Richard Coulson

First published in The Tribune, Friday, January 8, 2010 and reprinted here with the authors permission.

From many possible candidates, we have picked just a few stories of the past year that record success or failure -  winners  meeting their objectives,  losers  still far off their targets.  There’s nothing inevitable in the losers’ failings – no acts of God or intractable conditions – simply  misguided human decisions. With effort, good-will and imagination, these decisions are all correctable, so that the losers of 2009 could well become the success stories of 2010.

Winner: Robin Hood. What started as a bare-bones purveyor of appliances in cramped premises  on Soldier Road has grown in less than a dozen years into a mega-store of more than  100,000 square feet that dominates a once sleepy shopping center way down Harold Road. Our closest thing to Walmart, Robin Hood now has 25 departments stocking hundreds of thousands of items. Its founder and hands-on boss, transplanted American Sandy Schaefer, follows the tradition of its name “take from the rich, give to the poor” by trying to post the  lowest prices for everything he sells, and usually succeeding. Based on years of experience buying remainders and odd-lots at fire-sale bargains, and backed up by a wholesaler in Florida, he has become a favorite of economy focused shoppers,  drawn by an aggressive advertising campaign, including the recent full-page announcement of equity share grants to key employees. As a private company, Robin Hood does not release figures; all Schaefer says is that he has enjoyed “good growth” in 2009 and is confident of “profitability into the next year”. His single location does not provide the sales volume of his multi-store supermarket competitors SuperValue and City Markets, but he’s made clear that he plans to extend the Robin Hood brand  with new units east and/or west. Can he overcome the still suffering Bahamian economy to support this optimism?

Winner: Kelly’s Home Centre. This mainstay of Nassau shopping might be likened  to Home Depot with a touch of Bloomingdales. Founded in 1927 by the Kelly family as a basic hardware outlet, it took its present form in the 1980s by becoming the anchor  store at the strategically located Mall at  Marathon, where this pre-Christmas not a slot was to be found  in the vast parking lots. Kelly’s check-out lanes were once again jammed with Bahamians who rely on its 16 departments for every category of home furnishings, from mundane paint to elegant table settings. Another private concern that does not release earnings, there’s little doubt that its tightly concentrated premises with an alert staff of over 300, often long-time employees, produce a profit for its owners, the second and third generation Kellys. 2009 was not an easy year, as the recession hit even this retail stalwart just as it absorbed the untimely death of its long-time boss David Kelly. Fortunately, David’s dynamic wife Nancy had  been side-by-side in running the operation, showing a particular flair in buying from international brands, and could slip into the role of  President – although in the company website she is shown modestly as “Buyer, China, Crystal, Glassware”, with one son named as  general manager and two others as departmental buyers. With Nancy in charge and her sons behind her, the successful formula  may be revised, but cautiously and incrementally.  New sites are  considered, perhaps in the growing western districts, but to  date rejected in favor of the control that can be exercised over one central operation. By the usual metrics, sales per square foot and sales per employee, we guess results are pretty rosy, so why rush into change?

Loser:  Bahamas Supermarkets (City Markets.) Sadly for its  shareholders, 2009 gave no hard evidence of  improvement since the controversial  change of controlling ownership from Florida’s Winn-Dixie in 2006. The acquiring company, BS Holdings, which bought 78% of the shares for  $54 million and immediately loaded itself with $26 million of debt, was a special-purpose Bahamian vehicle created more from financial opportunism than from operational common-sense. The abrupt termination of Winn-Dixie’s products and its know-how in  financial controls, the frequent changes at the general manager level, the failure to publish timely reports to shareholders, the  disappearance  of the previously regular dividend stream, the defection of the long-time auditing firm  – all these have been well reported. The hard news late in 2009 included confirmation  of a  $13.4 million loss for fiscal 2008 (to June) and a possible loss of maybe half that for fiscal 2009.  The Trinidad conglomerate Neal & Massy has now become the de facto controlling party, with a majority of the Supermarkets directors and apparently the largest single stake in BS Holdings. In one sense, that may be good news for the future: the Trinidad  group,  major retailers in the Caribbean, have announced they will plow their financial and managerial resources into engineering a turn-around, and we wish them every success in this effort, so that the long-suffering Supermarkets minority shareholders will eventually see value restored to their holdings. But the strategic result of the last few years has been merely to change control of an iconic Bahamian business from an American owner to one from Trinidad. Can this be considered progress?

Winner: Public Service at the Passport Office and Elsewhere. From the sweaty chaos of last summer, when workers and house-wives  spent long  wasted hours  in disorganized queues to submit their passport applications and then, after several weeks, await final delivery of the shiny new document,  calm and efficiency have been restored. The mid-year confusion was caused by the “perfect storm” collision of thousands of vacation-bound travelers and seekers of foreign education, against the need to take their fingerprints and issue  the new machine-readable passports with  embedded chip, combined with  severe space shortage at the Thompson Boulevard building and lack of  computerized equipment and trained operators, requiring the emergency hiring of COB tech students. Minister Brent Symonette reports that these deficiencies have now been met.  He and the head of the office, Mr. Franklyn Dames, together with his staff, should be congratulated for making passport applications no longer an experience to be dreaded, but simply a normal requirement of travel. Elsewhere, whatever high-level financial or managerial problems  plague NIB, BEC, Batelco, or Road Traffic,  the people (usually pert ladies) at the cutting edge of dealing with the public over details of licenses, bills and other paperwork have become, in our experience, uniformly helpful and friendly.

Losers: Downtown and Arawak Cay. We link them  because  closely related:   downtown Nassau cannot be fully revitalized until  commercial shipping is moved to new container port facilities on Arawak Cay, and development of the Cay as a whole depends on how downtown  is restructured. Accomplishments  in 2009 included dredging of the harbor to accept the humongous “Oasis” cruise ships, and, at last, a contract for rebuilding the straw market, as well as forming  The  Downtown Nassau Partnership,  an optimistic  public-private joint venture. But despite a distinguished Board and  an energetic  full-time CEO, the Partnership is still making excruciatingly slow progress towards becoming a statutory Business Improvement District that would have real powers to create downtown amenities and encourage rebuilding of the derelict Bay Street stretch east of Elizabeth Avenue: enabling legislation has not even reached the drafting stage. Meanwhile, the  new port is in the hands of the  Arawak Cay Port Development Company, a consortium of private companies whose  Board is eager to start construction but is hamstrung by continued delays in reaching agreement with the Prime Minister over key issues of financing and governance – although  it was he himself who in January of 2008  decreed Arawak Cay as the official choice over the much-studied southwest alternative.  We  recall Minister Brent Symonette
shortly after his election in June 2007 confidently declaring: “We’ll have the trucks off Bay Street in 90 days”; now the cry is “ships to Arawak by June (or is it August?) 2010”.  How time passes!

Loser: The Grand Bahama Port Authority. This long-running reality show now broadcasts another dramatic episode, featuring the aging patriarch Sir Jack Hayward and his suave acolyte Hannes Babak  launching a new battle over the bones of the GBPA against the patrician St. George heirs and their bulldog lawyer Fred Smith.  The waning weeks of 2009 have seen an impressive display of Sir Jack’s  imaginative business tactics. First he announces that he will sell his 50%  (or 75%?) stake in the enterprise to an undisclosed buyer, then reveals that party is named Mid-Atlantic Projects, unknown to normal research, led by one Joe Rosetti,  who expansively declaims he would really like to buy 100%, although he’s not clear whether our Government approves the deal, which Sir Jack says is irrelevant because all he’s selling is shares in a Cayman holding company. Rosetti appears to be Joseph R. Rosetti, once security and intelligence expert for IBM, and now a consultancy partner with Howard Safir, former New York City Police Commissioner; clearly  a man of many connections, but whom precisely? More or less simultaneously, Sir Jack   demonizes Hutchison Whampoa, founder of the Container Port, the biggest contributor to the Freeport economy, and  antagonizes his entire family into litigating against him. Perversely, he fights City Hall by backing Mr. Babak  as continuing  boss of GBPA, whom  Mr. Ingraham has made crystal clear he wants “out”. Sir Jack and Hannes retort with perhaps the weirdist idea yet, that Hannes can run Freeport from an office in the Cayman Islands. The plot evolves daily, so we can only say “watch these pages”. Unfortunately, any immediate news is not likely to lift Freeport and the GBPA out of the loser column.

Mr. Coulson has had a long career in law, investment banking and private banking in New York, London, and Nassau, and now serves as director of several financial concerns and as a corporate financial consultant.