Exploiting Distress for Consolidation

“Production remained a key problem in all the Sassoon mills. The manufacturing boom had stimulated such a demand that it was not always practical to wait for new factories to be built and equipped. Semi-derelict businesses - one of them had been wound up four times in the past twenty years - were therefore bought up cheaply. Ancient plant operated by steam engines and wheezy boilers was scrapped, and the latest machinery imported from England at whatever the cost. Efficient planning by Manchester experts was backed by dedicated Jewish overseers who gradually overcame the endless frictions and chaos of the old Managing Agency system. Working on similar and parallel lines, the two Sassoon firms soon went ahead of all their rivals, including Tata himself, who might have given them much severer competition had he not turned his attention to the richer fields of iron and steel. Even so, his early supporters had no cause to complain. The original £50 Empress Mill shares would be worth £700 by 1914!”

“The Sassoon firm had unique advantages. Few competitors were as closely integrated or enjoyed a more reliable information service. It preserved them from the fate which overtook so many others as a too eager alchemy went to work in mid-century Bombay. They resisted dazzling new prospectuses and preferred to buy up businesses wrecked by gamblers or badly run by indolent, near bankrupt owners.”