Cutting land inventory to zero in the oil shock, and waiting for the bottom (1975)

A company able to stop, choosing its next model

The core of this decision appears to lie less in being right about the market than in the fact that the choice to stop the business could actually be taken. There must have been no shortage of managers at the time who expected prices to fall; they kept buying anyway, because stopping immediately breaks the arithmetic of revenue against payroll. A company that used no commission pay and held its growth to 20–30% a year even in good times had, in that sense, kept room to stop as a matter of ordinary design. Rather than judgement displayed in the oil crisis, this is closer to an example of peacetime design taking effect in the middle of one.

That said, waiting and buying back does not always work. If prices do not recover, the period of stoppage is simply lost opportunity. That the 1975 restart proved well timed shows this company had a feel for buying land — yet its subsequent path went the other way. It expanded into land utilisation, rental management and finally the Thincs business of holding landowners’ assets: models that earn without carrying inventory at all. Whether the 1973 experience of the weight of inventory is the origin of that choice remains one of the questions to hold in mind when looking at the group’s composition today.