Dore Australia go into administration? *Updated 1, 2, 3, 4 ,5 ,6, 7*
Posted by gimpy on May 17, 2008
In January I wrote this post on the abbreviated accounts for Dore Dyslexia, DDAT (UK), which revealed a gaping black hole of -£6.8m in their current account accumulated loss of £6.8m. It seems that it is not just Dore in the UK that is in financial strife, Dore Group (Australasia) Ltd have apparently gone into administration. This was posted recently on the Dore talk forums,
We just recently had a DORE representative come to our house to discuss the program for my son.
After convincing my husband that it was a good idea to start the program, all DORE clinics have been closed Australia-wide!!! Apparently they have gone into liquidation?!?!?
I could not believe my luck as I was looking forward to starting the program. Just wanted to express my complete frustration, hopefully this does not happen anywhere else in the world. Lucky we had not paid yet!
It is tempting to view this as schadenfreude as many readers of this blog will see Dore as little more than a pseudoscience that charges vast amounts of money, up to £1700, for something that doesn’t work. However, it is clear that there are many employees and customers of Dore that care deeply and passionately about the programme and are committed to its success. It is these people who have been let down by Dore and its founder, Wynford Dore. I have received the following information about the situation in Australia from a Dore staff member,
Dore Australia have just gone into receivership. Staff (including myself) have not been paid for the month of May and turned up for work on Fri 16th to find all clients cancelled and to be told via Australia wide teleconference that they were to go home and would find out in a week if their contracts would be terminated. We may or may not see our money.
We were given no warning, in fact had we had any idea, we would not have been signing new people onto the program. In my clinic, we were signing new people on and taking their money on Thurs 15th. The day we went into receivership. We were made to look like crooks by taking money for a service we now can’t provide. I am angry for the clients.
I want to know, where is Wynford in all of this. We were told he would always support us, yet we have heard nothing? I feel betrayed as I and the rest of the staff truly believed in the program. We saw first hand the results it can have.
This staff member then goes on to elaborate,
the thing that really makes us angry is the fact that they must have known for weeks that this was coming and yet they let us continue enrolling new clients. That is the height of unethical behaviour and has made most of us feel ill.
All we have been told is that the UK instructed a firm of Accountants in Sydney to take on voluntary administration of Dore Australia on Thurs night Aust time. Apparently this was brought about by salaries not being able to be paid.
This is terrible and as pointed out is extremely unethical. I know nothing about Australian law but behaviour like this should be regarded as criminal.
Regardless of my views on the Dore programme my sympathies are with customers of Dore Australia and those of their staff who were not aware of the apparent impending administration. If the average Dore member of staff is as conscientious and caring as the above member seems to be then this is a terrible betrayal by the Dore management of both staff and customers. I hope these employees find a better employer and that dyslexic and other learning disabled children continue to receive assistance.
This situation may also have serious implications for Dore in the UK. There was a comment from Chris Treganza on my original blog post that bears repeating here,
A company is allowed to trade while insolvent if the directors have a reasonable belief that it can become solvent again. This allows companies that are generally in good health to trade themselves out of short-term difficulties.
The amount owing to debtors doesn’t paint the whole picture either. The first question is when is that money due as business loans are often staged over a number of years. The second question is to whom the money is owed? This has a big implication on the solvency. If the main debtor is also the main shareholder (a Mr W. Dore I suspect), they are unlikely to call the debt in.
The financials of Dore are very interesting. I’ve not been able to find out how much money Wynford Dore had after selling his paints business but £5 - £20 million is my guess. By his own admission an awful lot has gone into the Dore Achievement Centres. The shift in marketing strategy over the last couple of years indicate to me that the Dore business is now having to stand on its own without Wynford’s open cheque book.
The true state of the company is hard to assess as its not clear if the non-UK centers are owned by Dore UK, owned by Wynford Dore personally or franchises. So a true picture of assets, turnover and debts cannot be seen.
If Dore Australia is not owned by DDAT (UK) or Wynford Dore then it suggests that Dore staff and customers in the UK have nothing to fear in the short term if Wynford Dore continues to support DDAT (UK) and does not call in their debts. However, if Wynford Dore or DDAT (UK) do own Dore Australia then the potential ramifications for customers and staff are huge. Staff face the possibility of immediate lay off and non-payment of salaries while customers risk losing money they have paid upfront for treatments which they may not get. This is a very serious concern and it is one that Wynford Dore and DDAT (UK) need to address as soon as possible. I urge all Dore Staff members and customers to raise this issue on the Dore Talk forums and demand answers. Back in January I and others attempted to do this and were not given satisfactory answers. With people’s jobs and money at stake proper answers are needed now.
If any Dore member of staff or customer wants to add something in the comments I would appreciate it or if they wish to email me confidentially I can be reached at gimpy.gimpyAThotmail.co.uk.
*update*
Brainduck has a brief comment on this.
Podblack is looking into it too.
A view from a concerned parent and Dore customer.
*update 2*
Dore have responded on the Dore talk forums with Rosanne Sayers, Global Digital Experience Manager, making the following statement.
Hi all
We are still waiting to hear from our advisors more about the plans that are emerging, but we will share with you what we know at the moment, and then keep you up to date as soon as anything new comes through.
It is not true that Dore Australia is in liquidation, but what is true is that it has been put into voluntary administration. This is a very important difference as the motive of the exercise is to evaluate different options for setting up a sustainable model for the delivery of the Dore Program going forward.
The reason for this decision is that whilst the current business model has been reaching 1,000s of people and achieving life-changing results, it would never be able to reach the millions of people that need help. The company must restructure to enable that to happen. Currently Wynford Dore is subsidising each client by amounts up to A$2,500 each. This he can’t do for ever.
The issues of learning and attention are problems that the Government should be taking responsibility for. They don’t even automatically screen every child in our schools. Dore has spent huge sums of money developing screening tests and providing them for parents who are concerned. The vast sums of money that Wynford has put into all the research has not been aided by anyone – he has done something that government should have done. A project like this needs the support of Governments so that we can get the economies of scale to make it available and affordable for all that need it – whether or not they can afford it. The reason why Dore has tackled it is because nothing else deals with the root cause and helps so many symptoms. Everyone knows that their child only gets one chance through school, waiting 20 years for Governments to realise what they need to do means that our children will struggle the rest of their lives needlessly.
We are doing our best to make it available now. If they came along today to put it into schools, we would help them all we could – and that is where it needs to be.
Most families are very appreciative that Wynford has been prepared to fund this for many years, and the fact that he and all the staff have worked very hard indeed (and in his case without taking one cent of pay) to get this to as many as possible. Many realise this but of course a few aren’t aware of the level of commitment and the motives behind it. We are all very sad that this step has had to be taken, but we are hopeful that a very rapid solution will be announced soon.
As soon as we have more news, we will pass it on.
In the meantime, please forward any questions or comments to dore@dore.co.uk
The Dore Communications Team
To be frank, this is an admission that Dore was never a viable business in its own right and relied on a sugar daddy in the form of Wynford Dore. It has been suspected for some time that Dore was a vanity project of Wynford Dore and while one can’t fault the commitment of a man prepared to heavily subsidise something he believes in one can question his judgement and the ethics of charging large sums of money for services provided by an unsustainable business.
I agree with Dore that, at least in the UK, Government could do more to help those with specific learning diabilities. I have personal experience of the difficulties the state education system has in dealing with individuals who require a little bit more support than their peers. However, it beggars belief that Dore seek to blame their inadequate business model on Government. The fact is that Government money has to be carefully rationed and ideally only dispensed on projects with proven benefit. Unfortunately for Dore their self funded research has been so inadequate that it has been a struggle to publish it at all let in a journal of note, brainduck has an excellent examination of some of the problems of Dore’s research here and here while Ben Goldacre has covered it here. Dore research has been so flawed that their attempts to woo Government have been largely unsuccessful.
So we have a business model that was quite blatantly unsustainable and, as I have previously shown and brought to Dore’s attention, runs at a considerable loss. Dore have not attempted to remodel their business until now when it is too late and they have taken money for treatment they can no longer provide. Not only that when I attempted to warn customers about the financial non-viability of Dore I was told it was not to be discussed.
So Dore were happy to take money to fund an unsustainable business and rather than accept responsibility they have chosen to blame ‘Government’. It is Dore who are responsible for this mess. It is also not reassuring that Dore are making no assurances about whether people will get their money back or staff get paid. If I were a customer or staff member I would be seeking legal advice.
*update 3*
Holfordwatch offer further analysis.
Podblack offers more analysis of Dore’s latest statemen.
A Dore staff member makes this plea:
I am a Dore staff member who showed up to work on friday morning and was told I no longer had a job at Dore. I was given no explanation and was told to leave the premises as soon as possible. I was a program specialist for 2 and a half years, I loved my job and I had the priviledge of meeting so many wonderful and inspiring individuals. I like to think that I helped some of those. I was told nothing and have not been paid for my last months work with the company, me along with my other wonderful and dedicated colleagues have been left in the dark and kicked to the street. Most of us have children, mortgages and rely on our income for SURVIVAL. Needless to say I am livid. This is so unjust…for all the staff members across australia and the many clients who have paid money to go on the program and now may not even get to complete it! This has been totally mismanaged….I expect to hear more news later this week, but I have a feeling it wont be positive for any one concerned.
I would really like to hear from Wynford himself!
*update 4*
Tom in the comments has highlighted this statement from Convex Capital dated from January 2008 suggesting that Dore brought in outside help to deal with their financial situation.
Brainduck scathingly analyses Dore’s statement on the Australia situation.
*update 5*
Podblack has tried to contact Dore, but they are closed till further notice. She suggests that former employees read this document:
*update 6*
The documents pertaining to Dore creditors are here.
*update 7*
Myomancy has some analysis with some interesting speculation over intellectual property.
Jo, a Dore staff member has commented on their forums:
Just wanted to add some clarity to the current situation with Australia. It is true that all operations have been suspended in Australiafor the time being. However, it has not gone into liquidation, it has simply been put into voluntary administration. The reason for this is that we are actively seeking possible partners to enable us to continue to deliver the programme and are looking into all avenues for ensuring every client is able to complete the programme. This may not happen overnight, but Wynford is very hopeful that we will be able to find a solution.
Our PR agency will be issuing a press release shortly to the media to this effect.
So far no press release is forthcoming.
May 17, 2008 at 2:19 pm
I’d rather have argued out the research than have DORE fall apart on financial grounds. This way I’m sure people will decide it’s been ’suppressed’ or something, rather than just not working.
May 17, 2008 at 3:30 pm
Gimpy - great work as always.
Just one quibble. Their behaviour isn’t necessarily unethical or criminal. Assuming that Australian law is similar to other countries’ then trading while insolvent is illegal unless the directors (as mentioned above) “have a reasonable belief that it can become solvent again.”
If the directors were running a company that they believed to be solvent and then suddenly heard some unexpected news which left it insolvent (and without a realistic hope of solvency) then the only ethical and legal option would be to shut down the company immediately (otherwise it would continue to run up debits and obligations which it would be unable to meet).
This can happen, and does so depressingly frequently. Some common reasons are that: a bank or other organisation lending the company money abruptly decides to stop doing so; they loose a major client; or even that an entity owing the company a lot of money (such as a major client) states that they won’t be able to pay it back.
The employee you quote states that “they must have known for weeks”. This appears to be an assumption (or at least the employee didn’t definitively state that the directors did know for weeks). It is quite understandable that someone who is very likely to loose their job would think the worst of the directors. But unless the employee has access to the company accounts and correspondence with creditors and auditors etc they probably aren’t in a position to state exactly what the directors knew.
The collapse of DORE Australia clearly shows that its business model was flawed. But until we know more I think its too early to suggest that its directors behaved unethically or even criminally by winding up the company when they did.
May 17, 2008 at 3:53 pm
Woodchopper, your perspective is always appreciated. You are right to draw attention to the fact that there may be an unexpected reason for the sudden shut down. However, the financial problems of Dore have been debated for some time, not least of all on my own blog. Dore were certainly aware that people were asking questions of their solvency and the willingness of Wynford Dore to support the company. As this transcript shows Wynford Dore appeared to have played a very hands on role in establishing Dore in Australia. Without looking at the Dore Australia company accounts (which do not appear to be easily available, any Aussies who can help please let me know) it is hard to say whether Dore had an active role in managing and guaranteeing the debts of Dore Australia. However, it is almost certain he does this for DDAT (UK). If DDAT (UK) only survive by the goodwill of Wynford Dore it would not be an unreasonable assumption to assume Dore Australia did too. They must have known when they set it up that the business model wasn’t working in the UK, so why use the same model in Australia?
But, yes, caveats do apply, this latter statement is opinion not fact as are the comments regarding ethics and criminality.
May 17, 2008 at 4:11 pm
I don’t understand how a product that costs almost nothing for the producer and sells for thousands to the consumer can lose money.
I do remember reading awhile back that Dore was going to start giving a guarantee for the program.I wonder if customer’s wanting their money back had anything to do with that?
May 17, 2008 at 10:55 pm
John, it may have been massively profitable, but Dore has invested alot in Australia but following the ABC program everything dried up. I dont think the guarantee has anything to do with it, its not worth the paper its writen on (its worded so they always win)
This is of course great news if its true, even tho you cant help feel sorry for the people that have just paid, but I suppose they werent going to get anything for there money anyway as it doesnt work in any case.
We can now just hope that this cause gets the same exposure in other parts of the world, please continue to tell journalists etc of the great success of the ABC program in Australia and how news worthy it is and how it has helped people and perhaps it will soon be replicated elsewhere.
May 18, 2008 at 12:53 am
We paid our money on Wednesday only to have a dedicated employee call us at home this morning (Sunday) to tell us of Dore’s closure.
I’m certainly more than a little peeved that the company continued to take peoples money right up till the day the doors closed!!
May 18, 2008 at 8:35 am
Hiya, getting ready to head straight in tomorrow morning (Monday) to asks some straight-forward questions! Will let you all know!
May 18, 2008 at 10:12 am
[...] here: Australian DORE customer has appointment cancelled, Gimpy’s latest - including comments from other DORE customers who’ve been let down, and it’s hit the [...]
May 18, 2008 at 10:51 am
Few more parent sources that I’ve stuck on my blog: http://brainduck.wordpress.com/2008/05/17/australiacollapse/
will keep updating ’till DORE issue something official, but it’s looking more & more definite.
DORE staff in other countries don’t seem to know what’s going on one way or the other, the USA staff moderator of the Yahoo group has said she’s no idea. Nothing on the official forums too, though it’s hitting other forums in a few places.
May 18, 2008 at 11:01 am
Thanks Brainduck, I have added the same links to the post. I understand that the decision as to whether Dore Australia goes in to liquidation will be made some time next week after a meeting of creditors.
May 18, 2008 at 11:58 am
[...] get largely positive coverage in the UK mainstream media. We were therefore interested to hear that Dore Australia has now gone into administration. A Dore staff member states that Dore Australia is seeking to evaluate different options for [...]
May 18, 2008 at 1:14 pm
[...] does not, however, answer the questions or concerns of the staff member that I earlier citied from Gimpy’s Blog and Brain Duck. Being told that you’re not going to get paid isn’t really good, is it? [...]
May 18, 2008 at 5:15 pm
Is there anything we can do for the existing clients, in terms of getting a refund. I am thinking the network of blogs could emphasise the importance of ensuring all clients get a full refund.
I think this hasnt just happened, this is probably related to the appointment of the new management team
http://www.convex-capital.com/3casestudies.aspx?id=35
I wonder if Dore thinks that wont badly affect the credability of its other operations. Is this going to follow for the other offices? Dore staff should be telling clients an affected that an associated business has gone bust, and people shouldnt be signing up.
Also, lets keep at the forefront that this isnt a case of these people not getting traetment, unfortunately these people had already been conned, only now they know about it sooner and have been conned in a different way.
May 18, 2008 at 5:35 pm
While the other operations are continuing, this is encouraging, as it demonstrates that the public can make an informed decision whilst the facts are readily availble to them, as was the case with the ABC documnetary.
If anyone is speaking to the press, please stress that this was a result of the negative press. Hopefully we can get some less biased coverage like this in other countries soon.
May 18, 2008 at 5:46 pm
Tom, that ‘convex capital’ document is - interesting, thanks!
‘Wynford Dore, founder, said, “We were approached by various consultancy and
corporate finance houses to act on our behalf but chose Convex Capital due to
their proven track record of working within the specialist services industry. Even
in the short period of time that they have been involved they have increased
sales and margin and put in place a cost optimization plan that will provide a
solid base for future growth. In addition, not only have they benefited the
company from an operational point of view but have also added to the
management team and introduced other third parties that will add significant
benefits going forward. I have no hesitation in recommending Convex Capital to
any company that wants to make more money, quicker.’
May 18, 2008 at 6:07 pm
Yes, it should quite blow away any notion that there is truth that Dore is doing this out of his own pocket!
I would also like to clear up the think about the DDAT UK accounts, I am convinced that they do not show a deficit in the commonly accepted sense. The deficit anomoly is a quirk of double entry bookeeping, and I think these accounts are those of a (very) healthy company for that date, and probably now also.
Even if the Australia operation is in receivership, I doubt Wynford lost any money on this, although he will be disappointed and Australia has previosly given him most of his profit.
May 18, 2008 at 6:51 pm
Tom, but Dore have claimed Wynford personally subsidised each case of treatment in Australia to the sum of $2,500. This doesn’t quite fit your argument. Perhaps Dore will release a statement early next week to clarify things.
May 18, 2008 at 8:56 pm
I dunno, Tom - I’m not particularly accusing those involved of being out to make a personal fortune, just that it does suggest that trying to make the business work financially may well have been a priority at the time in January.
Combine that with people literally turning up at work & being told to go home unpaid - it doesn’t look so good.
May 18, 2008 at 9:31 pm
Absolutely, im not particularly bothered about any individuals financial position either, although it does rattle me a little to see someone getting rich at other peoples misfortune.
The point about the profit is it exposes one of Dores major lies.
May 19, 2008 at 6:36 am
I remain unconvinced. Nevertheless asking large sums of money for treatment that has not been appraised to a high standard and shown to work does suggest a certain lack of ethics, no matter if the intentions were honourable.
May 19, 2008 at 8:21 am
[...] UPDATE - thanks to Gimpy’s Blog: [...]
May 19, 2008 at 8:22 am
Thanks Gimpy for your brilliant round-up - just posted the links myself for the pdfs you found!
I hope that people are able to turn up to the Friday meeting in Sydney; I’ll alert the NSW mob as to whether they are interested in finding out more. K.
May 19, 2008 at 11:16 am
Just want to try and clarify things regarding the DDAT(UK) accounts.
Gimpy, it’s misleading to say there is a deficit of £6.8m in their current account. The accounts actually show that the company has £685k in cash! What is true is the accounts show an accumulated loss of £6.8m (maybe this is what you intended), almost £3m of which was lost in the year to 31 March 2006.
From review of the accounts DDAT(UK) does not own DORE austrailia (it doesn’t own any investments).
Tom, I would argue that it’s not really possible from the available information to tell whether the company is in good financial health or not. The accumulated losses ARE real losses for the company, and IIRC they have been largely funded through ‘Directors loans’. Of course there are creative ways of showing a loss in accounts, and there are reasons why one might want to do so. But without knowing the business plan, or having access to more detailed accounts it’s impossible to tell whether the company’s performance is good or bad.
Remember that another test for insolvency is whether you can pay your creditors in time. In this case, by far the largest creditor is in the form of directors loans. So as long as the directors agree not to call the loans in then the company can continue to trade.
Is there any news on the following year’s accounts (31 March 2007)? I’d be keen to have a look…
May 19, 2008 at 11:26 am
Skidaddle, oops thanks for the correction. I have amended the post.
May 19, 2008 at 10:22 pm
[...] breaking news that involves the group here in Australia, thanks to Gimpy’s Blog and the ever-vigilant Brain [...]
May 20, 2008 at 7:01 am
Re. the above link to Woodgate and Co the first creditors meeting is at:
Sydney Masonic Centre, Northcott
Room, Fifth Floor, 66 Goulburn Street,
Sydney, NSW on Friday 23 May 2008 at
11.30am.
I assume that the Masons hire out their rooms.
May 20, 2008 at 7:06 am
I think more revealations regarding Dore as an organisation especially in the Uk are due to hit the media in the next 10 days.
May 20, 2008 at 7:29 am
It should be noted that the Global Digital Experience Manager who posted a response on DoreTalk, is Rosie Sayers, Wynford Dore’s eldest daughter.
May 20, 2008 at 8:31 am
It’s odd that we’ve not heard much from UK or other staff yet. I would’ve expected RoseM to be jumping in on the forums by now, but the only current staff who has said anything is the American admin of the Yahoo group.
I hope you are all OK, wherever you’ve disappeared to!
May 20, 2008 at 2:35 pm
John said “I don’t understand how a product that costs almost nothing for the producer and sells for thousands to the consumer can lose money.”
Operating an office, with five to ten staff does not cost almost nothing. Even if you have five staff (about the minimum Dore can operate on), running 9 to 5, it will cost around (UK) £100,000. Salary, rent, equipment, employers tax/NI contributions, sick leave, overtime, holiday pay.
A single treatment costs (UK) £2500 and takes about a year so each year an office has to sell at least 400 treatments just to break-even. That is 8 new customers a week and in order to sell those 8 treatments you need salesmen on top of the office staff, further pushing up the costs.
The price of the treatment is reasonably reflective of the costs needed to supply it.
Tom - I sure you are enjoying this moment of schadenfreuden but try and stick to reality and not your dreamworld. You wrote:
“Dore has invested a lot in Australia but following the ABC program everything dried up.”
Where did you get this information from Tom? Does Dore personally tell you how many people are coming to his clinics each month?
“Australia has previosly given him most of his profit.” Again Tom, please quote your sources.
In Tom’s world, the Australian media were duped into thinking Dore was a miracle, thousands of people rushed to his clinics making Dore a fortune. But then came ABC like a knight on a white horse and with their 45 minute TV program they convinced everyone in Australia stopped buying Dore.
I’m sorry Tom but the world doesn’t work like that. Current affairs programs simply don’t get a big enough audience. Doing a Google for “Dore Australia”, the Four Corners program doesn’t show up except in some passing reference.
Whatever the reasons for Dore Australia’s demise, a single negative program is not it.
May 20, 2008 at 9:25 pm
Chris, I disagree with a few of your points.
1stly, to break even on at 100,000 Dore would need to sell 40 programs, not 400.
Secondly, Australia has had the largest investment because there is the most centers there. I have no source, its simple logic.
Also, I am proposing that it was the ABC program that brought the invalid research to light, and finally floored Dore. Anyone with an interest in Dore would have watched this, anyone who asked anyone about Dore would have been told about this. The same thing will happen here shortly with Brain Gym following the Panorama documentary. What other event do you think led to Dores demise? Again, no sources, its just logic.
Its not just ABC either, there has been more and more bad press about Dore recently, and people, organisation espcially who use or support Dore are getting questions and brought to account.
I also disagree with you about the value of the IP. What value do you think this information has now that it has shown to have been publicly descredited. What other company would value this now that Dore themselves have gone under? What information would they get anyway, most of these theories arent new, have very rarley been backed up by anyone else in the medical community and anything that isnt already in the public domain is probably just more strange theroies backed up by weak pseudo-science.
May 20, 2008 at 9:48 pm
Based on your 100,000 figure (which may be a little generous as not all centers have 5 staff) we can make some intersting calculations.
Lets assume there are 30 centers (again generous) that 3 million per year, over 5 years is 15 million. Dore claim to have treated 25000 people, at 2500 thats 62,500000, thats 47,500,000 profit. (I know the price have increased but then so have the number of centers, the latter more so, which would give more profit.
Also, if 40 clients are needed to break even at 100,000 revenue with 5 staff, then the contact days between the staff and clients is 400 man days (based on a client comming to the center 10 times a year) but with 5 staff you have 1000 man days available, therefore I suspect they they have alot more clients that this.
Any notion that this is not for profit is rediculous. This has not been done for the benifit of people with learning dificuties, this is a business is the most strict sense. If it wasnt this lastest saga would not have happened, especialy in the way it did. Dore would have had plenty of notice of what was happening and still they those to treat customers and staff in the way they did. Remember they were taking clients money right up until the time they went into administration.
I stronlgy suspect that this will happen soon to the other regions, and I hope they are not taking peoples money anymore.
May 20, 2008 at 10:14 pm
Skidaddle .. “The accumulated losses ARE real losses for the company”
Thanks for the clarisication, it certainly seems Dore UK are in serious risk of going under too.
May 21, 2008 at 7:59 am
I am the ex CEO of Dore Uk last year dismissed for gross misconduct.
My case in defending my name starts next week and various pieces of evidence will be presented in both defending my name and showing why i feel i wasreally dismiised.
I cannot comment on thsi evidence but it will be a matter of public record in the next few weeks.
If however anyone wants further information on the structure of the compnay and matters that are currently a matter of public record please e mail me bobclarke4@hotmail.com.
I am truely sorry for both staff and clients in Australia and hope that somehow the right thing is done by all.
May 21, 2008 at 9:21 am
Yes £100,000 / £2500 = 40 not 400
I’m not sure where I got that extra 0 from.
The point I was trying to make was that the price of the treatment do reflect the costs of the business.
The cost of 10 visits, each taking about 1 - 2 hours of staff time equates to between £125 - £250 an hour. This comparable in price and underlying costs to private health care, dentists or serious professional advice such as lawyers.
Tom - To save you the effort of jumping and making a fatuous remark, I’m not saying the Dore is equivalent in professionalism etc to medical or legal professionals. I’m taking the cost of running this type of business. It also worth pointing out that Doctors and lawyers haven’t had to pay for the development of their service. e.g. Doctors don’t invent the medicine they prescribe, lawyers don’t have to create their own legal system. The idea that Dore loses £X per patient I suspect comes from the fact he had to invest £Y million pounds before he sold a single treatment.
Tom’s argument that Dore Australia suddenly crashed because of the ABC program is logic show’s Tom’s logic is about as good as my maths skills. He falling for the fallacy of “Post hoc ergo propter hoc” which ironically is the same fallacy that leads people to think that homeopathy works.
What is clear is that Dore (Oz) shutdown because it was losing money. Negative publicity will be part of that but the impact of the ABC program will not be the sole reason. To think that before the program Dore (Oz) was making a fortune and then suddenly people stopped coming because of a TV program watched by a small %age of the population shows a lack of understanding of business and marketing. If this was the case, then Dore (Oz) would of cut back staff and waited until people forgot about the TV program. If it looked that people were not coming back, they would of slowly and quietly wind down the Australian clinics. The cost of refunding clients whose treatment were cut short would of been small compared to the cost of the negative publicity this sudden closure has cost.
I think the real reason Dore shutdown is because of a far more simple.
Its bad business skills.
Lots of companies have expanded rapidly using investor’s money only to discover that when the money runs out, the business simply isn’t profitable. The computer industry is littered the remains of firms who fell into that trap. The high street has seen more than a few of these as well.
I think Dore fell into the trap of believing that if he could make the business big enough, it would reach some critical mass and become profitable.
This was compounded by his marketing. If you build your business on human interest press stories and talk of miracle cures then sooner or later the press will turn on you. At best it becomes old news and you stop getting coverage.
The marketing, right from day one, upset people because special needs education is a conservative market. It is one that requires sensitivity and caution. Wynford’s style was great early on for getting attention early on but he should of backed off and gone for a more conciliatory style.
I suspect that the closing of the Australian clinics was a recognition that he was throwing good money after bad. My prediction is that we will see other clinics close around the world, based solely on their profitability. Any that are not getting enough people through the door will shut. In some countries it may be easier to close them all as running just one clinic in a country is expensive in terms of management and overheads.
Chris
May 21, 2008 at 1:00 pm
Chris, back-of-an-envelope sums:
Dore in Aus since 2002, ~5 years
At most 19 clinics, though only 11 were still open last week - I’m not sure of the details, but assume average of 10 clinics open for each of 5 years.
I’ve heard ~11000 clients treated in Australia - don’t know whether that means ‘assessed’ or ‘completed’ but since payment up-front that’s not such a difference.
That means very roughly ~200 - 250 clients / centre / year. At ~ 9 appointments per year (for those continuing with the programme), would that be enough to keep them fairly busy? Depends on how large the centres & drop-out rates I suppose, but the numbers aren’t trivial.
Obviously all this is incredibly back-of-an-envelope speculation.
Wonder why the 8 centres in Australia closed previous to this?
May 21, 2008 at 10:12 pm
Chris, where do I start?
“The point I was trying to make was that the price of the treatment do reflect the costs of the business. ”
But your own figures demonstrate that this service costs alot less to administer then they are charging for it, as John originally said.
“The cost of 10 visits, each taking about 1 - 2 hours of staff time equates to between £125 - £250 an hour. This comparable in price and underlying costs to private health care, dentists or serious professional advice such as lawyers.
Tom - To save you the effort of jumping and making a fatuous remark”
I am sorry, I have to jump in here, the difference is doctors and laweys earn this, Dore ‘program assistants’ dont, I would be grateful if anyone could shed light on what they earn but I doubt it was more than 20 grand. Therefore the company takes the profit. Even if there hourly rate was 20 per hour, dore still make over two grand if they see them 10 times, given that the drop out rate on the program is so high the profit is staggering.
You are saying that Dore had to pay for the research upfront and this loss now has to be reclained in fees? But by your own figures we have shown that Dore could be 47000000 in profit! Do you think this is what they paid in the initial research, given that the Dore theory is based on old outdated theroies? I think NOTHING was spent on this research, its just a load of old rubish that Dore sat down and made a bit more marketable with a few plausible sounding pseudo scientific titbits.
We are being very generous by using your figures but whatever figures you use, its never going to be marginal, Dore always come out making H U G E profits.
But you claim that he spent millions on research and developemnt before he sold a sinlge treatment, where did you get this information, and if it is a geuss, how do you support it?
“Tom’s argument that Dore Australia suddenly crashed because of the ABC program is logic show’s Tom’s logic is about as good as my maths skills. He falling for the fallacy of “Post hoc ergo propter hoc” which ironically is the same fallacy that leads people to think that homeopathy works.”
So you are suggesting that I am only proposing that ABC played a part in Dores demise because one event followed the other?? and that you dont think they were related?
Dore did cut back staff after ABC, (can anyone confirm that the Australian centers closed recently?) This obviously wasnt enough and they had to close the whole operation when they saw the customers did not come back.
I dont think Dores marketing was the cause of its demise, I think it was the cause of the success. However the truth outed in the end (at least in Australia so far, and hopefully elsewhere soon)
My prediction is also that the centers will close but this will not happen until potential customers are educated about the truth regarding the Dore program. The profits in other regions are obviuosly very strong and they will be milked for as long as possible.
I wonder if having the regions as separate business entities was planned for the very reason that if bad publicity affected one it would not take down the others?
May 22, 2008 at 8:51 am
Dore is not making profits (rumour is that its £6m a year loss). Staff payment is not the only overhead of a company. The renting of buildings, electricity, stationary (of which they use a lot of paper to print the books), furniture. Programme Specialists start at £18,000, that’s roughly £9 an hour. Lawyers are always needed, no-one questions them, Dore is “questionable” so people are reluctant and a lot of money is spent on advertising and sales. It’s a worrying time for anyone who works for Dore and all the clients that PS’s care about very deeply.
May 22, 2008 at 10:59 am
Tom,
47 Million profit!
What a dreamworld you live in.
Its a world where Tom believes Dore when they say they treated 11,000 people but doesn’t believe it when Dore says that these people’s lives have been improved.
Its a world where business cost nothing to set-up. Where Wynford Dore, a man who made his money selling paint, creates an exercise program, does all the graphical design and writes the software all by himself. Quite impressive as he was designing and building posturegraph machines and eye-tracking devices at the same time.
Its a world without accountants or lawyers or HR managers.
Its a world without tax and NI.
A world without health & safety, burglar alarms and insurance.
A world where it costs nothing to rent buildings or to decorate them.
A world where computers are given freely to whoever wants them.
In Tom’s world no one is off sick or goes on holiday.
Bizarrely in Tom’s world, the only cost to Dore’s business is that he has to pay anyone who says anything nice about him. Because in Tom’s world no one could possibly think Dore was an honest businessman with a genuine desire to help people.
The strangest thing about Tom’s world is that Dore has expert salesmen (who cost nothing) with an arsenal of high pressure sales techniques that prey on weak, vulnerable parents. Yet these salesmen are turn away by the protective armour of a TV program that most parents never saw.
Tom’s world is clearly a very different place to the world the rest of us live in.
May 22, 2008 at 5:45 pm
Tom, I honestly think you’re looking in the wrong direction here.
There’s a lot of hidden costs involved in running a business beyond the direct costs of what you are supplying to a client. Even a simple company like high-street retailers need to sell on at 2-3 times the wholesale price to keep afloat. Can probably put that multiplier up a few more times with such a complex business, while still only just covering costs.
The research they have done wouldn’t actually have cost much more to do properly (this is one reason why it annoys me so much), and we know they paid for some of it.
The Aus press have been a bit less uncritical than the UK, but there’s not so much difference. My speculation would be that it’s just not a viable business model long-term, since the research hasn’t been great for them then they haven’t been able to integrate with mainstream SEN support as they might have expected.
I would have thought Australia going broke was a sign that they aren’t making much money!
May 22, 2008 at 9:16 pm
Chris, I am accutely aware of the costs or running a business, perhaps you could explain (preferably without the theatrics and insults) what the 50,000,000UKP in revenue (25000 clients, each paying 2000, both figures conservative) would have been spent on?
May 23, 2008 at 2:37 pm
Re Dore in the UK. Offices are now closed. My niece worked the Bedford office, has left to have her baby and now probably won’t even get maternity pay. What a shambles. Please keep us up to date.
May 23, 2008 at 4:21 pm
I am now an ex Programme Specialist and have just been informed that I no longer have a job. I think like my Australian counterparts that they way the company has folded is a disgrace. I feel really sorry for all the clients and for the expectations that they all had. What I cannot forgive or understand is the fact the only yesterday and Tuesday new clients were enrolled onto the programme when someone in Finance and in management would have known about the state of the company. It was mercenary to let us all know at the end of the month and at a weekend that we would not be getting paid,without any notice other than a quick phone call from my now ex manager. I am sure all those that had been in the know will have made provisons for themselves and their famillies. We have all been ripped off.
May 23, 2008 at 4:34 pm
[...] First, I’d like to humbly direct people firstly to the blogs of the legends Brainduck and Gimpy - who inspired my investigations on this matter beyond the great blog entries that I first read by [...]
May 23, 2008 at 4:41 pm
[...] First, I’d like to humbly direct people firstly to the blogs of the legends Brainduck and Gimpy - who inspired my investigations on this matter beyond the great blog entry back in 2006 by Ben [...]
May 23, 2008 at 4:45 pm
[...] programme - had positive coverage about Dore on last Monday [MP3]: immediately after Dore Australia went into administration leaving staff and clients unsure what would happen to what they were owed. You & Yours did know [...]
May 23, 2008 at 8:45 pm
[...] Dore Australia go into administration? *Updated 1, 2, 3, 4 ,5 ,6, 7* [...]
May 24, 2008 at 9:25 am
[...] In January 2008, Gimpy found that the DORE UK accounts showed that they had an accumulated loss of ~£6.8 million to 2006 (~US$13 million ~AUS$14 million). Gimpy and I raised this on DORE talk, but were told that ‘discussion was not appropriate’. Also in January 2008, Convex Capital, a consultancy firm, were brought in. The reasons for this may be inferred from Wynford Dore’s statement ‘I have no hesitation in recommending Convex Capital to any company that wants to make more money, quicker’. Gimpy has since looked at the 2007 accounts, which show an accumulated loss of £8.3 million. Treatments were being funded by the recruitment of new clients. It is difficult to see how existing clients could now be provided with services or refunds, particularly since it is clear that this will not now happen in Australia despite early suggestions that this might be possible, and UK staff having been ‘told they no longer have a job‘. [...]
May 26, 2008 at 7:15 am
[...] Dore Australia go into administration? *Updated 1, 2, 3, 4 ,5 ,6, 7* [...]
May 26, 2008 at 10:49 am
As an Australian ex-employee who left after Wynford employed the Britannica sales staff ,the current situation is not surprising that the current events have unfolded.
Using the sales techniques that have attracted the interest of Consumer Affairs for many years is not condusive to garnering support with the general public, the teaching profession or those who may be desperate for an answer to a very real and painful learning disability.
This is not something to make money from - although we were told when our small Australian office opened up, that “once more people enrolled in the program, the price would drop”.
At this stage, clients were paying on an ‘as you go basis’ for which they could budget. Sure, sometimes their 6 weeks stretched out, especially if they were country clients, but we were understanding of this and the PS’s did everytning they could to help out.
What makes me really angry is to read (via Rosie’s profile on the official site)- of Susie’s move this weekend into her new house…does that remind anyone of Nero fiddling whilst Rome burns?… and the vacuous comments from neophytes on the official forum wishing her the best……
What about the families here in Australia (many of whom come from severely drought affected areas) who are desperately clutching at straws to do the best for their children?
Don’t begin to criticize the teaching profession- they are doing their best with class sizes and the lack of information about how to TEACH students with a learning disability. Most teachers are just keeping their heads above water dealing with the daily dross in schools and the ridiculous paperwork and ‘eduspeak’ that they have to cope with. Those that really care, burn out and quit.
May 27, 2008 at 6:30 am
I am a former employee of Dore and I can say without hesitation that the company finds itself in this posistion due to a total lack of management. In hindsight, the writing was on the wall, however no one saw this coming as we were frequently lulled in to a false sense of security by constant reassurances. This is of course heartbreaking for all the clients and staff memebers such as myself who find themselves out of pocket large sums of money. The company threw away more money than Bill Gates!! Can you believe that when I started at the company every single employee was provided lunch 2 days per week! What an extravagent expense! It is true that at one stage the programme did offer a programme guarantee. There was also poor marketing strategies that claimed Dore was a “cure”. It is not surprising that academics and other health professionals got their backs up over this statement. We are talking about professionals who have been working with these disorders for decades, and along comes some guy who has previously been affiliated with paint boasting he has a cure!! Is it unwarranted that they get their noses out of joint? Despite all the controversy, I have seen some clients who have experienced phenomenal improvements. Sadly there has also been others who have seen very little. It is also difficult to predict when working with the brain and with clients who frequently have a commorbidity of issues. Dore simply provided an alternative therapy. It was in no way a cure, just as it would be a gross misconception to claim that accupuncture is a cure for chronic pain!!
May 27, 2008 at 10:44 am
I am a parent of a child in the Australian program. We have been paying the program off, with about $1000- balance. I have halted payments. My daughter was due for an appointment on 16th May, but a DORE rep rand the night before to ask us to cancel the next day appointment and they would call back the next week with an updated appointment time. The doors closed that day, but we were not told that. It was after I rang the 1300 phone number that I finally heard about the closure yesterday. To make it even worse a withdrawal of $250 was withdrawn the day sfte they closed!!! What a muck up!!! I was given a guarantee that if there was no improvement that there was a money back guarantee as long as we did the program 100% of the time. We have attended all our appointments, done all the exercises so i think that it means that DORE has broken the contract and that I am entitled to all my money back. My family had to make adjustments to afford this program for my daughter. A friend only found about this closure from me tonight and she has paid up front. When were families going to be notified????? I have not been officially notified of closure. It was only that I was trying to make an appointment that I found out. That is bad business!!
May 27, 2008 at 6:05 pm
I am an ex Dore employee - one of the dreaded sales people referred to on your site, I am also the parent of a child who went through the program. I would say on oath I never pressurised anyone into signing onto the program & grew to hate the way in which we were portrayed. I was made redundant last year & now feel the writing was on the wall back then, if Wynford knew then that the company was in trouble financially getting rid of the only people who brought the business in made no sense at all. It also seems very convenient Dore uk goes under the week before Bob Clarke industrial tribunal is due to start, were they worried he would win & this is the only way they could protect themselves from having to pay out. The way I many others were treated was shameful, I regularly worked 60hr weeks with no extra pay because I cared deeply about my clients - I even gave them my home telephone no so they could contact me at any time & they did - almost 12 months on I am still receiving calls from Dore clients asking me what they should do I only wish I had answers for them, I really believed in Wynford now I’m not so sure
May 28, 2008 at 2:20 am
Sad. We have two children on the program, like others only found out today when trying to re-book an appointment that was cancelled.
Fortunately, our boy (who was severly ADHD) finished the program last month. The results were UNBELIEVABLE and I challenge anyone to doubt the benefits he received from DORE. He is a walking, talking advertisment for them. In the space of 1 year he went from nearly being murdered by everyone who met him to being… perfectly normal.
Sadly, it seems like our girl will not have the same experience. She was responding more slowly, however was definitely improving beyond a doubt.
Whatever the cause of their demise, I would like to thank the DORE staff here in Perth for their commitment. You really have made a difference in my little boys life.
Thank you and God bless.
Darren
May 29, 2008 at 12:24 pm
I like many have shed many tears. we paid upfront . We have had 24 hard going weeks on the programme with our son who has ADD and dyslexia. we have done everything they asked. LIke many we were not told of the news, but we were watching the TV and DORE came on the TV , very excitedly we ran to watch the look and disbelieve on my sons face was heart wrentching. HE feels different and he is different. Improvements definately seen by all. What do we do now? Just watch our son struggle once again
May 29, 2008 at 12:38 pm
I am a parent that has just found out tonight that the Dore group has closed. I am very annoyed with directors of the company because I enrolled my son in the program on Friday the 9th and now looking at the webpage found out that the Australian clinics closed on Thursday 15th of May. With no Phone call or email or letter to inform us of this matter and only to find out through my mother-in-law on a TV program that was on tonight. I have paid up front the full amount. To only have support for 6 days (they made there money off me). I really want some reassurance that my son will be given the opportunity to complete the program or I want most of my money back (not likely)Like a lot of parents out there we do what we can for our kids and we are not made of money, thank a lot directors!!!
We are going to continue our sons program for as long as we can in the hope that this matter is resolved and the company is up and running again so our son and other like us can finish the program with success.
May 31, 2008 at 12:39 am
[...] accuracy, relevance, effort, ethics, and stupid names. Gimpyblog broke the news internationally of Dore going bust, following up a comment from a Dore employee. Back in January, he published a detailed analysis of [...]
May 31, 2008 at 8:51 am
to all out there that beleve in the program ,i sure do. Surely there is someone in Australia that has all the programs in there possesion.I know although i have spent and lost all that money i still beleve in the program and know it works.I have seen more sucess with this program than the other.Have you people seen the effects of ritalin and what it does to a child.Also what about the money lost on all that treatment and testing of ADD and ADHD.Who made all that money and does it fix the problem NO .At least Dores works sure there is an issue with management. Maybe this fantastic government that we have in place should look at doing the smart thing and pick up the pieces and inmplement the program if its fairdinkum about helping the working man.I know my young bloke is worth more than money.I would also be willing to speak to anyone that would be restarting the program or have the info how to finsh the program.
June 3, 2008 at 1:24 pm
My son is very nearly at the end of his treatment and I can say that it has made a very big difference to him. It may not work for everyone, and some of the sales and marketing may be a little “extravagant” but for those it does work for it is a real help.
On the financial side of the business try these numbers. I don’t have any financial dealings with Dore at all so these are my own guesses at costs:
If each centre has 5 specialists at 20k UKP/year and two assistants at 12k/year the actual wage bill is not 124k but probably more than double this once the employer’s overheads are taken into account. Add in rent,heating, electricity, the cost of the equipment etc. and 500k UKP/year per centre is likely including at least 2 sales people to get the 250 new customers/year (5 per week) @ 2000ukp each needed to fund this.
Assuming 30 centres worldwide that’s 15million UKP running costs plus central marketing, admin and program development costs - probably close to 20million/year. If 25 000 people have been treated at 2000UKP each over the past 3 years then total revenue is 50 million against costs of 60 million. If anything this is an underestimate of costs, especially because a large investment is needed to get a centre started before any treatment can start. Add in another 10 million UKP start up investement and cash flow and you get Wynford Dore’s personal investment of c. 20million UKP.
June 4, 2008 at 8:00 am
on one hand i have seen my son develop since starting the programme 6 months ago and it breaks my heart to see this now vapourise.
on the other hand all i can think about now is Class Action Lawsuit.
Brian
June 7, 2008 at 10:52 pm
This article quote to Australian administrators as saying revenues dropped 50% following the ABC program.
http://www.drugpolicycentral.com/bot/article/smh.com.au7933.htm