Springfords LLP blog

Some news, views and comments about everything and anything, relevant and irreverent.

Lots of Eggs, Lots of Baskets

17 May 2016

Reliance on a single contract for the bulk of your work can be a big problem if something goes wrong.

Printer Polestar Permanently Poleaxed ran the headlines.  Well, The Times was a little more stern in its reporting, but if some inky-fingered bloggers had been involved, it may have been rather more irreverent: The company that prints Hello! says Goodbye! 

They may be behind half the titles on your dentist’s coffee table, but Polestar is not a household name.  Now they’re leaving a big hole to fill in the glossy magazine world, but not before their lesson is written in stone for us all to observe, least we befall the same fate.

Unless you’re in the publishing trade, or are the sort who gets out a magnifying glass and reads the small print at the bottom of the editorial contacts column, or are awaiting root-canal work at that said dentist, Polestar will have passed you by.  Now it looks like the Essex company may be passing by us all, and into the history of British business. 

The firm is not a victim of the largely apocryphal contraction of the traditional media sector.  There’s still plenty of printing work out there.  Just take a look at the magazine racks in newsagents and supermarkets for proof of that.  What did for them this time around was an undiversified order book that delivered too much work to too few clients.  Consequently, Britain’s biggest independent printer had to hold the front page, and all the other pages as well, when a client proved reluctant to renew a huge contract, and forced the company into administration.

It’s not the first time Polestar has flirted with closure.  Turn back the pages to just five years ago, and they were in a similar position, under different circumstances.  In 2011, the BBC made a feature on the consolidation of the major printing industry and collapse of Polestar’s parent company which put over 8000 jobs on the line.  Too many expensive super presses were chasing too few huge contracts and casualties were inevitable.  Subsequently the Colchester-based subsidiary was saved as an independent operation on a much smaller basis.  Sadly, recent commercial history seems in this case to have been reprinted with very few amendments.

The lesson, in black and white, is over reliance on one customer makes a company vulnerable to a change in fortune.

There’s never a bad time to check what the weight of a large contract means for the dynamics and health of your business. It may be difficult to resist an opportunity for growth that a huge new contract can offer, but it can be equally difficult to weigh up the exposure your company faces on the back of such a deal.  Whether you’re the muted sound of a John Bull Printing Set or the thunderous roar of a Fleet Street publisher, hold the front page until you’ve accounted for all the p’s and q’s on the front page of that next big contract.

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springfords blog

Some news, views and comments about everything and anything, relevant and irreverent.

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