The higher they are, the harder they fall. Yell Group, parent of Yellow Pages and Yell.com, once swam with the whales of the FTSE 100. Now it’s a minnow with a market capitalisation of £250m that has just been demoted to the small caps market. And even there, it’s likely to sink rather than swim. According to Numis Securities, which follows media stocks: “Yell remains our least preferred stock in the sector and has to be seen as a high risk, speculative investment.”
There are technical reasons for this sorry demise, among them a debt pile of nearly £3bn and the ill-advised international expansion that accounts for it.
But really, this is a fable about brands that fail to adapt to the times. It’s not that the publisher of the weighty yellow door-stopper didn’t see the internet coming. It did: Yell.com is testimony to that. Rather, as a business laden by legacy it failed to explore the opportunities fast enough. And as a result, it has been beached by Google and other search engines. If you want to find your way to the butcher, the baker or candlestick maker these days, your first port of call is likely to be Google Maps. Soon I suspect local traders will be introduced to the joy of low-priced apps which, linked to search and GPS, will be all they need. Indeed, I believe the Chelsea Apps Factory, set up by Mike Anderson, is looking into that prospect right now.