Branson. Tom Bower

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СКАЧАТЬ shop in Oxford Street. ‘We’ll put an ad in Melody Maker,’ suggested John Varnom, ‘about lying on the floor, listening to music, smoking dope and going home.’

      ‘Great,’ laughed Branson. Nothing more was said or expected. Branson often communicated only in monosyllables. Miraculously, dozens of admiring customers regularly queued to enter the first-floor shop. Long-haired hippies slouched on waterbeds listening to music on headphones while others waited outside to enter. A truth had dawned on Branson. Most people were born to be servants and customers. He would be master, provider and richer.

      The increasing flow of cash from the record sales and the growing popularity of Virgin among music fans encouraged Branson’s dreams of expansion. Profiting from his employees’ agreement to earn just £12 per week, Branson was secretly accumulating a fortune. Rifling through Branson’s desk, John Varnom had discovered a building society cash book showing a £15,000 deposit in the name of Richard Charles Nicholas, Branson’s three Christian names. ‘Cheeky bastard,’ whispered Varnom. Even in 1970 Branson’s finances were attracting controversy. Private Eye reported that Branson had received £6,000 for advertisements in Student but only admitted to £3,000, which Branson vigorously denied. Indeed there was no evidence that he had. Varnom said nothing about the cash book. The amount was too large to envy and the notion of equality, Varnom knew, was bogus. Besides, he knew no better alternative to working and living in Branson’s kingdom, especially after the realisation of Tom Newman’s idea.

      The search for a recording studio had terminated in March 1971 at a seventeenth-century Cotswold manor house in Shipton, five miles from Oxford. The price was £30,000. ‘How are you going to pay for it?’ asked Newman, mystified. Branson smiled enigmatically. ‘You’re an imperialist,’ Newman, a rocker without a bank account and unaware of overdrafts, grunted. He remained puzzled how a twenty-one-year-old hippie could find the present-day equivalent of £275,000 while his employees were earning £12 per week. The unspoken explanation was Branson’s unique fearlessness about debt. Money was unthreatening to a man certain of success who assumed that risk would be rewarded.

      To buy and convert the manor and outhouses into bedrooms and a recording studio required capital. Branson approached an aunt for a gift. She was advised by her stockbroker to offer only a loan. Branson received £7,500, a sufficient sum for an application to Coutts, the bank shared by the Bransons and the royal family, to advance a mortgage for the remainder. The trusting bankers, reassured by the Branson family’s reputation, did not question Virgin’s cash flow from the shop and mail-order business, or discover the purchase tax fraud and the sale of bootleg records. Even after his arrest, there was no unpleasantness between the bankers and their client.

      As for the £60,000 tax payments and fines, his cabal assumed the same Masonic relationships which had saved Branson from conviction and public humiliation would arrange the money. None could imagine that his imminent collapse could be forestalled only by a bravura performance.

      ‘On my life,’ Branson bluffed to his creditors, ‘Virgin’s finances are fine.’ The company, he repeated, was not in financial peril. The flow of cash from fifteen new Virgin record shops opened across the country substantiated the denials of fragility. Branson and Powell precisely timed the opening of each shop in a different town to secure interest-free cash for two months before payments were required. Other sources of income remained undisclosed. Walking a tightrope was intoxicating but the chaos had become perilous. Virgin Records was not incorporated as a company. Branson had forgotten the legalities. His employees paid neither tax nor national insurance. For four years, he had been trading without proper financial accounts. Bereft of cash, Branson was perplexed how to equip Tom Newman’s recording studio at the manor. ‘Let’s play roulette at the Playboy Club in Park Lane,’ he suggested to Newman. ‘I’ve got a winning system.’ Using £500 taken that night from the till of Virgin’s shop in Notting Hill Gate, he and Newman shuttled between two tables as Kristen Tomassi, his blonde American girlfriend, gazed with increasing bewilderment. ‘It’s the last bet,’ Branson gritted at 5 a.m., clutching a few chips. He had risked everything; his system had failed. The flick of the wheel was lucky. ‘Great,’ he sighed as he stepped into Park Lane with £700. Before the shop opened later that morning, the original money was restored and the profits divided with Newman. Twenty-five years later he could speak from experience that the National Lottery compared to the roulette wheel was ‘a licence to print money’.

      Tom Newman’s enthusiasm, Branson discovered, was not matched by his technical expertise. The guitarist knew little about the technology of recording music. For reassurance, Branson consulted George Martin, the Beatles’ producer. Martin laughed. Branson was proposing a four-track studio while Martin was installing sixteen tracks and much more. ‘We can’t afford all that,’ Branson told Newman. ‘We’ll have to busk it.’ They would buy second-hand equipment and Newman would learn on the way. ‘I’ve found some cheap mixers and old speakers,’ announced Newman proudly. ‘But the acoustics won’t be much good.’

      ‘Keep quiet about it,’ ordered Branson.

      ‘The best sound you can get,’ Branson boasted to musicians and their managers in a frenzy of telephone calls and personal visits to lure the unwary. ‘Sell them the image,’ suggested John Varnom, the inventor of the Virgin name. ‘Act the part of the alternative. No suits and ties like Decca.’ Compared to the unfriendly basements hired by the big studios in London, the manor offered a party. Unlimited meals and alcohol served in manorial splendour by four attractive girls, with the promise of huge bedrooms upstairs, created the illusion of a sex hotel with nightly orgies where drugs were served with the cornflakes. In truth, there was less actual sex at the manor than occurred in London nightclubs but Branson calculated that the promise of a party would conceal the inferior quality of the sound and enhance his profits. His intuition proved shrewd.

      Branson persuaded Newman and the eager girls to accept low wages. Newman’s screaming protests when Branson frequently failed to send any money were brushed aside. ‘I’m also not being paid,’ lamented Branson, the victim. None of the uninquiring spirits enjoying his company realised that the principal beneficiary of their own low wages was Branson, focused entirely on his own agenda.

      Circulating among his staff in the Sun in Splendour, the local pub on Portobello Road, puffing their cigarettes, sipping their beer and groping the girls amid jovial banter eased suspicions about an ambitious businessman. Touchy-feely embraces, pecking at cheeks and spasms of generosity defused the impression of a hierarchy and encouraged the notion of the Virgin family. Employment at Virgin, Branson had persuaded himself and his loyal staff, was benign, generous and equitable.

      Occasionally providing a company car, invitations for meals in restaurants and organising holidays for some staff, he was the life and soul of his own party. Acting the fool in front of big audiences, skiing naked down alpine slopes and hosting hilarious mystery away-days terminating in Croydon solidified loyalty and trust in him. For those condemned to dreary office lives, Branson offered the chance to sense magic. Only the cabal, those close to Branson, understood that their garrulous host had created the family as protection from loneliness. Branson required perpetual company to protect himself from boredom. The anti-intellectual was incapable of self-entertainment. But his permanent party could not continue unchecked.

      One year after the exposure of his purchase tax fraud, Branson was compelled to abandon the convenience of concealment through chaos. ‘You’ll have to become directors of proper companies,’ Jack Claydon, an accountant, told Branson. In September 1972, Virgin Records was incorporated and over the following months ten other companies were created. Legal compartmentalisation suited Branson’s instinct for secrecy and provided the machinery to transfer money from one company’s account to another’s, giving the appearance of solvency and preventing bankruptcy in one activity infecting the whole business. ‘I’m spending a lot of my time,’ Jack Claydon told a friend, ‘juggling banks and creditors in order to play one off against the other and help Branson to stay solvent.’ СКАЧАТЬ