Sizing John’s shock victory in the Cheltenham Gold Cup was the icing on the cake for Ladbrokes Coral boss Jim Mullen on Tuesday as the bookmaker put punters to the sword.
Mullen, who also had good news for the City in raising cost-saving targets from the Coral merger to £100 million, cleaned up after favourites were beaten in 23 of the festival’s 28 races.
Sizing John romped home in the big race, beating fancied trio Djakadam, Cue Card and Native River.
The results compare with a disastrous festival last year that triggered a spate of profit warnings across the industry. “It was like night and day,” said Mullen.
Ladbrokes Coral boosted profits 22% to £264 million while digital revenues, which for so long hindered the group, more than doubled to £68 million last year.
But the big threat hanging over the business is a Government review of controversial high-stakes gaming machines, which could cut down stakes from £100 to £2.
Results showed machine takings across its UK shops were up 4% to £802.4 million last year, accounting for more than half of net revenues from its retail business.
What do companies such as Didi Chuxing and Bitmain Technologies have in common? They are Chinese unicorns, part of a long list of tech companies worth more than $1 billion. In fact, China’s business aptitude is such that the country was responsible for birthing 80% of Asian unicorns from 2012 to 2017.
The populous east Asian nation is making strides in its quest to become the world’s dominant player in business and technology. Under its Made in China 2025 plan, the government wants to transform the country into a high-tech manufacturing hub by leveraging state-run subsidies and acquiring intellectual property in a bid to catch up with and then surpass the West.
China is desperate to rid itself of the copycat stigma which has tarnished its reputation for years. As a result, entrepreneurship there has developed at breakneck speed over the past decade and the value of some tech companies such as Tencent or Alibaba has exceeded that of their US counterparts.
According to Xinhua, China’s official state-run press agency, the internet and technology sector grew 18% in 2017, outpacing overall economic growth. China’s strategic approach has already helped the delivery of large-scale projects. In recent years, it has made an effort to invest in its start-up culture, even going as far as incentivising Chinese students abroad to return home and set up a business.
Money is widely available, too. China’s policy for mass entrepreneurship has set aside a hefty $320 billion, a move which will probably take it from an industrial economy to one underpinned by innovation.
The country’s advantages lie around implementation, its structured government approach and the population’s seeming compliance with state edicts. China’s sheer scale is also of benefit for fast-growing businesses and with that scale comes the abundance of relevant data, which is the fuel machine-learning systems feed off. It’s long been accepted that Chinese consumers and tech companies, which operate with the government’s implicit approval, are less concerned with privacy than their Western counterparts.
Although this is quickly changing, there’s an underlying sentiment that Chinese users are more willing to trade their personal data in exchange for greater convenience and safety, although perhaps the more interesting question is whether the notion of privacy is different in China. Regardless, with its easy access to data and potential funding, China will be able to gain better predictions, efficiency and profits with less labour and costs. More importantly, advancements in technology will confer advantages in every sector, from business and healthcare to the military.
While China aggressively rolls out its innovation strategy, the US government suffers further ridicule at the hands of its President, whose only interaction with technology comes in the form of his notorious Twitter rants. Throughout his tenure, it’s become obvious that Donald Trump resents big tech, mostly because he doesn’t understand it, a mistake the leader of the Free World can’t afford to make, especially with China’s ambitions.
Headlines about the Trump administration’s trade war with China typically focus around raw materials such as aluminium and steel, but don’t be fooled: the President’s resurgence of protectionism is most likely driven by anxiety about China’s growing technology prowess.
There are many areas where countries such as the US still excel. For example, China is still second to the US across a range of AI drivers, including hardware and talent. For Chinese innovation to really take off, the country needs to attract and retain its home-grown talent. But, with the government’s full backing, it’s undeniable that China is in the age of implementation.
To keep up, the West must change how it perceives Chinese technology businesses as being mere copycats of Western products. It must also acknowledge that, in some instances, China is ahead by leaps and bounds.
The biggest danger facing western governments and the tech behemoths in Silicon Valley is their widespread complacency and self-confessed supremacy.
China’s pursuit to win the Fourth Industrial Revolution is not just an attempt to match the West’s economic power, but to bypass it. The time has come to pay attention to China’s state-driven innovation strategy or else risk falling behind at our own peril.
Brexiteer tycoon with sales of £3 billion on why he shuns the City and its greedy ways
Hold on, I’d better take this.” Anthony, Lord Bamford, the billionaire chairman of JCB, holds up a hand and breaks off the interview to take a call.
A crisis at its vast Indian operations? A construction giant ordering a new fleet of diggers? Not quite.
“Hellooow Otis! How are you? No… no.” Long pause. “Well, I’m afraid we haven’t got any owls at the moment.”
It’s his three-year-old grandson on the line. Not the kind of call you’d expect the boss of one of Britain’s biggest engineers to be taking in his corner office on a busy afternoon.
But Bamford is not like most chairmen, and JCB is not like most companies. Despite being huge — employing directly or indirectly 24,000 people in the UK alone — JCB is still owned entirely by the Bamford family.
Founded in a Staffordshire garage after the Second World War by his father Joseph Cyril Bamford (“JCB, geddit?”), the family history is everywhere around the place.
Not just in the look of the machines, which still vaguely resemble Joseph’s first brainwave of sticking a scoop digger on the front of a tractor, but in the paternal nature of the organisation towards its staff and the long-term approach to business.
Since Anthony took over in 1975, it has made ever bigger investments in research and development. It has opened 21 factories around the world, from India to the US, and grown from an annual turnover of £44 million to £3.35 billion.
JCB is still based on the site of the old cheese factory in the Potteries that Joseph moved into in 1950.
But these days the place is vast, with a factory 300 metres wide turning thick sheets of steel into yellow backhoe loaders and hydraulic lifters.
The neighbouring offices are enormous, too. Striding from one end of the admin floor to the other adds at least 100 steps to your Fitbit.
When you finally reach the management offices, you’re greeted by a panoramic view over a landscaped lake. That’s a legacy of Joseph Bamford, too. Local folklore has it he had it dug out (by JCBs, of course) in the shape of Lake Geneva, on whose shores he retired in his latter years.
I’d asked to visit because I’d heard JCB was this weird place where the workers actually like the management and tend to stay for most of their working life.
Unless the folk I met were actors, the rumours quickly proved to be true. The driver who picked me up from Stoke-on-Trent station had been at JCB for 22 years. His wife, 32 years. His eldest son had just finished his first decade and his other one was five years in. The factory foreman has been there 24 years. A local family, the Boots, are now in their fourth generation.
More lifers-to-be come through every year as apprentices from an engineering academy school Bamford has set up for local youngsters.
When the firm’s doing well, staff get good bonuses. In the lean year of 2015, they were able to negotiate to cut their hours rather than face redundancies.
So what’s he like, the father figure leading this seemingly contented band? Bamford, 73, is well-spoken, jovial and impeccably mannered, as you’d expect from an alumnus of Ampleforth College, the Catholic Eton.
But despite the polish, he’s a passionate soul. The one issue to guarantee getting his hackles up is the way politicians only focus on the FTSE 100 multinationals and ignore family firms such as his. “There are something like 2000 Plcs, but 4.8 million family firms. Four-point-eight million! They employ 12.5 million people, yet they’re just completely ignored.” Among those, he could have named Daylesford, the thriving organic food and hotels group run by his wife, Carole.
An ardent Brexiteer, Bamford pulled JCB out of the pro-Remain CBI because he felt it was only representing the views of big Plcs. He has no plans to return.
He’s none too keen on plcs, you sense. “I certainly don’t agree with the enormous bonuses people seem to be able to earn,” he says.
I bring up Persimmon’s £75 million man Jeff Fairburn, who’d been in the paper that morning. He grimaces: “The thing is, Persimmon’s not a revolutionary business. The man who built it up… and owned a big chunk of it, you can understand him benefiting. But the paid hands? Were they doing anything extraordinary? No.”
BAMFORD isn’t short of a bob or two himself: the glossies have detailed his houses, the yacht, classic cars. The Sunday Times Rich List puts the Bamfords at £3.6 billion, making them the 35th wealthiest in the country.
But, as he puts it: “We are a family business and I’m conscious every single day that I am risking my family’s capital. That is very different from being a normal salaried person who is not risking anything.”
Bamford has largely steered clear of the City.
He’s convinced that if he’d been a Plc, he could never have made the long-term investments that built JCB into what it is today. City investors wouldn’t hold by the family motto: “Stick and stay and make it pay.”
Take Brazil, he says, where JCB invested heavily in opening manufacturing plants 12 years ago. For a few years, it did well, then political upheaval came along and the economy tanked.
“The market just disappeared so we had big costs, big overheads. But we stayed, and now gradually it’s coming back. Would we have been allowed to do that as a public company? Probably not. They would have made us close it down or sell it off.”
Note to fund managers: JCB has averaged an annual return on investment of 32% since he took over.
“These [City] people,” he says, “they are all very grand. All those people who go to Davos, they do think they’re above the rest of the world.”
The kind of elites that opposed Brexit, perhaps? As a big donor to the Brexit cause, what does he think now? “I’m bored silly with it. Everyone I talk to is bored silly with it.” He says the country never needed a referendum in the first place. “Cameron; I don’t think he negotiated, that’s the truth of it. Has May negotiated properly? I don’t know. Honestly, it is bloody boring and I’m sure Mr Barnier is a very good negotiator.”
He adds with a grin: “My experience of negotiating with French people is that it’s almost the end of the world for them to give in on anything.”
One main problems of family-owned business which he’d like the Government to fix is the legal complexity of passing the firm on from one generation to the next.
So what’s the plan for his three children and JCB?
All have spent time in the firm, but none seem hugely engaged by the Potteries HQ: his son George is working with LVMH on wristwatch designs (Bamford sports a £450 version when we meet); daughter Alice helps run JCB’s West California distribution but lives on an eco-ranch she runs there with her partner and two children; his other son, Jo, left the business in 2016 to spend more time property investing.
So who will take over?
“I don’t really have any plans,” Bamford says. “That looks badly thought out, but I’m the only member of the family who’s here every day.”
He adds he has a professional team below him — including a chief executive — who run the business day-to-day.
“If I popped off, do we have to appoint another member of the family immediately?” he asks. “Definitely no.”
I wonder how he ever had time for his family while building such a global business. “I think I was probably not a great father,” he admits. “I mean, I didn’t play football or anything like that. I was away from my children a lot. But Carole and I try to be with our grandchildren a lot now and love seeing them.”
A family friend tells me he’s being modest about his parenting. The children are famously fond of him, she says. There are seven grandchildren now. I get the feeling he hopes one of them will be running the family firm one day.
Otis: forget the owls, come play with the diggers.
So, after a decade at the top, Paul Polman is putting up his Dove-scented feet.
It’s tempting merely to remember him for his final, bad, decision at Unilever — the aborted plan to ditch London for Holland. But, although UK shareholders are still raw over that affront, it would be unfair to view such a lengthy career running Britain’s second-biggest company through that one lens.
The longer legacy will be the way he nurtured Unilever’s credentials as one of the few vast multinationals with a genuinely ethical bent.
He’s easily criticised for being “Davos Man” — jetsetting from one elitist talking shop to another to make grand statements about corporate citizenship. But behind the dressing, Unilever really is a better business than most to those living around its factories.
It really is a better company than most to work for. It really is more forward looking in its investments in new products.
Most importantly, Polman stressed that those factors were key to its healthy financial future. Unusually, fund managers got it. That’s why he won his greatest battle — fighting off Kraft Heinz.
The two companies could not have been more different. Kraft was the cost-cutting, short-term margin-hunter whereas Unilever insisted on playing the long game.
Kraft’s shares had raced to the stratosphere on the back of its rapid profit growth and Unilever’s had been in the doldrums. Where Kraft spent only £73 million on research and development last year — about 0.4% of its sales — Unilever spent £1.4 billion, 1.7% of sales. But despite the City’s natural instinct for short-termism, Polman won his shareholders over. They stuck with his theory that brands only thrive if you nurture and invest both in them and the people who make them.
Polman did shake off some of Unilever’s flab in a strategic review after winning the battle, but the fundamental shape and ethos remained.
And what’s happened since? Kraft’s shares have crashed 46% and Unilever is up 13%.
The Polman model works.
That means it’s a good thing his long-term deputy and boss of Unilever’s biggest division is to take the helm. His name might sound Dutch, but Alan Jope is a Brit who was not involved in the boardroom gloopthink that came up with Project Dump London. He’s steeped in the long-termist Unilever culture, being one of the many staff who has spent most of his working life there.
Expect more of the same Polman medicine under his rein.
Some observers had predicted finance director Graeme Pitkethly would be next in line. That was never going to happen. Not for the obvious reason; that, lacking in gallantry, Polman left it down to him to sell the awful plan to move to Holland. But for the simpler fact that the FD had never run a big Unilever business before, with all the marketing and management nous that requires.
Pitkethly is chief executive material. Just not at Unilever.
Fashion chain All Saints fell deeper into the red despite more shoppers buying its leather jackets and shoes.
The London business, owned by private equity firm Lion Capital, more than doubled its losses for the year to February 3, from £16.9 million to £34.3 million.
This is despite a fifth consecutive year of growth in sales as it tries to focus more on online orders and international growth. Revenues were up 7.9% to £327 million from £303 million the year before, Companies House accounts show.
Its chief executive of six years and ex-Burberry executive William Kim, left the business to join Lion in September. All Saints’ chief operating officer Peter Wood took over.
Wood said investments in wholesale, licensing and franchising had hit profits but the benefits of spending were already showing through.
Separately, fellow fashion brand Karen Millen, which bought rival Coast from administration last month, made sales of £161.9 million for the year to February 24, up from £158.8 million.
Losses narrowed from £9.2 million to £1.4 million, according to accounts for Karen Millen Group Limited, a subsidiary of the parent company.
In December 2009, Italian and British authorities closed a £100 million betting firm operating out of west London in a huge police operation against a family allegedly connected to mafia groups.
Paradisebet, which was making fortunes from the booming market for online sports and casino betting, was accused by prosecutors of hiding the ill-gotten gains of the Martiradonnas, a family linked to the Sacra Corona Unita crime syndicate from the city of Bari.
UK police hailed this a successful example of trans-national policing. The alleged culprits were arrested, the company’s assets frozen and its gambling licence readily cancelled.
The swoop was widely celebrated in the British press. However, what was not reported was that the Martiradonnas were later acquitted in the Italian courts and their gambling empire simply moved to Malta, according to newly released police records obtained by the Investigative Reporting Project Italy.
The Martiradonnas continued either living in London or owning luxury properties here, allegedly making millions of pounds and euros from the business’s new home.
Last month, Vito Martiradonna, 70, and his three sons, Michele, 49, Francesco, 45, and Mariano, 37, were arrested in Italy on charges of money-laundering, fraudulent gambling activities and of “aiding a mafia-type association”.
The allegations, if true, show how gaming companies chased out of one EU jurisdiction by regulators can simply switch to another in a way that will shock those outside the industry.
Paradisebet was launched in the early 2000s in a commercial district next to Heathrow airport. Italian prosecutors allege that, although based in the UK, the outfit was funded with illicit capital acquired by Vito Martiradonna during his tenure as “cashier” of the feared Sacra Corona Unita crime group.
The company started modestly but within a few years, its annual revenues surged to more than £100 million. That was thanks, in part, to the launch of a new brand, Bet1128, but also, according to the police, to an ever-expanding network of betting shops in Italy. These were allegedly controlled in conjunction with some of the world’s most feared organised crime groups such as the ’Ndrangheta and Cosa Nostra. All the while, the money was allegedly flowing into the London holding company.
PARADISEBET in the UK was seized after the 2009 bust. But by the time of the arrests, it was nothing more than an empty shell stuffed with debts. It was liquidated in 2012 leaving creditors, including HMRC, out of pocket. Vito, Francesco and Michele Martiradonna were cleared in 2012 of illegally trying to dodge legislation designed to confiscate assets of mafia members. By then, Bet1128 had been sold by Paradisebet for £10 million to a Maltese company, Centurionbet. On paper, the Martiradonnas had no affiliation with the new owner, and have previously denied being involved. But Italian police wiretaps show that the three brothers were allegedly pulling the strings behind the scenes.
Francesco Martiradonna, in particular, is accused of being the mastermind of what prosecutors describe as a vast illegal gambling enterprise spanning three continents. Despite lacking authorisation from Italian gaming authorities, Bet1128 opened hundreds of shops across Italy.
EU laws theoretically allow this, but only if the bricks-and-mortar bookies solely act as an intermediary providing access to the online gambling platform. However, Bet1128 allegedly allowed customers in the shops to bet in cash, generating huge pools of undeclared, untaxed, money. Staff — often said to be representatives of the local mafia group — delivered bundles of cash to the Martiradonnas and their associates, or transferred it via untraceable UK-based money services, like Skrill or Neteller, the case alleges.
Paysafe, which controls Skrill and Neteller, said it took its regulatory obligations seriously and was “very concerned” about the claims. Italian investigators say the group’s alleged activities highlight the “radical shift” of mafia groups into “white collar” industries. In the alleged wiretapped words of Francesco Martiradonna to the son of a former mafia boss: “I look for new affiliates in the best universities of the world, while you still run after four idiots on the streets that do this: Bang! Bang!” Mimicking the sound of computer keys, he adds: “I look for those that do this, instead: Tap! Tap! Those that click and make money spin around.”
Investigators estimate Centurionbet’s revenues were more than €650 million (£580 million) a year, part of which is believed to have found its way into London property. The Martiradonnas were already property owners in the UK: in December 2003, when Paradisebet was getting under way in west London, eldest brother Michele bought a five-bedroom detached house on the outskirts of London in the quiet, leafy neighbourhood of Denham, now estimated to be worth more than £1 million. When the Evening Standard visited, a Bentley was parked in the driveway. The house is now apparently rented out. The occupants did not answer but a neighbour said they too are Italian, keep themselves to themselves, and have several luxury cars.
THE other known Martiradonna property is in Brentford Locks. Overlooking the marina, the apartment was purchased by Mariano Martiradonna in 2006 for £540,000. The three brothers were registered as residents until 2015.
Citing wiretaps, investigators believe two more properties could have been added to their portfolio more recently. The warrant also indicates that, until his arrest, Mariano frequently travelled to London to collect rent payments and deal with administrative tasks.
The UK gambling authorities said they worked with payment processors such as PayPal and Visa to stop gaming firms selling bets to British companies without a licence. Michael Levi, professor of criminology at Cardiff University, said the case highlighted the importance of co-ordination between regulators across borders. “Did the British watchdogs give the Maltese the information on these people? Is Malta looking merely for local intelligence on whether to grant its certifications?”
He added: “The problem with online gambling is that the punters can come from anywhere. That’s why it is important for European regulators to communicate among themselves.”
Britain’s withdrawal from the EU is only going to make that co-operation worse, he said. The case of the Martiradonnas shows authorities should be paying more, not less, heed to our European neighbours.
Matteo Civillini is a journalist with the Investigative Reporting Project Italy. Additional reporting by Jim Armitage
It’s better to have a truce in the trade war than another series of salvoes. But that is all it is. The dinner in Buenos Aires between Donald Trump and Xi Jinping has put a 90-day hold on the US decision to introduce new tariffs on Chinese imports for trade talks to take place. But if they don’t succeed, the 25% tariffs Trump has threatened will go ahead.
Since the restrictions already in place have been estimated by the OECD to knock 0.2% off US GDP by 2021 — and rather more off Chinese GDP — you might think that ramping things up further might not be a great idea. General Motors does not think it is. It has said that the steel and aluminium tariffs imposed earlier this year will cost the company $1 billion (£780 million). Though it did not directly link this burden to its new round of job cuts and factory closures, it must have played some part in the decision.
Europe is caught in the crossfire too, because its car exports to the US also face 25% tariffs. A posse of German car manufacturers will visit Washington this week to try to persuade the White House to change policy.
Put like this, the whole idea of a trade war between the US and China seems absurd, a drama created by a former TV show host designed to show him as a hero with a few “wins” in negotiation. International trade, after all, is not a zero sum game. Both sides benefit from it — and both sides are hurt if it falters.
But I think that is the wrong way to think about what is happening. It isn’t just about trade: it is about the titanic struggle for global leadership between the US and China that will dominate the next 30 years.
There are two power shifts here. One is between the developed world and the emerging world, a shift exemplified by the fact that it was a Group of 20 meeting in Buenos Aires, rather than Group of Seven.
The G20 includes the large emerging economies; the G7 is the developed world club. According to a study by HSBC a couple of months ago, emerging countries will generate 70% of the growth in the world economy between now and 2030.
The second shift is between the US and China. China is the bigger contributor to growth and will, HSBC reckons, pass the US by 2030 to become the world’s largest economy.
The US will find this transition extremely difficult: according to calculations by the late Angus Maddison, it has been the world’s largest economy since the 1880s, when it passed… yes, China. (The UK was never the world’s largest economy, though it was the largest European one until it was passed by Germany around 1910.)
So this next decade will see the end of a 150-year period of domination by the US. Of course the US will be much richer per head than China for many generations to come. In a sense it does not matter that China can produce more steel or build more cars than anywhere else. What does trouble many people in the US — and Trump is responding to this concern — is that China has achieved this by unfair trading practices: in particular by stealing American technology. Putting tariffs on Chinese exports is a way to force China to accept more US imports, but also to protect US intellectual property.
Put this way, US policy appears more coherent than it is. Trump is lashing out, rather than planning a long-term policy to contain and channel Chinese economic ambitions. But it does represent a shift from the past, where the US tolerated China pushing trade practice to the limits of WTO rules, and arguably beyond them, on the belief that a more prosperous China would be a source of stability in the world.
That may well turn out to be true, but meanwhile China has built up its economy in part at least by keeping the US out of key areas.
If you take a snapshot of the world’s largest companies by market capitalisation, the US high-tech giants still dominate the league table, despite the recent wobbles. But the only challengers are Chinese: Tencent and Alibaba, both of which are in the top 10 and both of which have grown by adopting business models developed in the US.
If you look at the leading social media groups, the top three networks in terms of millions of active users are American: Facebook, YouTube and WhatsApp. Then comes WeChat (owned by Tencent) and Instagram (owned by Facebook). And after that come QQ and QZone, (both also owned by Tencent), TikTok, and Weibo — all Chinese.
Faced with an increasingly dominant China, America will strike back in whatever ways it can. That is what Trump is doing now. His trade war may not be part of a bigger plan, but it is very much part of the bigger picture — the battle for global economic leadership.
Just as you thought politicians couldn’t do any more to shoot our country in the foot, Westminster council kicks off potential plans to start a new tax on tourists.
It’s hard to imagine a more blinkered, short-sighted and petty idea. The 20 million visitors who come here are a mainstay of our economy, spending £40 billion a year in our city. The hospitality industry employs hundreds of thousands.
Westminster councillors seem to think London is so great, visitors should pay extra for the privilege of enjoying it.
Well, London is great, but it’s also already one of the most expensive cities in the world to visit. We must not take our visitors for granted.
The fear of terrorism has been putting some holidaymakers off coming here, as repeated warnings from hoteliers and attractions companies testify.
And all the while, Brexit gives us an unwelcoming face to outsiders.
Slapping on an extra £2.50 per night on visitors may not sound much, but when you multiply it up to a typical family of four staying six nights, it adds a further £60 to the holiday cost.
Besides, once a new tax is created, it very rarely shrinks. The revenue-raising wheeze of Air Passenger Duty was dreamed up on spurious environmental grounds in 1994. It started at £10 for long haul but is now £78 on economy, £150 on business.
London’s hotels, restaurants and tourist attractions are already facing spiralling rates bills and nightmarish worries about retaining and hiring EU workers after next March.
If anything, we should be giving them tax relief, not adding more duties on their customers.
Let’s put this daft idea to bed once and for all.
Sandberg should now be leaning out
After all the criticism Facebook has received this year for untrustworthy behaviour, you’d have thought its management would have learned to end its evasive instincts.
Yet Sheryl Sandberg has been caught out twice in little over a week being slippery over orders to investigate and attack the company’s critics.
Her target on this occasion was George Soros, because he criticised Facebook at Davos last year for threatening the integrity of elections.
The audacity of the man.
So many mistakes have emerged from Facebook’s hapless executive team lately that major change is surely long overdue. Sandberg’s resignation would be a good start.
When the investment bank Lehman Brothers collapsed in 2008, Bernie de Le Cuona feared for her high-end fabrics business. People were spending less on decorating their homes and yachts and so she had to put her prices up.
“I decided that the only way for me to survive was to go to the top end of the luxury market,” says de Le Cuona, who set up her eponymous business in the capital in 1992.
Although her decision alienated some customers, it helped her keep the company afloat until it was safe to drop the prices again.
“This is the way of business,” she says matter-of-factly when we meet in a café near her newly opened £800,000 flagship store at 44 Pimlico Road. “Sometimes we’ve grown dramatically, then the economy changed and things dropped.”
The business is now expected to turn over £10 million by the end of March, the same as last year, and has 45 staff. It also has two showrooms, in Chelsea Harbour and New York, and a string of distributors across the world.
So far, the founder has sold most of her fabrics, often inspired by her trips to the Hermitage Museum in Saint Petersburg or the Royal Gardens of Versailles in France, to interior designers or architects globally.
Customers have included Nicky Haslam, who has decorated for the Queen, and Ralph Lauren’s home division. Fabric for cashmere curtains could cost up to £1000 a metre, while the basic linen is £100 a metre. It also sells cushions and other accessories.
The store in Pimlico marks a change of tack. The entrepreneur will start selling some of the textiles and accessories made of cashmere, linen, wool, silk and alpaca directly to shoppers. “Retail is the place to be. I know many people don’t think that, but I do. There’s so much talk of shopping online but this is the time to give people the experience that everybody talks about within retail.”
De Le Cuona, the middle child, was born and raised in Pretoria, South Africa. Her father was an engineer and her mother didn’t work. After she studied architectural design she went travelling for a couple of years and ended up settling in Britain. To make a living, she agreed to help out a friend who owned a carpets business in India.
“I saw how incredibly clever they were with fabrics. I thought, ‘I’m sure I can do something.’” She didn’t have a business plan, but had a simple model: “I knew that I needed to buy things and sell them for more than I bought them for.”
She didn’t want to borrow money (“at that stage I just got divorced”) so she taught aerobics to make ends meet. She ordered the fabric in small quantities from India. Her second delivery, however, almost toppled her plans. It got caught in a monsoon and arrived damp. She decided to seek out weavers in Europe and hasn’t looked back since.
She explains that the weavers she works with have to be prepared to experiment and try unusual techniques, such as washing the fabrics with golf balls “to give it a lovely feel”, until she is satisfied with the end product.
It can take up to three months to create a new fabric and in one instance it took years, which explains the hefty price tags. She adds: “I don’t do fabrics like the rest of our industry. I’m not knocking them, everybody has their niche, but we don’t print, and we only weave.”
The entrepreneur, who owns the whole business, has grown it organically from her kitchen table, with help from one other employee at first. She would bring the fabric bolts home from the airport, cut them, repackage them and sell them. When her fledgling start-up outgrew her home, she rented an office in Windsor, where most of the staff are still based, and has opened two warehouses since.
She claims the business has been profitable from “day one” and has no exit plans. “I can’t believe I ever would, but who knows. It depends on the opportunity.”
Ray Kelvin is 63 next week. That’s 10 years younger than Sir Martin Sorrell, three years younger than Sir Philip Green. We’re talking ballpark same generation here.
That all three of them have been accused of behaving — ahem — inappropriately could reflect how the values of certain men of their age are colliding with those of their younger employees. (It should be said the claims are denied.)
In the cases of Green and Sorrell, it’s been claimed that they’re out of touch with their customers, too; Green in his failure to move quick enough into online retail and Sorrell in his sluggish integration of WPP’s disparate business units.
You can’t draw the same conclusions with Kelvin, though. He has managed to keep Ted Baker as a popular and powerful brand both online and in stores, retaining that quirkiness its customers like.
Unlike most rival chains, Kelvin saw the shift to digital retail early and did not get caught out with a large number of shops on long, fixed-term leases. Of his 440-odd stores around the world, three-quarters are concessions where rents are based on sales. Without a large, inflexible rent bill hanging round his neck, he’s been able to invest in online and make the transition smoothly.
Added to which, he’s just coming to the end of major warehouse and IT upgrades in the UK, Europe and the US which will bring savings and allow for faster, more local online marketing in future years.
Ted Baker’s strong international business — now 70% of takings — makes it fairly Brexit-proof, too. In short, it is a solid, well-invested business, positioned for the future.
Thursday’s figures talked of flattish sales amid weirdly warm weather. In a market where rivals are tumbling, that’s not bad.
Turnover was skewed downwards by weak wholesale orders, but that’s always a lumpy business — particularly when you have the likes of House of Fraser and Nordstrom in the US in crisis.
As temperatures chilled in the past couple of months, sales jumped 4% year-on-year. That bodes well, as do online sales (nearly a third of the business) jumping 18% through the quarter.
Yet the share price remains crippled by Hug-gate. Since details of staff complaints against Kelvin emerged, the stock has fallen 27%. That is absurd. You can only justify such a sell-off if you assume Kelvin will be fired, all creative flair at the company will be lost, and he will sell his stake.
This seems unlikely. Even if he does quit, the management and design team is strong. Most have been with the firm a decade or more. The business is in fine shape and, perhaps as importantly, why would he sell his shares now when they’re at five-year lows?
My guess is Kelvin will tame his creepy uncle antics, take a slap on the wrist by the board and get back to work.
Ted Baker will go on to be one of the winners of the retail sector. It’s time to give the shares some love. No hugging, though.
Swiss pharmaceuticals giant Novartis is to move its UK headquarters from Surrey to White City in west London.
It will take possession of some 54,000 sq ft of space on the second floor of the WestWorks building, part of the White City Place development that was formerly the BBC Media Village.
Around 600 staff are expected to relocate by January 2020.
Novartis, the world’s third-biggest pharmaceuticals company by market capitalisation, joins fellow life sciences companies Autolus and Synthace at the site, which is close to the new Imperial College campus.
Novartis employs 1500 people in the UK and is based at Frimley.
David Camp, chief executive of Stanhope, the co-developer of White City Place, said: “The addition of Novartis to WestWorks shows the growth of science and innovation within White City.“
He added: “With the transformation of White City Place and the development of Imperial College’s new campus, White City has confirmed itself as the destination of choice for emerging and advanced life sciences companies.”
