The entrepreneur John Bloom, who has died aged 87, drove a coach and horses through the complacency of the British retail trade in the 1960s, with cut-price washing machines, dishwashers, and eventually even package holidays. He transformed the way white goods were sold, through direct sales and by cutting out the middle men – not only the retailer but also the wholesaler – making him a multimillionaire by the age of 28. But he collided with both the law of diminishing returns and the law of the land, resulting in a fall as spectacular as his rise.
Bloom’s extraordinary business career began in the early 50s, when he was in the RAF. Initially based in Wiltshire, he and his comrades relied on a local coach company for transport to London on short-leave passes. Bloom had a friend in his native Hackney, east London, who ran a similar business, and the pair offered to undertake the work at half the price. Sued by the undercut contractor, Bloom won and was told by the judge: “It’s no sin to make a profit.” This became his mantra as well as the title of his 1971 book.
Born John Bloomstein to Orthodox Jewish parents – his father was a tailor who had migrated from Poland to London – John left Hackney Downs school at 16, enlisting within two years after various short-term jobs.
On leaving the RAF, he became a door-to-door salesman for a company that sold Dutch-made washing machines. Thus began the germ of the approach to selling that would make him famous. Already an accomplished salesman, Bloom persuaded a Dutch firm to supply him directly with twin-tub “Electromatic” washing machines to sell for 39 guineas – half the going rate.
The door-to-door approach was soon dropped in favour of a garish advertisement in 1958 in the Daily Mirror. Some 7,000 readers used the coupon in the advert to order a home demonstration of a machine, and the Bloom phenomenon took off, aided by apparently affordable hire-purchase deals, which often doubled the total price paid.
Bloom gained 10% of the market and was selling 500 machines every week. The next step was to cut overheads even further: he would make his own machines. All he needed was a factory. In 1960 he took over the shaving company Rolls Razor, which was on its last legs at the time. He merged it with his own company and became managing director of the joint venture with a majority shareholding.
Joining forces with the Colston company, which made compact dishwashers, enabled Bloom to offer cut-price dishwashers from 1962; a year later he was able to offer Prestcold refrigerators, all at about 50% of normal retail prices. The rollercoaster ride continued as Bloom moved into trading stamps and television rentals. He also cornered the market in cheap package holidays in Bulgaria, whose government appreciated the hard currency generated by minimal investment on their part: the hotels already existed as part of a reward scheme for their own workers. They could readily absorb thousands of Britons who paid just £59 for two weeks by the Black Sea.
Bloom had undermined the cosy world of resale price maintenance and other restraints on competition but eventually sheer bad luck compounded his impetuosity, indiscretion and over-confidence and led to his downfall.
The saturated market for cheap white goods shrank as traditional retailers fought back, taking losses to undermine Rolls Razor. Aggressive marketing met the law of diminishing returns. Bloom’s unit costs rose and then, in 1964, an 11-week postal strike killed coupon sales. Seeing which way the wind was blowing, bankers withdrew support for his hire-purchase scheme. The Board of Trade took an interest in suspected illegalities and Rolls Razor shares collapsed. The company went into voluntary liquidation in summer 1964 with debts of £4m.
By this time, Bloom’s lifestyle included a flat in Park Lane, a villa in the south of France, a large yacht and a Rolls-Royce. He threw one dazzling party after another, inviting a broad range of celebrities, from politicians to pop stars.
He married Anne Cass in 1961, but a year later had an amorous encounter with Christine Holford, the 18-year-old wife of club-owner Harvey Holford, at a party at the Riviera house of Richard Reader Harris, a Tory MP who was a director of Bloom’s companies. A few weeks later Holford shot his wife five times and, at a sensational murder trial, was convicted of manslaughter on the grounds of diminished responsibility (provocation). The scandal inevitably rubbed off on Bloom, but the money continued to flow for a couple more years.
His own protracted day in court came in autumn 1969, when the Board of Trade’s 16-month investigation of Rolls Razor’s collapse led to a series of charges under the Companies Act. He pleaded guilty to two offences: making a false statement on a company account and attempting by false statements to persuade others to buy shares.
He was fined £30,000 and threatened with two years’ jail if he defaulted. He was also banned for five years from being a director of any company quoted on the stock exchange. But the judge remarked that he had been impressed by Bloom’s efforts to compensate from his own funds people who had suffered financially in the Rolls Razor debacle. And the financial press reminded readers that Bloom had provided a much-needed blast of fresh air, transforming British retailing, and boosting the economy in the process.
Having been made bankrupt around the time of the trial, Bloom disappeared from public view. But not for long: in 1972 he opened a Tudor-themed restaurant, called 1520 AD, in London. He opened another in Los Angeles, and it became a franchise across the US until it went bust in 1979.
The eateries were overtly sexist establishments presided over by a “Henry VIII” figure, where customers, especially women, were pilloried and pelted with buns if they did not enter into the spirit of things.
After that Bloom, accompanied by Anne and their two children, moved to Mallorca, where he could not resist opening a piano bar (later sold to associates). He remained a marketing consultant in a quiet retirement, eventually joining many other British expatriates, some more notorious than himself, in Marbella, Spain.
He is survived by Anne, their daughter, Nicole, and son, Darren.
• John Jacob Bloom (Bloomstein), businessman, born 8 November 1931; died 3 March 2019