art facilities at the Moneylife Knowledge Centre.
For the Godrej group unit, the pace of recovery in margins in Africa and Indonesia is likely to gather momentum into FY15. This is expected to be a key catalyst to drive the stock price higher, says Nomura
Godrej Consumer Products Ltd (GCPL)'s consolidated net profit in March 2014 quarter declined 29.28% to Rs236.28 crore on 12.19% growth in total income from operations (net) to Rs1,931.52 crore over same period last year.
The March quarter results of Godrej Consumer Products Ltd (GCPL) were in line at the net income level, but the key point is that there will be a recovery in the international business performance, says Nomura in a research note.
Nomura said it expects the pace of recovery in margins for Godrej Consumer in Africa and Indonesia to gather momentum into FY15F, which it believes will be a key catalyst to drive the GCPL stock price higher. The first leg of re-rating from March lows has already come through, but Nomura expects the stock to be a sector outperformer in FY15F.
According to Nomura, growth in the household insecticide business in India will also be a key growth driver; it is expected that the company will deliver strong results in this segment over the next two years.
The GCPL stock currently trades at 22.2x FY16F P/E (EPS: Rs35.4). Nomura maintains its 'Buy' rating on GCPL and raises its target price to Rs885, implying a 13% upside from current levels.
The performance forecast of GCPL is given in the table below: