As well as these impressive technical specifications, the experience of actually being driven in such a car is a joy. Rear-seat passengers – and many owners will be chauffeur-driven rear-seat passengers – enjoy a near-silent travelling environment and the electronically controlled air suspension remains wonderfully composed. Little wonder, then, that, in 2006, the car beat off challenges from Daimler, Bentley and Mercedes for the Autocar title of best car. Autocar’s Rob Aherne said it won on merit, stating, ‘This is a hard-earned and significant award for Rolls-Royce and British workmanship. It’s been a good 50 years since a Rolls-Royce could honestly be described as best in the world.’
The car has become so associated with Sir Alan that news of the Autocar gong was immediately connected to him in the eyes of the press. The Sun’s headline was typical: ‘Sugar’s car is sweetest motor’.
Thanks to this association, interest in the car has rocketed in recent years, and not just in the motorcar trade press and tabloid newspapers. The Times sent motoring expert and all-round celebrity Jeremy Clarkson to test-drive the latest model. Having been initially sceptical, Clarkson was soon won over. ‘The new Phantom is supposed to be the last word in engineering excellence, a road-going private jet, a luxury yacht with a point, a car that separates and distances you from both the tedium and the discomfort of travel.
‘Ever wondered what it would be like to drive around in Salisbury Cathedral?’ he asked his readers, with typically Clarkson-esque flourish. ‘Well, you need wonder no more.’ After painting such a gentle picture of the Phantom, he then turned to its more robust side, deploying more ebullient imagery that Sir Alan no doubt will have enjoyed. ‘This one looks like it might kick your head in, for fun,’ roared an admiring Clarkson.
The controversial pundit was absolutely blown away by the Phantom. His closing remarks give yet more insight into how the experience of the car would feel from the rear-seat perspective of Sir Alan Sugar. ‘I am in no doubt that this is the best-engineered car ever made. It does not blind you with gadgets or boggle your mind with speed. It is supremely comfortable, but you can still sense what the front tyres are doing, even from the passenger seat. It is utterly and fabulously exquisite and I have no hesitation in giving it five stars.’
But, having given it five stars himself down the years, Sir Alan parted company with the Phantom in June 2008 when he put it up for sale with an asking price of £179,000, although without his famous ‘AMS1’ number plate, which he kept for his new car. Richard Johnson, sales manager at Sytner Rolls-Royce dealership in Knutsford, Cheshire, where the car was being sold, said that interest was huge and fast. ‘We’ve already had a massive amount of interest,’ he said within days of the car going up for sale. ‘I don’t think it will hang around long.’
Sugar was replacing his original Phantom model with the new long-wheelbase Rolls-Royce Phantom, which was to set him back hundreds of thousands of pounds. What a far cry from the days when he bought his first ever car, a minivan, for £50 back in 1967! Who could have dreamed back then that he could go on to make such riches, and to be able to buy such prestigious luxurious cars as these?
Sir Alan’s riches have come through the sort of hard work and dedication to excellence that has been the hallmark of the Rolls-Royce company throughout its equally prestigious history. True, his career has not always run as smoothly as the Rolls-Royce experience promises. But he has kept moving forward, and has done so with the sort of quietly roaring determination that is the hallmark of the finest motorcars of the world offer. And, although he is now in his sixties, his ambition and enthusiasm know no bounds.
One of Alan Sugar’s lesser-known side projects is Amsprop, his real-estate vehicle. Formed in 1985, it had as its first significant purchase a high-street parade in Barkingside, Essex. It grew and grew alongside Sir Alan’s love of the property market and the company now owns an estimated half a billion pounds’ worth of property. Sugar got a real thrill from the property world because there are few things in business he enjoys more than closing deals, and property allowed him plenty of chances to do just that. He was impulsive about it, and colleagues would often be told to close a deal within an hour to buy buildings worth millions of pounds that Sugar had not even personally visited. ‘Everybody has a good laugh at me, because they cannot believe the way I go about doing property deals. I buy and sell properties without even going to look at them,’ he said back then. His approach was also governed by a basic rule that he would not bother with any property worth less than £2 million. It’s all right for some!
Amsprop was a family affair from the start. Sugar first employed his brother Derek, and then his son Daniel. After focusing mainly on regional property, the company eventually began to invest in larger West End real estate. ‘Amstrad was booming away and I said this is my gambling business,’ said Sugar. ‘Why not break it off and start investing?’
He turned to his friend Ivor Spiro and Essex estate agent Douglas Allen Spiro, who suggested Sugar should purchase property at auction. The first deal he did that way was to buy a property in Basildon. ‘It was one of the earliest and best deals I have done. I said to my son the other day, ‘I could do with another 500 of those,’ said Sugar. Amsprop was on the up.
In 1995, he bought Gloucester House – which includes London’s Hard Rock Café – in Park Lane for £13 million. (Seven years later he sold just one of the penthouses within it for a cool £7 million.) However, even this shrewd purchase was outdone in terms of iconic stature by his big deal of the following year. In September 1996, he bought the IBM building on London’s South Bank. The building, which sits next to the National Theatre, was sold by UK European Investments, controlled by the Lewis Trust Group, better known as the owner of the River Island fashion chain. By the turn of the century, there could be no doubt that Amsprop really began to mean business. Reportedly, Sugar was hit with a massive capital-gains tax bill from the sale of his stake in Tottenham Hotspur and opted to invest in West End property in the hope that the rise in capital values would help pay the taxman. He began to splash out on corner buildings in London, where retail rents on the ground floor are higher. These included Albemarle House on the corner of Grafton Street just off New Bond Street, Sackville House at 40 Piccadilly on the corner of Sackville Street, and Bennet House at 54 St James’s Street by the Ritz hotel. Amsprop soon established a core estate in and around Mayfair and St James’s, spending tens of millions of pounds there. As Daniel Sugar, an Amsprop director, said, ‘Mayfair is still the prime location for retailers and office occupiers and we continue to strengthen our portfolio with the right opportunities.’
Looking back over the rise and rise of Amsprop, Sugar made it all sound rather easy. ‘Gambling with electronics generated spare cash, which I flung into real estate,’ he said. ‘We’ve been in this position for ten years, with loadsa money in loadsa property. We entered this market to be safe with flagship buildings and reliable covenants. That’s what we did, but now we’re happy to gamble. We’ve got cash and our buildings and we’ll let the grass grow under our feet if we don’t do something with it. Our main focus now will be to become a traditional property company. We’ll be buying investments and working them hard, possibly breaking them up and trading them on. It’s time to get more involved.’
He was soon adding to the team and the portfolio. ‘Daniel has been managing the existing portfolio for the past six or seven years. I’m not undermining that. He has picked up a lot of the tricks of the trade and knows the Mayfair market and Mayfair traders and agents or villains – or whatever you call them – very well, but we are ready to broaden our horizons into dealing and development. We’re open for business. There’s no deal that would be too big for us to handle.’
In 2008, Amsprop paid Scottish Widows £31.25 million for a prime corner freehold at 291 Oxford Street and Harewood Place, London W1. Daniel said, ‘We have been monitoring this particular investment very closely since it first came to the market. We feel that we have acquired an ul
tra-prime and prominent piece of Central London freehold at a sensible price. We believe that with some active management this property will fit in very well with the rest of our portfolio.’
Looking back over his successes to date, Sugar said that, despite his having purchased many glamorous and iconic properties, his favourites were often more down-to-earth affairs. ‘One of the greatest buildings I ever bought was a warehouse on the intersection of the M25 and A12 fifteen years ago,’ he said, with a smile. ‘I paid £800,000 for it. My advisers told me I was stupid, and my Jewish advisers called me a schmuck. But for ten years it has been paying me more than £500,000 a year in rent.’
Unsurprisingly, he is far from being a fan of agents. ‘I pay far too much in agency fees, as I keep telling my son. I have been buying for twenty years and have never sold anything, so one day I will test these people.’ He tells a story of an agent who, during a deal to buy property in Park Lane, told him, in an Eton accent, that nobody would pay the prices Sir Alan was hoping for the properties. ‘I said to him, in my Hackney accent with a few expletives added, that when the right person comes along and falls in love with the place then they’ll pay anything for it. That’s exactly what happened.’
No doubt the posh agent scuttled off with his tail firmly between his legs.
‘Amsprop is set up more as a family pension fund than a traditional property company,’ said Daniel. ‘While we are not averse to trading opportunities, our main aim is to hold good-quality freehold property for the long term.’
Nowadays, most of Sir Alan’s fortune comes from his property empire. But, there have also been some less successful ventures along the way, such as the Amstrad em@iler. A device that lets you send emails via a fixed-line phone, the em@iler seemed a brilliant idea when it was launched in 1999. At the launch, Sugar revealed that he had made them in China, and jokingly defended this decision, saying, ‘My em@ilers are made down the road from Dyson’s new factory.’ This referred to the vacuum-cleaner tycoon’s decision to make his machines in Malaysia.
He employed his son Simon to work on the project. ‘Business is business, and family is family, and the two things are kept completely separate with us,’ said Simon, who joined at the age of 26. ‘He treats me like any other employee, and that’s how it should be.’
Launching the product in 1999, Sir Alan said, ‘I see the em@iler becoming the “all-in-one communications centre” in the home. It will also be regarded as an “electronic billboard”, providing advertisers with a highly cost-effective way of targeting consumers. In true Amstrad tradition, the em@iler brings email to the mass market for the first time in an easy-to-use format at a very affordable price.’ Sir Alan said the em@iler would cost £79.99.
However, the initial response was subdued, and more than 17 per cent was wiped off the value of Amstrad shares on the day of the launch. One analyst said, ‘The group’s new em@iler product may well be a winner, but it would have to be something spectacular to have justified all the hype which has been surrounding this company for several months now.’
Sir Alan dismissed all the negativity, insisting that the ‘City scribblers’ had got it wrong. ‘I am not ready to be put out to grass yet,’ he said. ‘We have launched enough products over 25 years to know which ones are going to fly off the shelves. You can tell from customers’ reaction very early on whether a new product is going to be a winner.’ The first batch of 500 em@iler phones were sold out within two days, he said.
However, the press seemed to scent blood in this project and reacted accordingly, slating it on a regular basis. ‘Amstrad profit hit by em@iler’, claimed the Daily Mail. ‘Sir Alan Sugar’s Amstrad has sold nearly 5,000 em@ilers a week since it went on general sale early this summer. But the heavily subsidised sales, of 70,000 units so far, come at a heavy cost. They knocked £2.3 million off profits in the June year and the costs continue.’
But, in 2002, Sir Alan was still bravely defending the em@iler. ‘People say I’m nuts, but the em@iler is as cheap and useful as a phone, before you consider everything else it can do.’
Soon, the picture did indeed appear much brighter. ‘Amstrad back in black as em@iler sales improve’, announced the Financial Times in September 2003 as Amstrad halved the price of the unit.
A spokesman explained the pricing decision: ‘The business model is fine but we need more sales.’ Commercial director Simon Sugar said, ‘The price reduction will be supported by press advertising and in-store promotions and we are confident that this will increase sales significantly. We have had nearly three years’ experience of running the em@iler business and the revenue per phone has held up well.’
Things were indeed far rosier than the media suggested: they sold almost 298,000 units and claimed a million users during the first four years of the em@iler’s existence. Benefiting from increased subscription revenues and lower production costs, the division turned around from a £5.5 million loss to a £1 million profit on sales of £6.5 million.
However, the media would need a lot of convincing. ‘Jury still out on Sir Alan’s gadget’, said the Daily Telegraph in 2004. The jury may be out, but Sir Alan gave his own verdict. ‘We launched the first em@iler in the middle of all that Internet bullshit, and when it started to collapse we got dragged down with it. The one thing I learned is that money talks. OK? We are in profit now. That answers all the doubters. We will continue to increase profits. That’s the bottom line. You can talk about all that future technology crap, but we are actually in profit and you can’t argue with the facts.’
However, by the beginning of 2006, the facts showed that the em@iler was not firing on all cylinders. ‘Sugar’s em@iler in the firing line as profits fall’, said the Guardian in February 2006. The same year, Amserve stopped making the product, as reported in the Evening Standard: ‘Sugar caned as plug pulled on em@iler’.
The media had been harsh on the product, but by this time Sir Alan had become a major media star himself.
CHAPTER EIGHT
THE APPRENTICE
Nowadays, Sugar is such a celebrity and so regularly in the public eye that it may surprise some readers to learn that he was not always so fond of the limelight. Underneath his straight-talking demeanour, Sugar has a distinctly shy side. During the 1980s, as his business reputation increased as a result of his impressive computer sales, he became deluged with offers for television appearances, press interviews and public speaking, often more than 40 requests each month. Most were turned down. Among these were the sorts of offers that many public figures dream of: the producers of iconic BBC radio show Desert Island Discs, for instance, came knocking on his door. However, he was somewhat more keen on public speaking and his performances there drew widespread praise.
As we saw in the Preface, his direct and charismatic way with words when speaking in public made him quite a magnetic orator. Perhaps it was during one of these events that it first dawned on him that one day he could become a television star. The only question was what genre of television would suit a man like him. Fortunately, the broadcast world answered that for him.
The 21st century has seen the genre of reality television become hugely popular, and therefore big business. So it was surely going to be only a matter of time before a reality-television show based on big business would be launched following the phenomenal success of the early reality shows such as Big Brother.
In 2000, the first Big Brother series to be shown in Britain appeared. As the housemates wheeled their suitcases into the soon-to-be-famous house, television in this country changed for ever. Soon, the music world was muscling in on the reality-television genre, with Popstars forming a band in front of television viewers’ eyes. With the success of that show, and that of the resultant band Hear’Say, there was soon an even more successful reality music show in the form of Pop Idol, followed by Simon Cowell’s new talent shows The X Factor and Britain’s Got Talent. Television was ‘keeping it real’, and the viewers were loving it. But could a reality show based on the wo
rld of business be a hit?
But, because of the immediate smash-hit status that The Apprentice achieved, it is often forgotten that Dragons’ Den was, in fact, the first business-based reality-television show in the UK. The format for this show – which originally came from Japan – is wonderfully simple and effective, as contestants pitch business ideas to a panel of multimillionaire entrepreneurs. They ask for investment in their business idea in return for a share of the equity. The contestants set a figure for the investment and equity, though the latter is nearly always the subject of fierce negotiation, should one or more of the Dragons be interested in making an investment. If they are not interested, the Dragons declare this with an often-thunderously delivered declaration: ‘I’m out!’
The initial five-person panel for Dragons’ Den consisted of Simon Woodroffe, Rachel Elnaugh, Doug Richard, Peter Jones and Duncan Bannatyne. The highly charismatic Woodroffe started the Yo! Sushi chain in Britain in 1997, and he has since also become a motivational speaker. Elnaugh founded Red Letter Days, which offered ‘experience’ gifts, including action events and memorable days out. Richard is a UK-based American involved in technology transfer, commercialisation and business incubation. Jones is a British businessman with interests in mobile telecommunications, television, media, leisure and property. Bannatyne is a Scottish entrepreneur whose many business interests include a successful chain of health clubs.
Sir Alan Sugar Page 14
