Could UK entrepreneurs learn from Tai Lopez who saves failing businesses?

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According to the Quarterly Company Insolvency Statistics, Q3 July to September 2020, released by the Office of National Statistics in the United Kingdom, the company liquidation rate dropped in the 12 months ending Q3 2020 to a figure of 32.2 companies per 10,000 active companies across Wales and England. Previously, the figure was 37.0 companies per 10,000 active companies in the 12 months ending Q2 2020.

2020 was an outlier year, given the devastating effects of the novel coronavirus on accelerated company closures between March and June 2020. Yet, despite the pandemic, company insolvencies actually peaked in Q4 2019, before plunging precipitously from 4,258 company insolvencies at the start of 2020, down to 2,672 by the end of Q3 2020.

Stats Show Sharp Increase in Number of Failing Companies Across the US, UK, & Beyond

Statista – a leading statistics-based resource online – reported exceptionally high levels of business closures, temporarily, or permanently owing to the novel coronavirus, as at April 2020. The hardest-hit industries included arts, entertainment, and recreation, accommodation and food service activities, construction, wholesale and retail trade, manufacturing, education, administrative and support activities, et al.

Service-based industries where person-to-person interaction is essential were hardest hit, and those relate specifically to accommodation and food service activities, arts, entertainment and recreation. Forbes listed a coronavirus bankruptcy tracker, which focuses on the big brand names reporting significant losses, divestiture, or liquidation in 2020. Among these are companies like the Aldo Group, Briggs & Stratton, Brooks Bros, Chuck E. Cheese parent company CEC Entertainment, CMS cinemas, Fig & Olive, Golds Gym, JCPenney, Modell’s Sporting Goods, Pier 1 Imports, and many others.

How Tai Lopez and REV Are Bringing Back Moribund Companies

Tai Lopez, the high-flying entrepreneur with a formidable investment portfolio, has featured prominently in the news, owing to his bold strategies vis-a-vis turning failing businesses around. Tai Lopez and business partner Alex Mehr (a former NASA scientist and co-founder of online dating application Zoosk) partnered to form REV. The acronym stands for Retail E-Commerce Ventures, a Florida-based corporation tasked with transforming distressed, high-profile brands into lucrative e-commerce operations.

The company already boasts a formidable selection of holdings, including the following top-tier brand names which fell on hard times:

  • Pier 1 – Pier 1 was generating revenue of $1.5 billion prior to its acquisition by REV in 2019. Lopez and company outbid major opposition to purchase the rights to sell Pier 1 merchandise, with full ownership of the hugely popular Pier 1 brand. Pier 1 was acquired for a price of $31 million for an $11 million premium over the sales price of $20 million. Pier 1 became a distressed business when it could no longer compete with the opposition, and substantially cheaper prices became available through e-commerce giants like Wayfair, Amazon, eBay, and the like.
  • Dressbarn – in 2019, just before Dressbarn was acquired by Tai Lopez and REV, the company featured land-based locations. 650+ liquidation proceedings kicked off in earnest in late 2019, after the Ascena Retail Group decided to finalize the winding down of the brand’s retail operations. All stores were slated for closure by December 26, 2019, and the company was acquired by Retail E-Commerce Ventures LLC, with a shift to e-commerce operations in 2020. At the time, Tai Lopez announced, ‘… We believe the future of Dressbarn is bright and we are excited to grow and expand the online presence for the brand…’
  • RadioShack – RadioShack is another example of a hugely popular American brand which enjoyed surging levels of market penetration in the 1980s, 1990s, and early 2000’s. REV acquired the full rights to use the RadioShack brand name with e-commerce operations. At its peak, RadioShack featured 7000+ retail stores around the country.
  • Modell’s Sporting Goods – Modell’s Sporting Goods is an American icon in the sports merchandise industry. With hundreds of stores operational around the country at its height, this particular brand also fell on hard times. The company filed for bankruptcy in March 2020, and moved quickly to liquidate 134+ locations. It began operating in 1889, with its base of operations in the New York City Metropolis.

The ailing company featured as one of many retail operations struggling to survive in an era where the retail apocalypse is making it near impossible to sustain physical operations with declining footfall traffic, and a switch to e-commerce. Known as a brand accumulator, REV and Tai Lopez wasted no time acquiring this hugely popular sports brand for $3.7 million. The company was purchased with an eye to relaunching the ever-popular Modell’s Sporting Goods name online.

Why did Tai Lopez Purchase Failing Brands for so Much Money?

For Lopez it’s all about two words: Brand Recognition. This strategy relies wholly on customers’ impressions of brands. In the case of Modell’s Sporting Goods, Dressbarn, Pier 1, RadioShack, and other high-profile brands it’s about credibility, awareness, and trust. These brands have it and REV implements turnaround strategies to remove failing aspects of these businesses – notably the cost-intensive retail operations. REV then takes all business activity online.

By leveraging their knowledge of online marketing, website optimization, and social media reach, Lopez and Mehr are able to implement dramatic turnaround strategies with tremendous profit generating potential. It also helps that successful business negotiations helped to acquire multimillion-dollar companies for ‘affordable’ prices.  According to Lopez, ‘… By buying Modell’s, the real value we are paying for is that little bit of trust where people go, ‘Yeah, I’ll put my credit card on that website because I’ve heard of Modell’s, my grandpa went there…’

In essence, there is no reason why the Tai Lopez business strategy of purchasing distressed brand names and transforming operations for e-commerce activity will not work in the UK. In fact, the UK features many entrepreneurs who have adopted similar strategies to Tai Lopez. It’s all about buying credible brands that people trust. Provided the necessary business acumen is driving the turnaround strategy, it is possible to continue operations albeit on an e-Commerce platform.





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