Branson. Tom Bower

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СКАЧАТЬ most share prices remained low, and Virgin’s was stuck at around 80 pence, nearly half their original value. Abbott was alarmed. With Branson’s encouragement, he had borrowed over £100,000 to buy Virgin shares at the flotation. He had lost half his money and could not repay the banks. His secret proposal to Branson was radical. ‘Why don’t we privatise the company? Buy the shares back from the public?’ The flotation, he told Branson, had become an albatross. ‘You can’t borrow money using Virgin shares as collateral,’ he explained. ‘Nor can the music business use the cash generated by the airline.’ Branson listened. His second attempt to establish a music business in America was failing to produce profits. Abbott was proving his value, repeatedly pulling levers and shuffling money to keep the group afloat. Thanks to Abbott’s financial engineering, the recent losses of Virgin Retail had been obliterated by transferring Virgin Music’s profits to the loss-making company. Branson regarded his finance director as a Best Brain, a reliable acolyte. Privatising Virgin was a good idea and Abbott, who could retrieve all the necessary financial information from Robert Ford, the group treasurer, was the ideal mastermind of a horrendously complicated strategy. ‘Tell people I’m losing faith in the City,’ Branson ordered Will Whitehorn, his new spokesman. ‘We’re spending too much time explaining and justifying what we’re doing and we get no benefits.’ Neither Stenham nor Harris would for the moment be informed about their idea. Nor would Simon Draper. Having spent so much on cars, art and property, Branson’s cousin would surely oppose the buy-back as a threat to the value of his shares. ‘He’s lost the plot,’ Branson had sniped.

      The sombre mood could not interfere with Branson’s 1987 Christmas party. Eighty business associates had been invited to the Roof Gardens in Kensington for a buffet dinner. Unfortunately, he was late, stationary on the A4 driving into London. ‘Richard is inching his way to the Hammersmith flyover,’ announced a Virgin minion over the tannoy. ‘He’ll be here soon.’ Among the guests, Don Cruickshank and Trevor Abbott kept their distance. Cruickshank’s early enthusiasm after recruiting Abbott had soured. Both had been attracted to Branson’s glamour and his heady ability to turn stones into money but gradually their different appreciation of Branson caused conflicts. While Cruickshank, the careful manager and at heart a regulator, had gradually despaired of the maverick’s addiction to a deal-a-day, Abbott had become mesmerised. Virgin, Abbott appreciated, offered the chance to become personally rich. In Virgin’s headquarters on the Harrow Road, the two men argued about Branson’s erratic lurches and his tiring lust for publicity. Initially, both deferred to a man blessed with exceptional instinct but Cruickshank favoured consistent management rather than impulses. Branson had not concealed his preference for Abbott.

      At the end of a recent dinner, Cruickshank had asked, ‘Who was that sitting next to my wife?’

      ‘Phil Collins,’ replied another Virgin employee.

      ‘Who’s he?’ asked Cruickshank.

      Branson’s eyes shot up. He sympathised with Robert Devereux, his brother-in-law, who, during an argument in Spain, had pushed Cruickshank into the swimming pool.

      But Trevor Abbott, Branson believed, was different. The man, unaffectionately known to the twenty accountants rehoused in Holland Park as ‘Black Adder’, knew Phil Collins and loved music. After eighteen months, Abbott had mastered some of the intricacies of Branson’s financial web and had made himself appear indispensable. Working ceaselessly, he spirited the transfers of cash through dozens of different Virgin bank accounts to stave off the perennial crisis. Among the advantages of privatisation, Abbott reasoned, would be the welcome departure of Cruickshank. ‘I want him out,’ Branson had agreed.

      ‘Richard is now on the flyover. The traffic’s awful,’ intoned the camp voice on the Roof Gardens tannoy. Among one group of bankers, the conversation had focused on the plight of Roger Seelig, the banker, under investigation for participating in a criminal conspiracy to support the price of Guinness shares. ‘Richard has cut him dead,’ revealed one. ‘Bit ungrateful,’ commented another. ‘Considering everything, you’d think he’d stand by him.’ Branson, it slipped out, had become fascinated by Seelig’s pitch of ‘playing with shares’. The banker’s eyes rose. ‘Murky,’ he mumbled. ‘Murky.’

      ‘You’ll be pleased to hear that Richard has now come off the Hammersmith flyover,’ gurgled the desiccated voice into a microphone, ‘and hopes to be here in five minutes. The traffic’s awful. He says he hopes everyone is enjoying themselves and says sorry.’

      In a corner, Abbott was talking intimately with a solicitor from Freshfields. Their cryptic discussion concerned the secret decision that Virgin should be privatised. Abbott echoed Branson’s complaint that Virgin was grinding to a halt. Across the terrace was Ken Berry who would fly secretly in June 1988 to Tokyo to find an investor to finance the privatisation.

      ‘I’m delighted to tell you that Richard has just got out of his car and he’s in the hall about to get into the lift. He’ll be with us any moment now.’ Muted cheers and shaking of heads greeted the news. Branson’s narcissism was truly exceptional. No party, he believed, could really begin without him.

      His entry was modest yet the atmosphere changed. Even dressed casually in a pullover he was imposing. Smiling and greeting his guests, he had no apparent concerns about the latest financial wrangle. Juggling the debts had become a normal daily chore. Bankers, he believed, existed to be used and not feared. He disliked their scrutiny. He disliked the independent directors even more. He would spend Christmas in Necker and reveal his plans to privatise Virgin in the new year.

      The welcome diversion was Mates condoms. In early January 1988, Branson flew to Russia to establish a Virgin music company in Moscow and consider organising Virgin holidays to the Crimea, a deal offered by the Kremlin over the years to Harry Bloom, Robert Maxwell and other controversial British tycoons. To his carefully selected entourage of journalists, Branson extolled his offer of giving Mates condoms to the Russians. ‘When I travel,’ he giggled, ‘I always pack my Mates condoms.’ Saucy, sexy Richard appeared to be living up to his pledge ‘to put something back into society’. But his performance concealed growing doubts about Mates. Branson had mistakenly assumed that selling sex was no different from selling records.

      Although thirty-five million condoms had been sold in the first six months, a spectacular success towards capturing one third of the NHS market, the sales of Mates began suddenly to crumble. His publicity campaign evaporated. Branson’s trading loss was over £1 million and rising. Not only had shops refused to sell Mates for no profit, but the senior directors of local health authorities, the major purchasers of condoms, were rejecting Mates despite the low price. Doctors resented Branson’s gimmicks, especially his giant advertisements on hoardings. Those visiting family planning clinics were rejecting Mates and choosing Durex.

      Their preference, to Branson’s irritation, was not based on familiarity. In early 1988, Colin Parker at the Family Planning Association received complaints about Mates’ shape and quality, substantiating the instinctive suspicions by doctors and their patients that the cheaper product was inferior. Men were alleging that Mates condoms ‘split’ and ‘burst’. A damaging report in the Guardian had fortunately been retracted with apologies after threats from Virgin, but the newspaper’s appraisal had been accurate. John Jackson, Branson’s appointed condom supremo, had discovered that the American manufacturer, to save money, had failed to conduct air inflation tests on the condoms. In the rush to finalise the deal, Branson and Jackson were unaware that Ansell’s factory in Alabama had also suffered production problems. Subsequent scientific research would confirm that Mates gave ‘a sub-standard response to the airburst test’. Edward Shaw, Mates’ marketing manager, reported that Branson’s challenge to Durex was provoking customers to castigate him for ‘obviously just sticking his finger in the pie because it was another big market to make lots of money’.

      ‘We’re getting out,’ was the message. The complaints and scepticism СКАЧАТЬ