Troubled Coop Fights Off Funeral Suitors
According to Sky News, the Coop Funerals are turning down offers to buy them out from the Coop Group which has to sell assets to plug some of the black hole in the groups finance (in the Coop Bank). Apparently there have been several serious offers for the funeral arm which has a substantial share of the UK funeral and prepaid funeral plan market, though Coop Funerals don’t have full national coverage – neither do many of its’ competitors. Maybe they would be a good fit with a commercial rival and offer the first truly national service from a single company (there are national services, but operated by member groups rather than giant funeral conglomerates.)
Coop Funerals Not For Sale.
At least, that’s what they say – whether that is an attempt to bring more purchasers out of the woodwork to join in the auction for bits of the Coop, only their management know! Interestingly, one of the alleged suitors was the firm which brought Dignity Funerals, one of the Coops biggest rivals in both the prepaid and at need funerals, to the Stock Market. Clearly they think that they can make a second killing in the funeral directors market, especially where the firm is highly aggressive in the prepaid funeral market, which is where future profitability can be guaranteed – or lost, if the pricing structure turns out to be uneconomic.
According to Sky, the groups problems stem from under capitalisation of the Coops banking division, and the Coop are being forced to restructure to plug the hole. First to go is apparently the insurance division, which was once a proud market leader with a large national sales force serving Coop members, but is now (like most UK life and pensions insurers) a shadow of what it once was in operational terms.
From what we understand, much of the Coops black hole is to be plugged by forcing members who lent the Coop money on what they considered a low risk basis to swap their low risk “deposit” for high risk shares. Unsurprisingly, affected members – many of whom are way past retirement age – are very unhappy with the treatment they are receiving from what is supposed to be a mutual organisation established for the sole purpose of benefiting its’ members. But needs must when the devil drives…