WHEN George Stewart founded his own printing business in a small office on Edinburgh's George Street, he could not have envisaged the unfortunate situation in which current managing director Terry O'Hare found himself 130 years later.
For, last December, having bought rival Summerhall out of administration, saving 135 jobs, O'Hare was scrutinising its books when he came across some "irregularities" that made his heart sink. Although he had hoped to turn around Summerhall, inte
grating it into his thriving Livingston-based business, Stewarts of Edinburgh, he had to make a tough decision.
Just a week later, on Christmas Eve, O'Hare told Summerhall's staff that the company was being put into liquidation – and that they would all lose their jobs.
"It was horrible," he says. "I had been in to give them the news that there was a lifeline for the company – then just a week later I had to stand in front of them again and say it was all over. I felt dreadful about it."
Weeks later, documents obtained by The Scotsman revealed Summerhall was being investigated by its invoice finance lender, Cattles, for "fraudulent invoicing" on £600,000 of bills. But O'Hare, who has headed Stewarts since leading a management buy-out with Kenny Murray and Marion Reid in 2004, now wants to wash his hands of the entire Summerhall incident.
And the company, always a pioneer – it was the first UK printing firm to create colour picture postcards in 1894 – is now embarking on a new initiative, shifting its focus from purely business-to-business work, to creating a consumer arm. The move, which O'Hare hopes will be up and running in the fourth quarter of this year, will see Stewarts create personalised calendars, greetings cards and photo books for customers via a website.
Operations director Murray admits traditional print is struggling: "If you had a group of printers sitting around and you said 'hand on heart – who has sold print at less than a sustainable economic level?', they would all have their hands up, or they'd be lying. So you can either decide to sit there in that dog fight or we can go out to differentiate ourselves."
But even without the new initiative, Stewarts expects to grow turnover this year – from £6m in the 12 months to 1 April, to £7.7m in 2009-10.
Although O'Hare admits he "did not pay much" for Summerhall, it is the extra costs associated with the acquisition and the subsequent liquidation that have hit the firm's books."The professional costs were the main thing," he says. "We have always traded profitably and this year sales are already showing significant growth."
The company has also navigated its way around problems caused by the credit crunch. Previously reliant on the financial services industry, with the sector making up around 70 per cent of its business – Stewarts has now cut that figure to around 45 per cent.
"We have shifted the emphasis," O'Hare says. "We have started doing a lot more work for government agencies, the NHS and arts organisations. In previous downturns, the banking sector has not necessarily been as badly hit – we had to look at how we can run our business development plan."
STEWARTS of Edinburgh – the printing firm which put a new acquisition into liquidation just a week after buying it out of administration – has admitted it suffered a loss in its last financial year.
The Livingston-based firm snapped up rival Summerhall in December after it fell into the hands of administrators.
But Stewarts, led by managing director Terry O'Hare, was forced to put its new acquisition into liquidation just days later after uncovering "irregularities" in Summerhall's books.
Now O'Hare has admitted that the latest set of accounts for Stewarts for the year to 1 April – due to be filed with Companies House in the coming months – would reveal "a small loss".
Although Stewarts did not pay a large amount for Summerhall, the hit came from the legal and administrative costs associated with the deal.
However, O'Hare hopes to return Stewarts to a profit in the current financial year, predicting a figure of around £400,000.
And in an interview with The Scotsman, O'Hare has told how Stewarts is planning to recover from the huge setback of the Summerhall purchase.
From George Stewart to George Street, a firm with history
STEWARTS was founded in 1879 by George Stewart – then a worker at rival printing firm Waterston's & Sons.
Also a family business, Waterston's was a thriving printworks for many years, until it fell into difficulties in 2003.
Stewarts bought the company's office supplies arm – and with it took on family member George Waterston, who still heads the division under the Stewarts brand.
After moving from George Street, the company operated from a base in Marionville Road for many years, where the previous owners operated a management buy-out from the Stewart family in 1972.
"It was almost before there were management buy-outs – they were ahead of their time," explains managing director Terry O'Hare, who led his own management buy-out in 2004.
In 2007, the company moved to new premises in Livingston – but retained the Stewarts of Edinburgh name.
