Cavenham Foods (also known as Cavenham) was a retail and food processing conglomerate started by Sir James Goldsmith in 1964. The company started out as a group of struggling UK food brands, including Carr's and Hollands Toffee purchased and brought together by Goldsmith. By 1973, the company had grown extensively with a series of take overs, and operated grocery stores under the Home and Colonial Stores, Lipton and Maypole brands in the UK, Grand Union in the US, UK brands Bovril and Ambrosia and continental brands Melchers, Amora, Synthol and Unimel amongst others. The company would become Europe's third largest food processor after Unilever and Nestlé. From 1978 onwards, Goldsmith started to break up Cavenham and by 1986 the company was put into voluntary liquidation.
Early history By 1964, Sir James Goldsmith had already built and sold several businesses with differing success, including Laboratories Cassene and Lewis & Burrows (which would become Mothercare). At the time he owned a French pharmaceutical business called Gustin-Milical, which produced a slimming drug called Milical, as well as self-tanning product Right Tan which were selling well across Europe. He also owned 20% of Procea Products, a British firm that made slimline bread that he purchased in 1963 from the Doughnut Corporation of America. However Goldsmith was short of funds to expand his business further, and was introduced to Great Universal Stores Sir Isaac Wolfson by Charles Clore, who loaned Goldsmith £1 million at an interest rate of 100 percent.
With this injection of cash, Goldsmith created a private company, Cavenham Foods to start making further investments. The company was named after his grandfather Adolphe's estate in Suffolk to which his father Frank would talk fondly of. Cavenham's first investment was to purchase a controlling shareholding in chocolate manufacturer Carsons. Carsons, which had started life as H J Packer in 1881, was financially not in good place having failed to pay dividends for two years and recording a loss of £50,000 in 1963. Goldsmith transferred his shares in Procea Products, which had been valued at £310,000, into Carsons which gave him a 55% shareholding. By June, Carsons had offered to not only purchase the 80% of shares they did not own in Procea Products, they had also offered to purchase a smaller confectionery business called Yeatman for a combined total of £1.5 million. It was during the Yeatman deal, that Goldsmith met Roland Franklin of merchant banking firm Keyser Ullman, who Yeatman banked with. Goldsmith liked Franklin, and with it Keyser Ullman became Cavenham Foods merchant bank. After these deals were completed, Cavenham then expanded again by purchasing controlling shares in Carr & Co, the biscuit manufacturer, after a takeover battle with J. Lyons and Co., and J A & P Holland, a confectionery group that had overstretched itself trying to become a group big enough to take on Cadburys or Rowntree's. Described by the Daily Mail in 1961 as the world's biggest toffee manufacturer, Holland's had diversified into boiled sweets, liquorice, chocolates, paper, printing, packaging and plastic manufacturing.
In January 1965, the Sunday Times first reported on Cavenham Foods (which now had shareholdings in three public listed companies: Carsons, Carr & Co and J & A.P. Holland) and Goldsmith, commenting that they believed, In June 1965, Goldsmith with help from Roland Franklin and Keyser Ullman, started to implement a plan by first selling the Carlisle factory of Carr & Co for £600,000 and leasing it back for £63,000 a year. The money gained by the sale was used by Carr's to purchase Cavenham's shares in Carsons, with Carr's then purchasing J. A & P. Holland from Cavenham. Carr & Co then changed their name to Cavenham Foods, and so Cavenham became listed on the London Stock Exchange. The deals were not illegal at the time, as Charles Raw of the Sunday Times stated later, but while Carr & Co paid cash for Goldsmith's shares via Cavenham, Carsons and Holland's other shareholders only received paper shares in the new company. It was largely because of deals like this that the London Stock Exchange would change its rules. Cavenham Foods at this point employed 6000 people, with a turnover of £30 million and assets of £7 million but was making no profits. However Goldsmith was bullish to Cavenham shareholders declaring that the company would make a profit of £215,000 in its first year. The new company impressed the Sunday Times,
The public company in the 1960s Goldsmith warned shareholders after the merger that
Shortly after completing the merger of the Cavenham Foods subsidiaries, Goldsmith and his distant cousin Alexis de Gunzeberg purchased a 20% shareholding, through their new company Cavenham Investments, in a tobacco firm called Singleton & Cole from Jim Slater. The pair stated publicly that Cavenham Foods would have the option to purchase the shareholding at the same price they had paid. Goldsmith at first tried to complete a friendly takeover offer, but Singleton's chairman George Waddington was not interested and brought in merchant bank S. G. Warburg & Co to fight Goldsmith's bid. The Sunday Times at the time reported, After further battles between the board and Goldsmith, Goldsmith upped his offer in May 1966 to two Cavenham Foods shares for one of Singletons, valuing the business at £1.4 million, which Waddinton reluctantly accepted. Unfortunately, the addition of Singleton & Cole didn't help Cavenham Food as it added another company that was struggling. However the company did just make Goldsmith's profit prediction, making a profit of £216,749, though after taxes the group only made £33,000 net profit. At this point, Cavenham had sold the paper business acquired through Hollands, and closed five of the combined groups 11 factories, concentrating them in the remaining sites.
However the reorganisation of the company was still ongoing, and Goldsmith's strong predictions of continued profits quickly disappeared, that by Autumn the company was already £100,000 down. The dietary products, Slimcea and Procea had increased sales, but Singleton & Cole was struggling and so was the wholesaling business. To try and help the business, Cavenham agreed a merger of its Cavenham Confectionery business with the confectionery business of Perrier, who owned brands including Menier and Lindt. However, this deal, which took the confectionery arms losses off Cavenham Foods accounts and kept their share price up was not enough, and the company was heading towards a £1 million loss. Although Singleton & Cole was generally losing money, two subsidiaries were actually increasing sales. The two companies produced Snuff, which was made from waste tobacco bought at a low price, and then sold with high margins. Goldsmith put the companies in the hand of a broker to find a buyer, and American business Conwood Corporation expressed interest. Conwood sent business consultant John Tigrett to do a deal. Goldsmith wanted £2 million, but Tigrett did not believe the figures stacked up. Instead of buying the whole business, Tigrett agreed on behalf of Conwood to buy half but this did not help Cavenhams financial position. However Tigrett had a plan, and with Goldsmith and de Gunzeberg they went to Switzerland where they created Conwood SA, a 50 / 50 venture owned by Cavenham & Conwood, which then borrowed money from Swiss banks to purchase Cavenham's Snuff companies for £811,241. Cavenham had only valued the businesses at £76,100, so had made a profit of £730,000 and still owned a 50% share in the business. However this deal had only put a dent in the company' losses, and Roland Franklin, and David Eastman, of Cavenham's stockbroker Joseph Sebag & Company told Goldsmith that he needed to put in £500,000 cash or the company would be finished. Goldsmith did not have £500,000, but he did have his successful French pharmaceutical company Gustin-Milical, while business partner De Gunzeberg had several assets which they pledged against loans from several French banks. The loans were made to their jointly owned Cavenham Investments company, whose only assets were shares in Cavenham Foods, which gave the £500,000 as a gift that Goldsmith stated was to enhance that company's trading position. The gift meant Cavenham Foods was still financially able to pay their bills, but could not pay a share dividend and made a tiny net profit of £7,157 at the end of the 1966/67 financial year. However the company auditors, Price Waterhouse stated that Goldsmith's financial shuffling, which Goldsmith had stated in the accounts was justified by the prospects of the group was
In late 1967, Goldsmith and De Gunzeberg purchased a 45% share of French property and investment firm, Union de Transports et de Participations for £300,000 from failed financial group Union Financiere de Paris, which would later become part of Cavenham's future. Cavenham Foods, though was still struggling. The business now split into bakery, confectionery, retailing, wholesaling, tobacco and grocery was by 1968 looking at making a loss. The retail business, Hayes Lyon, was a chain of twenty two newsagents in the North West that J A & P Holland had owned, was being reorganised under former Co-op manager Jim Wood, but the wholesaling business (created by the merger of J A & P Holland and Singleton & Cole's wholesaling arms) was in bad shape, with Goldsmith cutting his losses and selling the business. The Southern and Midland based sites were sold to Palmer and Harvey, while the Northern warehouses were sold to Robert Sinclair & Company (part of Imperial Tobacco) for a total of £2.4 million. By the end of the financial year, Cavenham Foods had lost over £500,000, but positively Procea had more than half of the UK market for low-calorie bread and seen its profits grow from £1.1 million in 1965 to £2.4 million by 1968. Other good news for Goldsmith was Jim Wood had made the newsagents profitable, with Goldsmith buying a chain of 60 further newsagents from a receiver, called Alex Shops which Goldsmith sold 11 of the stores to recoup the purchase cost. However, in France, Goldsmith and his business partner de Gunzeberg expanded their interests. During their purchase of Union de Transports et de Participations, now called Union de Participations (UdP), they met Madame Gilberte Beaux and Count Thierry de Clermont-Tonnere who were tasked to selling of the assets of the bankrupt Union Financiere de Paris. They both had impressed Goldsmith, and he asked Beaux to join his company, but she had not completed the sale of the bankrupt company. Goldsmith said he would buy the remains of the company, though he did not have any funds and asked her to use her contacts in banking circles to raise the loans to purchase the business. Beaux, with assistance of de Clermont-Tonnere organised the loans for Goldsmith. After the purchase Goldsmith and de Gunzeberg moved their 80% shareholding of Gustin-Milical, which owned 15% of Cavenham's shares, into Union de Participations, making them a 70 percent paper profit. Union de Participations would in October 1968 purchase the French Bank and property group, Societe Generale Fonciere, which was then renamed Generale Occidentale. Goldsmith and de Gunzeberg transferred their shareholdings in Cavenham Foods to Union de Participations.
By the summer of 1969, Cavenham had finally made a profit, with Goldsmith telling shareholders
The company started expanding by purchasing in October 1969, Anabbs Ltd, a chain of newsagents in Greater London from Davies Ltd which tripled the retail business turnover. The partnership with Perrier was dissolved in Autumn 1969, and Cavenham Confectionery was sold to Conwood SA for £1.2 million, the company owned 50/50 by Cavenham Foods and Conwood Corporation. By December the company had announced half year pre-tax profits of £458,000, with The Financial Times predicted that