Naively, I thought that was just normal, so it was quite a shock when I opened another half dozen offices and they all started to lose money.
Within three years I had ten branches, but only two were profitable." With the newer branches struggling, Reed sought the help of an advertising agency newly-founded by Maurice and Charles Saatchi; Reed later claimed that their work had no perceptible impact on the business.
In 2014 Alexa ranked uk as the UK's largest employment agency website.
REED Group claims 3000 employees across 450 business units and 116 locations worldwide, in 20 recruitment specialisms.
Alec Reed used part of his flotation windfall to found Reed Business School in 1972.
Alec Reed later described the flotation of Reed Employment as his greatest mistake in business, citing the administrative and financial burdens of running a public company: "Everything you may have heard about the city’s obsession with short-term performance is true..become a metaphorical unpaid greyhound on a racetrack called the stock market." Reed has said that he started his Medicare retail pharmacy business partly to help maintain Reed Employment’s stock price during slumps in the wider economy.
Copying the example of rival Alfred Marks, Reed began moving his offices to ground floor locations on main shopping streets, such as London’s Oxford Street, so that they could be more easily seen by the public.
The end of the 1960s saw a bull market in UK share prices, prompting stock market flotations by a number of rival employment agencies, including Brook Street Bureau and Alfred Marks. Although profitable, financing the expansion caused cash flow difficulties.
In 1972 turnover doubled to £10m, with profits just under £1m, helped by rising demand for temporary workers and by inflation.
By 1975 profits had halved, partly due to the 1974 oil crisis.
These were compounded when the firm’s bank began to reduce its overdraft facility, which the firm had been using as working capital.
Faced with a shortage of capital, Reed decided to float the business.
At their 1980s peak, the shares increased to 150 times their offer value; they averaged 80 times offer value for most of the 1990s.