Thorn in the Flesh (Clara’s Coffee Ep. 4)

 

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Nigel was the first in the office on Monday morning.  He sat back in his chair, gazing out across the ornamental gardens in the town centre. He usually found the view calming but that day his mind was in turmoil.

His thoughts went back to that morning three months earlier, his first day back in the office following the trip with Melissa to look at the potential development sites. He had looked out at the view then, whilst running over in his mind the priorities that lay ahead.

The amount of work that stretched ahead on the expansion plan was formidable; the saving grace was that with the benefit of a detailed project plan, barring calamities, it should be a fairly straightforward process.

The next issue was, having spent the remainder of that weekend ploughing through the last five year’s accounts for Clara’s Coffee, it was clear that there was a significant problem. Despite a steady growth in turnover, there had been a consistent and not insignificant fall in their operating margins. Something was not right and, if not addressed, could pose a threat to the expansion plans.

But the one issue that seemed to be clouding everything that day, was his relationship (or non-relationship) with Melissa. After the events of their final evening together and his outpourings to her (both of which he had not forgiven himself for), the drive back on the Saturday morning had been, frankly, painful; silent, embarrassing & chastening.  There was no doubt in his mind, however, that he had fallen for her and couldn’t bear the thought of the relationship (if there could be one) being over before it had even begun. To hell with it, he thought. Time to put my thoughts to her.

Later that same day, he had called Melissa and they met in his office over a pot of Carla’s finest Jamaican Blue Mountain.

“How would you like to work yourself out of a job? And into a more exciting one where you can really find yourself?  One where we will still be working together but will be free to pursue a relationship without guilt or worry.”

“I don’t follow you,” responded Melissa “how would that work?”                           “Look, I said I’m swept away by your professionalism. It’s the sort of competence that comes from your innate ability, personality and qualifications. I can only see those qualities being enhanced by the experience you are gaining in your new role.”

“Thank you.” She muttered embarrassed & blushing.

 “I say that independently of my feelings for you and my desire not to have any harm befall you, whatever happens here at Clara’s. My feeling for you are very strong but, I must stress, they are very separate from my views about you as a professional.  And I hope that in time you might feel the same way even.”

Melissa gave a shy smile. “I’m truly flattered in your confidence in me. And I also hope we can get to know each other better.”

“OK. As I said on the way back on Saturday, there are members of the family who are going to fight this expansion and the consequent dividend reductions tooth and nail. One of the tasks we’ll be working on might well turn out to light the blue touch paper. And any hint of impropriety on our part will no doubt be exploited.”

Melissa nodded.

“Look, there are three priorities for us to concentrate on in the next few months.

“Number one priority must be the opening of our first new outlet and I think we’re both agreed that Chester makes the most sense.”

Melissa nodded enthusiastically, “Yes, it’s a perfect location and it’s close enough to manage easily from here.”

“Agreed. Secondly, as part of that project, I would like you to develop, from the experience we gain from Chester, a full project handbook that will serve as a guide for all the subsequent new outlets.”

“But I’ll have all the experience under my belt as a result of Chester and will simply use it to work on the others.”

“That’s precisely why I asked you how would you like to work yourself out of a job. This job.”

“Now, you’ve lost me!”

Nigel smiled. “You heard me announce at the board meeting that I will be personally funding a new charity to identify and develop the entrepreneurs of tomorrow. I think that you will be ideally placed and qualified to take on and lead that project for me. It will be a full-time role outside of Clara’s that we will work on together.”

Melissa blushed again. “I’m flattered, thank you, I think I’d like that very much. But you said three priorities and you’ve only mentioned two?”

“I’m coming to that. First, that new role, that promise, will be your fall-back, your choice, whatever happens in Clara’s over the next few months. Your guarantee of career development and a future we can work on (together I hope). But I’m also going to ask you to help me with something else.”

He went on to explain the fall in operating margins.

“As an essential part of the expansion planning, you’ll need to produce a detailed budget of all costs. You’ll also need to identify the full range of our suppliers and assess their capability to support the growth of our business. As part of that process you’ll also be working with me to identify any areas where costs have been moving adversely and by enough to account for the fall in overall operating costs. Your experience in accounts will be invaluable in the process. But you must keep this secondary reason strictly between ourselves. I don’t wish to get into it now and pre-judge matters but it might produce, shall we say, some unfortunate outcomes.”

“When do I start?”

“Now, today. I’ll be letting the other members of the board know of the decision over Chester. But to repeat, no mention to anyone else of the investigation into margins. I’ll also expect you to update me step by step.”

The next few weeks saw the offer for the property in Chester accepted, architects & designers engaged to plan the internal modifications and a local recruitment agency briefed on new staff requirements. A replacement for their York branch manager was identified so Alan, the existing branch manager, could move over to Chester to oversee the staff selection and launch.

Melissa made excellent progress on putting together a list of key suppliers and holding briefing meetings and negotiations with them. Nigel was delighted with the progress but whenever he enquired about what they now called Project Gap, she merely replied “I’ve got it all in hand and I’ll be reporting to you in full, very shortly.”

Several weeks later, Melissa called and asked if they could meet off site for her to brief him on where she had got to on Gap.

“OK,” Melissa began as they sat together in a small tea rooms in one of the villages on the moors, “This is what I’ve done so far,” and passed over a thick file.

“Firstly’” she went on “you’ll see that I’ve been through all the operating costs, category by category, looking at how they’ve moved over the last 5 years. You’ve got all the detail in the file, but basically there are only two categories with combined adverse variances over that period that approximate to the total shortfall.”

“Go on.” Nigel responded “What did you find.”

“The first category is business rates which we can’t do a thing about.”

“And the second category?”

“Food and beverage. As far as such categories as flour and other baking ingredients sourced locally, they have been kept well under control, as have the costs of British beers and soft drinks.”

Nigel nodded.

“Now it gets interesting. Nearly all of the volume coffees we source have had a net cost increase due to the fall in the Pound versus the US Dollar. This has accounted for approximately all of the adverse variance in costs over the period.”

“Bad, but I can’t see what we could have done about that.”

“Hold on. Moving on, as you know, all of the wines we sell are French and Italian. Over the last 5 years are cost prices have remained stable.”

‘At least that’s something.” Chipped in Nigel.

“Wait! Both the French Franc and the Italian Lira have fallen steadily against the Pound in the last four ~ five years. So, we should have been paying steadily less for these wines, as the total fall in both currencies has been between 30~40%!”

 “What!” Nigel exploded leaning forward.

“Wait, it gets better…or worse, I should say! We buy all our wines from two separate companies, one for the French and the other for the Italian and the pattern is the same – no price decrease.”

“Bloody hell!” exploded Nigel.

“Now, I checked Companies House for the details and both companies are, in fact, owned by the same holding company (Franco Italia Wines, based in Wetherby) which has one main shareholder, a Mr. Penn Saunders. If we had been able to purchase in line with the increase in the value of the Pound, it would wipe out the other adverse variances and show an overall fall in operating costs!”

“Christ! I suspected something must be going wrong but this is clear cut. I have to get to the bottom of this. Now you know why I was concerned about you.”

“I understand.” Sighed Melissa

“OK, you’ve done a fantastic job on these costs. Back off on the enquiries and treat the wine supplies for Chester as you would for the other suppliers. Concentrate on getting Chester launched successfully (and let me see the advertising & PR plans as soon as you’ve got those put together). Leave these cost anomalies to me.”

Two days later, long after he thought everyone would have departed for the day, Nigel made his way down the stairs intending to have a trawl through a few records in the purchasing department himself. Why their IT system was so fragmented was beyond him

Hearing raised voices, he stopped by the door to the administration department.

 “I tell you’” boomed out the voice of Peter Chancellor “he’s a bloody thorn in our flesh! Not intent with ruining a respectable old family firm, he’s out to impoverish the rest of the family who’ve worked so bloody hard all these years!”

“Hear, hear!” responded a voice he recognised as Oliver Rathbone, Purchasing Director and brother of Marion Chancellor. “And that bloody Fernley-Whittingham girl. You do realise that she’s been snooping around our suppliers. I caught her in my department on one of the computers. Came up with some cock and bull story she was looking for an old file on one of the properties, something about business rates. But when I checked the search records on the computer, she’d been ploughing through supplier records and costs. Including…the wine companies!”

“Oh, Christ! Look, we’ve got work to do. And I wouldn’t be surprised if he’s bedding the girl. The sooner we part company with the pair of them, the better!”

Nigel tip-toed back up the stairs. Things were much worse than he had imagined.

Author: Tony

Photo by Hermes Rivera on Unsplash

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