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The Failure of Challenger The recent (2008) announcement that
Challenger Syndicates had called in the receivers is, of course, very bad news
for all those connected with the company. It is not good for those in their
employ, the proprietors, the customers and, of course, those who find themselves
owed money by the company and, presumably now will not be paid. I guess that the
exact breakdown of these figures will come out in the end, but right now I would
suggest it runs in to many thousands of pounds. If one takes a step back from the
make-up of the personalities involved one can only say that Ed and Gill Rimmer
tried, and tried very hard with their business. They were regulars at more or
less every national trade show within the waterways industry manning one stand
or another. The cost of appearing at these shows is considerable, and I would
suspect on occasions the return was negligible, nevertheless they always came
back for more. Also they had their own open days which were generally held
outside, often in quite inhospitable weather and, having done similar events, I
can tell you that when you are freezing to death and looking at a handful of
visitors it can be most soul destroying. Yet, you dust yourself down (or warm
yourself up) (or, in the case of Gill Rimmer, who was unfortunate to fall in the
canal at one such event, dry yourself off (the rumours that for months she was
called Gill Swimmer were never founded)) and get up and go back to fight the
good fight again. Then of course there were their glossy
brochures, and their mailings and their adverts in the magazines. All of these
have costs that need to be paid, all of these show a level of commitment. A full
page in most of the Waterways magazines is around £600.00 per month. So, whilst one might now look back and
say they got it wrong, they certainly showed a level of commitment that perhaps
cannot be faulted. Of course there were those, myself
included, that felt that the way they tried to hold their cards very close to
their chest regarding their company was close to paranoia. Stories about of
people being told to remove web sites they had written, and not post to any
message boards for fear of recriminations, abound. I guess if they (the Rimmers)
themselves felt more comfortable with that and that was their way then so be it.
Of course as an outsider, after seeing the way it was run, you did not have to
join, but then I guess that was not always made apparent until you had handed
over you money. If one looks at the business as a
whole, there would have been two forms of income. The first would be the income
from managing the boats. Lets say this was £250 per share over 12.5 owners per
boat times 27 boats, or say £84,000 per year. Out of this comes all the
overheads in running the business. Items such as post, telephone, staff costs,
web sites (they did not write their own) heating, advertising, general office
overheads, lighting etc. etc. etc, (and I appreciate they ran it from their
home) Quite simply it probably was not enough. BUT there is another side to this
business, the sales of the shares. THAT is where you CAN make some money and use
the profit from that to keep the other side going (and growing) until it breaks
even. Lets make no mistake about it, the mark up on Challenger’s shares was
substantial, and let me also be the first to say that I do not see anything
necessarily wrong in that, if the customers were prepared to pay it then so be
it. The customers, at the end of the day, DID have a choice. My guess is that the sale of shares
slowed down to such an extent that the revenue it generated dwindled away and as
such the company ceased to be solvent anymore. Equally I would suspect that
certain boats may well not have been paid for (or at least the purchase was
funded by third parties who needed to be paid), and the company could not meet
its commitments. But, all of the above is my reading
between various lines, and NONE of it should be considered as fact. Some people have made
comments about my views and these may be found
here
POST SCRIPT - and the facts did come out and it seems the company were using
old syndicate boats to try to form a hire company and these boats were then
being sold to "investors" more than once - in one case the same boat is thought
to have been "owned" by three people...