Therese’s pain

You wouldn’t know it when looking at photos of Therese Rein in the press. But she has had a bad year. The entrepreneur who also happens to be married to the Prime Minister has enjoyed great success turning her company WorkDirections Australia into a global juggernaught.

That is until she was forced to sell the Australian operations when her husband Kevin Rudd got elected to the top job. Only now is it becoming clear what a big sacrifice she made. According to a report in The Age her current business Ingeus suffered a $9.4 million loss for 2008-09, a big turnaround from the $15.2 million profit she enjoyed in 07-08.

The worst part is that Rein would have seen this coming. When she was forced to offload her business WorkDirections Australia for $26 million, she knew she had no choice. A lot of the company’ work came from government so there was a clear conflict of issue. However her reasons for expanding overseas was not just to grow her revenue but also to mitigate risk.

So when she sold her operations in Australia, she knew that funds would take a hit as she had to invest to build up her overseas operations. And secondly, she did not know the markets and have the contacts and networks that she had in Australia.

What Rein would not have predicted is how savagely the global recession would hit Europe – who did – and how that would impact on her business.

Her company accounts say the increase in unemployment rates and reduction in job vacancies in Britain, France and Germany have made it significantly more difficult to place and sustain long-term unemployed jobseekers in employment.

And the accounts also acknowledge the set-up costs of the expansion of British, French and German operations and its entry into new markets such as Sweden.

Fortunately for Rein, she has won some major contracts this financial year which might turn things around including a seven-year contract worth an estimated $475 million to help the British Government tackle unemployment.

If Rein hadn’t had to sell her Australian operations, it is likely the business would be in much better shape. Even though the Australian market has been battered, Rein would have been able to pull back on some overseas activities, use her base here to absorb more costs and use the good will built up with her Australian staff and networks to get her through.

So note to Kevin: buy your wife a very nice Christmas present this year. You owe her.