Reed (company)

1960–1971

First branch of Reed Employment agency, 1960

The economic expansion and full employment of the 1950s led to a flourishing of employment agencies in the UK. While working as an accountant at Gillette, Alec Reed noticed that he was signing off on numerous payments to employment agencies, giving him the idea to start his own.

While still employed at Gillette, Reed worked a second job in an estate agency opposite Hounslow bus station. The estate agency’s premises was split into two businesses, with one side selling property and the other side selling carpets.^[8] Noticing that the carpet business was struggling, Reed approached the owner and offered to rent that portion of the premises for his fledgling employment agency.He funded the launch with £75 taken from his Gillette pension fund. The 26-year-old Reed opened the first branch of Reed Employment on 7 May 1960. Reed’s former colleagues at Gillette provided him with his first few placements. The firm then expanded to a second branch in Feltham. Turnover grew rapidly but, as Reed later wrote in his autobiography:

With the newer branches struggling, Reed sought the help of an advertising agency newly founded by Maurice and Charles Saatchi; Reed later claimed that their work had no perceptible impact on the business. Instead, Alec Reed began to publicise the company by experimenting with the location of Reed offices. In the early 1960s, most employment agencies were located in first or second floor offices. Copying the example of rival Alfred Marks, Reed began moving his offices to ground floor locations on main shopping streets, such as London’s Oxford Street, so that they could be more easily seen by the public.

1971 flotation

The end of the 1960s saw a bull market in UK share prices, prompting stock market flotations by a number of rival employment agencies, including Brook Street Bureau and Alfred Marks.

By 1969 Reed Employment had opened 75 branches. Although profitable, financing the expansion caused cash flow difficulties. These were compounded when the firm’s bank began to reduce its overdraft facility, which the firm had been using as working capital. Faced with a shortage of capital, Reed decided to float the business. Reed Employment floated on the London Stock Exchange on 13 January 1971, at an offer price of 12s 6d, a price/earnings ratio of 13.1 and a yield of 4.4%. Alec Reed retained a third of the company, having given a further third to his three children and floated the remaining third (1.3 million shares, for just over £10.97m in 2014 terms). At their 1980s peak, the shares increased to 150 times their offer value; they averaged 80 times offer value for most of the 1990s. The Reed Family retained effective control of the company post-flotation, through the combination of Alec Reed's shareholdings and that of his children. Alec Reed used part of his flotation windfall to found Reed Business School in 1972.

Alec Reed later described the flotation of Reed Employment as his greatest mistake in business, citing the administrative and financial burdens of running a public company: "Everything you may have heard about the city’s obsession with short-term performance is true...you become a metaphorical unpaid greyhound on a racetrack called the stock market." Reed has said that he started his Medicare retail pharmacy business partly to help maintain Reed Employment’s stock price during slumps in the wider economy.^[9] Medicare was founded in 1973 and sold to Dee Corporation in 1985 for £20 million; Reed used his £5m windfall from the sale to start the Reed Foundation, which owns 18% of the Group’s shares.

1972–1983

Reed saw rapid expansion during this period, punctuated by two recessions. In 1972 turnover doubled to £10m, with profits just under £1m, helped by rising demand for temporary workers and by inflation.^[10]

By 1975 profits had halved, partly due to the 1974 oil crisis. Reed expanded into new divisions and set up specialist recruitment firms, including what became to be known as Reed Health, Reed Finance and Reed Computing, among others. All were established under a holding company (Reed Executive), so that failure in one specialist division would not bring down other divisions. By 1979 the company had returned to profitability, achieving £3.1m on a turnover of £32m. During the 1970s and 1980s, Reed donated 1% of its pretax profits to the Charities Aid Foundation.

Reed also experimented with publishing during this time. Roundabout magazine was designed to be given away free to young women at Tube stations. Reed had already published an in-house magazine Reed Girl, but Roundabout was aimed at the public. It featured fashion, beauty and celebrity content, though its main purpose was to carry classified advertising for jobs available through Reed. Roundabout was launched October 1973, on the same day as three other similar magazines. Reed closed the publication in January 1974.

1983–1995

The recession of the early 1980s prompted Reed’s first-ever loss (£1.64m in 1983) and the closure of agency branches, from 130 to 87.^[11] By March 1984 profitability returned, to £1.2m. Reed shares hit their all-time peak in early 1987, reaching £1.80; during this period The Reed Foundation bought back shares, with the Reed family’s holding rising to 70% of the company. In 1988 the firm posted a 62% profit increase to £10.54m.^[12][13]

In 1986 Alec Reed was diagnosed with colon cancer and given a 40% chance of survival. He went on to completely recover, but following his diagnosis he was succeeded by Chris Kelly as managing director of Reed Group, while Reed stayed on as executive chairman and chief executive. In 1992 Reed's son James joined as a non-executive director, becoming operations director in 1994 and chief operations officer in 1995.

1995–2005

In 1995 pre-tax profits reached £8m on a turnover of £150m, up 30% on 1994. Reed launched further specialist divisions in the year, including Reed Learning, Reed Graduate and Reed Managed Services. The firm also began Reed Restart, a not-for-profit enterprise to provide ex-prisoners with rehabilitation and training. In 1999 the firm announced a 40% rise in interim profits.^[14]

James Reed became chief executive in 1997, following Chris Kelly’s resignation.^[15] During this period the firm became one of the first two private sector companies implementing the Blair government’s Welfare-to-Work programme, christened by Labour as "The New Deal".^[16]

Paymaster General Geoffrey Robinson contacted Alec Reed in 1997 with a proposal to outsource some of the work of traditional job centres, with Reed providing training and support to those out of work for 1–2 years or more. Reed refused at first, changing his mind only when learning that rival agency Manpower was interested. The firm successfully tendered for a contract to provide services in Hackney under the banner Reed in Partnership.

2005–present

In 2005 James Reed took the company back into family ownership.^[17]

Reed Specialist Recruitment is listed in The Sunday Times Fast Track 100 league of Britain's largest private companies. In 2018 it reported £1.05 billion in annual sales and £14 million profit.^[18]

Short Film Competition

In September 2009, reed.co.uk launched its annual Short Film Competition with a top prize of £10,000. The competition, run via YouTube, invites film makers to submit a short film of no more than three minutes in length based on a specific theme. Partners include BAFTA, Channel Four, the British Council, Total Film and Creative England. The judging panel has included Jaime Winstone, Eugene Simon, Stuart Cosgrove, Roger Chapman, Paul Weiland and Nicola Reed.

Love Mondays campaign

In January 2008 the company launched a nationwide advertising campaign to promote reed.co.uk. The advertising introduced the firm's current slogan of 'Love Mondays’, with print and poster ads featuring the device of a handwritten Post-It note. The Love Mondays campaign is now fronted by actor and comedian Rufus Jones, who plays James Reed as a caricature of a comic book superhero.

Founder succession

In 2000 Alec Reed stepped down from the position of chairman to become non-executive chairman, before relinquishing all executive responsibilities in 2004 and assuming the title of founder-at-large. James Reed became chairman in 2004.