Shebang’s quest for explosive growth has led to the problems it faces today, according to Paul Withers, who says the company must now focus solely on making its MVNO a success before considering spreading its wings further
The experience of Shebang Technologies Group is a perfect example of how quickly things can go wrong in the mobile channel, especially in times of recession, when the right decisions are crucial to securing the future of a business.
Shebang had its fingers in a lot of pies. It was a prominent name in mobile and accessories distribution, as well as airtime supply.
At the beginning of 2011, Shebang group CEO Iain Humphrey (pictured) revealed plans for a company restructure, designed to provide greater clarity on Shebang’s offerings.
It saw the company split into six divisions – Consumer Solutions, Logistics Solutions, Business Solutions, Software and Services, Web Solutions and Properties – under the Shebang Technologies Group name.
It also grew its Go Mobile high street retail estate to more than 100 stores across the UK. Under its Purple Partnership franchising scheme it had plans to double that number before the end of this year.
In both 2009 and 2010, Shebang achieved turnover of £59 million. Last June, Humphrey predicted turnover would increase by 72 per cent in the 12-month period – it was tracking at a 30 per cent increase at the time.
This growth never materialised, and turnover levelled off at the £59 million mark. This was possibly when the train started to come off the rails. With 240 employees the signs were that Shebang was growing too quickly.
By May, Humphrey was honest enough to admit the error of chasing too great an expansion too soon. “I absolutely regret making the move. It segmented too many people in the business,” he told us.
By this time staff numbers were being trimmed. Key executives such as Logistics Solutions MD Joe Bennett, Consumer Solutions MD Julian Burton and Business Solutions MD Tanny Cordingley departed.
Then Humphrey revealed he was selling the Go Mobile retail estate, as well as online retail website Affordable Mobiles, to A1 Comms.
The B2B dealer also has control of Shebang’s Asda contract, running 10 ‘Phone Shops’ following a trial in the supermarket chain’s telecoms outlets. Shebang had been charged with managing fulfilment of the outlets selling new Orange,
Vodafone and Three connections and upgrades, as well as prepay and accessories.
We understand that Shebang’s accessories business is being sold to BrightPoint also.
Both the Consumer Solutions and Logistics Solutions divisions have both gone into liquidation, and Business Solutions has also ceased trading.
There have also been numerous reports of Shebang owing hundreds of thousands of pounds to various parties, including HMRC for unpaid VAT.
Humphrey had kept a low profile but spoke to us as we went to press.
He admitted Shebang had endured tough times of late, but was remaining confident it would bounce back in the next year by now focusing on its MVNO ventures.
Ex-Everything Everywhere director of indirect sales Duncan Hay, who joined Shebang in January, was tasked with cutting costs and restructuring the business so it could focus on fewer areas.
Shebang has now put its Daventry HQ on the market and will move to smaller premises nearby. Only 32 staff are left – 160 have departed in the past year.
All Shebang has left is its Go Mobile 4 Everyone MVNO, sold through Go Mobile. It really is a shocking fall.
Shebang now needs to focus its efforts on this, and if it can make this a success over the next 12 months, it can then perhaps concentrate on spreading its wings further. It has learnt the harsh lesson of growing too quickly, and surely won’t make the same mistake again.