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Fishing and philosophy seem to go hand in hand. Even Karl Marx had a word to say about it: “Sell a man a fish and he eats for a day. Teach a man how to fish and you ruin a good business opportunity.”

That isn’t true for the merchants who sell £570m of fishing tackle in the UK a year. Angling is a passion for some 3m people in England and Wales, making it one of the nation’s most beloved participatory sports. 

But passion can only take you so far in business. Steve Gross, founder and outgoing chief executive of retailer Fishing Republic, who has been tying flies professionally since he was 13, found that out last week.

Mr Gross set up Rotherham-based Fishing Republic in 1985. In 2015, he floated the business on the Alternative Investment Market at 15p a share, valuing the company at £3.6m.

Within two years the company had expanded from seven to 19 shed-like stores and won backing from former retailing wunderkind Sir Terry Leahy, who owns 7.5 per cent of it. All was going swimmingly. Revenues were up 64 per cent in the half year to June. With shares at 40p-plus, the stock was valued at more than 40 times earnings forecast next year. 

And then last week, the company warned unexpectedly it would lose money this year. Sales in stores open more than half a year slipped 13 per cent in October, as competitors cut prices to poach market share.

However hooked anglers are on their sport, they still behave like rational economic beings. More profitable sales through the company’s website were also disappointing. Too many products are still sold via third-party retailers, such as Amazon and Ebay, on skinny margins.

Mr Gross quit as chief executive. His wife Zoe and another director quit the board. Fishing Republic has started a strategic review, which means anything from raising money to disposals. The shares halved to 19p in a week. 

The contrast is stark with rival Norfolk-based Angling Direct, which hoisted its rod above its 20th store last week. Its shares are up 20p to 80p since its Aim float in July raked in £7.4m for expansion — about five times the amount that Fishing Republic took from its IPO in 2015. 

Fishing Republic raised a further £3.75m from Sir Terry and other investors last year. But Mr Gross might wish he had asked for more if it would have helped him see off Angling Direct before it came to the market. 

The Norfolk group is chasing the same strategy as Fishing Republic — consolidate a fragmented market, create a network of “destination” stores and expand online. But it has pursued its goals as aggressively as any pike or zander. 

“It is pointless raising cash and have it sitting in the bank,” says Darren Bailey, boss of Angling Direct and also a keen fisherman. Selling fishing clobber is niche, but it is still retailing, he notes. He is clear about the need to be targeted and sharp on price to lure in customers.

“It is difficult to grow margin and expand market share — particularly in these conditions,” he says.

The numbers of anglers have not risen in recent years, he adds. And when it comes down to it “you don’t need to spend a lot to go fishing. All you need is a bit of bait”.

Store openings have been focused in areas with high densities of anglers. And while it helps to share your customers’ enthusiasm, he says, “there are times when you have to lose the passion and rein it in”. You cannot stock everything, he explains.

It is early days but the plan seems to be working. Half of Angling Direct’s total sales come through its website. It sells little via low-margin websites such as Ebay. And the average size of its shoppers’ basket is £97 compared with Fishing Republic’s basket size of £71. Analysts forecast Anglo Direct’s underlying earnings per share will rise about 45 per cent to 1.9p in the year to January. 

Still, its shares are on a sporting rating at 40 times earnings and it competes with some 2,000 UK businesses flogging piscatorial tackle. As one of Shakespeare’s fishermen said in Pericles when his fellow wondered “at how the fishes live at sea”:

“Why as men do on land: The great ones eat up the little ones”. 

kate.burgess@ft.com

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