Saga’s boss slams previous private equity owners as he admits the company has lost its way
Saga’s boss slammed its previous private equity owners as he admitted the company has lost its way.
Euan Sutherland, who joined the over-50s insurance and holiday specialist in January last year, criticised a lack of investment following its £1.35billion takeover in 2004.
Saga is now worth just £430m, a fraction of that, having been loaded up with debt and then floated on the stock market in 2014 by private equity owners Charterhouse, Permira and CVC.
Speaking out: Euan Sutherland criticised a lack of investment following its £1.35billion takeover in 2004
Shares are down 90 per cent since their peak in 2016.
Speaking as he launched a major rebranding in a bid to reconnect with older customers, Sutherland said: ‘I think for the last probably ten years, maybe longer than that, we have not modernised as a brand.
‘Our customers have moved on with their lives and are contemporary to 2021. We’ve fallen behind. So part of what we’re trying to correct is the perception of the word Saga and the brand.
‘I think it was because of private equity ownership, which was just optimising for that year and not investing in the future. As a business, it suffered from different ownership structures for periods of time.’
Saga is just one of a number of firms that have found it difficult under private equity ownership.
Others include Debenhams, Silentnight, Bernard Matthews, Cath Kidston and Toys R Us.
There are mounting concerns over private equity’s influence over the British economy.
A host of firms have been targeted by the industry since the start of the pandemic, including supermarkets Asda and Morrisons, security firm G4S and defence giant Ultra Electronics.
In a bid to revive Saga and its brand, Sutherland said the company needs to see its customers as ‘experienced’ rather than just ‘old’. The 52-year-old father of three also wants to tap into the huge extra wealth gained by retirees who saved the most cash during the pandemic as the economy shut down.
‘People are living longer than ever before,’ he said. ‘They are working longer, they are helping their families, they are contributing to society.
‘We know our customers do not feel old – they feel as if they are experienced. They have lived full lives, have so much to give and fully intend to make the most of each and every day.’ Saga is battling to recover from the Covid19 pandemic which left its two cruise ships tied up at Tilbury Docks for much of the crisis.
They only took to the sea recently as restrictions eased. During that time, the ships needed to be continually serviced, ensuring long periods without moving did not cause lasting damage.
Sutherland said: ‘These ships are like aircraft – they’re not meant to stop.
‘They’re meant to pause for the day and move on. So, we had to keep them functioning, including things like getting barnacles taken off the boat.’
Bookings have been strong since restrictions eased and around 70 per cent of customers who booked travel during the pandemic retained their bookings though some had their dates moved four times. Sutherland criticised the travel restrictions imposed by the Government.
‘I don’t think the red, amber, green policy helped,’ he said. ‘It was totally confusing. I think our customers gave up for a while, going, ‘I just don’t know how to navigate it’. As we come out of that now I think we’re in a much better place.’
Sutherland said the country’s shift to staycations is unlikely to continue, with people keener to get away than stay in the UK.
He said: ‘The feedback from our customers is that they can’t wait to get away.’
LV CHAIRMAN FACES GRILLING BY MPs
MEMBERS of Parliament will grill controversial LV chairman Alan Cook on Friday over the mutual insurer’s proposed sale to American private equity firm Bain Capital.
Cook – who was the boss of the Post Office from 2006 to 2010 when the wrongful prosecution of sub-postmasters began – will be quizzed on the sale by the All Party Parliamentary Group for mutuals. The MPs issued a scathing report in April that found the £530m deal is being pushed through by bosses while members are left with a ‘lack of information’.
Many have suggested Cook, 67, and LV chief executive Mark Hartigan could make millions if the deal goes through. The All Party group’s chairman, Gareth Thomas, said there are ‘many unanswered questions’ about the deal.