Lord Street Food
In the new series of the Apprentice, the candidates will try their hand at street food. I interviewed Lord Sugar, back when he was plain old Sir Alan. And I loved every minute of it. Almost……..
It’s not easy, being a man of the people – not when you’re sat behind the wheel of a vintage Rolls Royce. But Sir Alan Sugar (“you can call me Sir Alan”) is trying his best. “Here” he says, easing the car to a graceful halt. “Elton John stitched me up with this Roller. I bought it at auction – on the phone. Bid against myself, I reckon. Done up like a kipper I was.” He won’t tell me how much he paid. After all, he doesn’t want to appear gauche. “But let’s just say it was three times what it’s worth. Just because it belonged to Elton. And I’m a shrewd businessman? You reckon?”
Sugar isn’t the only one to ask that question: analysts in the City want to know if this shrewd businessman is quite as shrewd as he used to be. After all, Amstrad – a conflation of ‘ams’ (Alan Michael Sugar) and ‘trad’ing – was once worth £1.2 billion. Now it’s worth £180 million. In 2004, Sugar couldn’t even drag himself along to the AGM. Pensions Investment Research Consultants, an organisation which advises on matters of corporate governance, recommended that Amstrad shareholders get rid of him – and fast.
It shouldn’t bother Sugar – according to the 2004 Sunday Times Rich List, he’s worth an estimated £703million. But it does. In fact, he is bloody indignant. “The shareholders are looked after by me” he says. “And they should be very thankful. I run Amstrad as if it was my own. They get their accounts every year, they get their profits and their dividends. And if they don’t like it – if they don’t like it – they should sell their shares. But I will run my – the – company the way I want to. Not the way some twat in the City wants me to.”
The old-school bluster fits perfectly with the Rolls Royce. And its smell of stale cigar smoke. But Sugar actually prefers the Bentley – with the personalised number plate AMS 1. “The number plate was just a bit of fun” he says. “It’s 40 years old. I had it on my bloody Mini van.” He knows it’s a little bit, well, wide. Wide or not, it didn’t stop him buying AS1 for his wife Ann. As Sugar walks towards his front door, he looks like a man totally at ease with himself. A man who doesn’t give a monkey’s. A man with nothing to prove.
His house isn’t a marble monument to excess. Not a bit of it. Apart from the private lounge-bar with premium optics. The grounds are modest, and from the living-room sofa you can see the top of the drive and the bottom of the garden. It’s a six- or seven-bedroomed (“depends whether you’re buying or selling” says Sugar) executive home, with two tennis courts, a swimming pool and video entryphone facility. When you consider that the owner is three times richer than Madonna, it doesn’t seem excessive at all.
Sugar bought the house, in the definitively Essex town of Chigwell, 26 years ago. Admittedly, he has got two others – one in Spain, and one in America – but why on earth would he choose to set up home in Chigwell? “I was born in Hackney” says Sugar. “When you’re born in Hackney, and you do well in life, you move to Chigwell.” It’s also handy for the M11 and the M25, with easy rail links into central London and, well, Brentwood. And Brentwood is the home to Amstrad’s headquarters.
Sugar walks into the living-room, and perches on the edge of the sofa. He adjusts the cufflinks on his shirt, and sighs. In his book, The Apprentice – How To Get Hired Not Fired, it says “Learn to read body language”. And if I’m reading it right, I feel like I’m looking at what Sugar calls ‘the silent close’. “It is usually used after the point when you have proffered your best deal and you’re implying: ‘I don’t mean to be rude, but I’m going now – this is your last chance’.” It’s a little early for ‘the silent close’, but Sugar is hoping to keep the interview brief.
The room is full of family photographs. And by the French windows, leading onto the garden, is a pile of over-sized books by La Rochefoucauld. The 17th-century French writer had a cynical, misanthropic view of the world. And an ability to keep his cynicism and misanthropy brief. “True eloquence consists in saying all that is necessary,” he wrote, “and nothing but what is necessary”. Sugar is famous for saying nothing but what is necessary. His favourite e-mails read “yes” and “no” . Like Rochefoucauld, he’s no fan of smalltalk.
Sugar’s friend and PR man, Nick Hewer, remembers the time that Sugar sent a fax to a video recorder manufacturer in China. “Brilliantly funny” says Hewer. “Brilliantly funny. They had the office rolling around. ‘Dear Mr Ching Chang Chong, we received your video. It is shit’. All spelt out in bold. In capital letters. Every sentence was four words long. There was absolutely no fear of Mr Ching Chang Chong misunderstanding exactly what he was saying. His use of language is very explicit, but he has this real ability to communicate.”
If he wants to. After all, he is the man who turned down Radio 4’s Desert Island Discs. The man who refused a Bailey photo shoot. And the man who declined dinner at Number 10 because it clashed with his birthday. He did go on Room 101 – not because he thought there was mileage in it, but because it was one of his favourite shows – and listed “men who wear wigs” as one of his pet hates. But when Paul Merton asked him to wear a wig, as a joke, Sugar cut him dead. It was painful to watch. Sugar doesn’t like someone else being boss. That’s his job.
Sugar wants to be a straight-talking, no-nonsense role model. That’s why he agreed to present BBC reality show The Apprentice. He had an idea that the first series would be a masterclass in business (it wasn’t) and a showcase for the best in entrepreneurial talent (it wasn’t that either). But it did give an insight into Sugar’s way of doing things. As he says at the beginning of The Apprentice, “I don’t like liars. I don’t like cheats. I don’t like bullshitters. I don’t like schmoozers. I don’t like arse lickers”. Sugar made business look sexy.
The first series was enough of a success for Sugar to agree to a second, putting another set of entrepreneurs through the most gruelling job interview of their lives. Sugar says he’s still looking for “the next me”. And considering he’s nearly a billionaire, there has been no shortage of volunteers. “But you can forget about flashing your eyes or having a handsome attack” he says. “It ain’t gonna impress me”. You better believe it. The series began with 14 candidates – by the end, 13 will be told “You’re fired.”
It’s already causing a stir. In the first task of the second series, the teams were asked to make money by buying and selling fruit. But while the boys got the best wholesale prices by barter, the girls did it by flirtation. And, in the boardroom, came under attack from Sugar for using sex to sell. Contestant Karen Bremner was indignant, and said Sugar was talking old-fashioned nonsense. “We got reprimanded for having a laugh with the market traders” she says, “but if we had adopted a formal business tone they would have felt patronised.”
Sugar reckons we all need to understand business. All of us – even Janet and John. Sugar opens an imaginary book. “Mummy gets £100 a week from Daddy because Daddy goes to work” he reads. “If Daddy doesn’t go to work, Mummy doesn’t get the £100 and Mummy can’t go to the shop to buy bread. If Daddy wants to get more money he can start his own shop”. Sugar is frustrated at how out-of-date the modern curriculum is. “At the age of 18” he says, “suddenly it’s ‘Ooh. I’ve got to do something called ‘work’. But I’ll have my gap year first’.”
He has given his fee for The Apprentice to Great Ormond Street. Not terribly generous – the programme is, after all, on the BBC. But Sugar is desperate to be seen to put something back. “One of the things I wish to avoid is people saying ‘What’s he doing that for? Hasn’t he got enough money?’ I really hate that feeling. So if I write an article for the newspapers, or do an advert [like the recent campaign for premium bonds] you’ll always see ‘Sir Alan’s fee for this article has been donated to charity’.” And it’s usually to Great Ormond Street.
That’s not just PR. He is a kind, decent man. If it hadn’t been for contractual obligations, Sugar would have dumped the “You’re fired” catchphrase in The Apprentice. “I would have preferred something like ‘Clear off’”. Just that Sugar hasn’t actually fired many people. “Sir Alan is very loyal” says his legal advisor, Margaret Mountford. “People nowadays have a beauty parade every time they do a new transaction. They go round and see who’ll do it more cheaply. If [Sir Alan] thinks you’re providing him with a good service, he’ll come back.”
Sugar was born into the rag trade. After all, his father, an East End tailor, had the contacts. And the local garment factory was a good, regular employer. But life didn’t work out like that. While he was still at school, the local greengrocers offered to pay him to boil beetroot in a baby’s bath. It meant a 6am start, but the 11-year-old liked the extra pocket money. Then he moved up to making ginger beer – and repackaging rolls of black-and-white film. By the time he left school, Sugar was earning more than his father.
His first proper commercial venture – selling car aerials to vehicle accessory shops – was a £100 start-up. That was the business plan for 1. a Mini van, 2. third-party insurance and 3. £42 worth of stock. The venture was a success. “But I was never going to be a Rabbi or a priest, put it that way” says Sugar. “I was a salesman. And salesmen sail close to the wind. But I’m an East End trader. And that means – speak to the people I do business with – you don’t need any contracts from me. If I say ‘It’s done’, it’s done.”
As the profits grew, Sugar expanded into audio equipment. And, at the age of 21, he set up Amstrad. “My culture has always been one of producing products which are packed with specification,” says Sugar, “but which are priced at a level most people can afford. The mass market. One’s got to be realistic about where Amstrad sits in the market. It’s not Bang and Olufson. It’s the truck-driver-and-his-wife end of the market. By using technology, I’ve brought products to people who would not normally been able to afford them.”
Sugar hurried along the British consumer electronics revolution. But maybe, sometimes, hurried it along a little too quickly. The story goes that the button on his stereo unit marked “Noise Reduction” wasn’t actually connected to anything. “Rubbish” says Sugar. But he admits it wasn’t as sophisticated as Dolby, which reduced hiss but left in the triangle player. “My way was much easier” he says. “A capacitor straight across the output which shut off any frequency beyond 10,000khz. It got rid of the 15,000 khz hiss, but I’m afraid I lost the triangle player.”
Amstrad became a household name when Sugar moved into personal computers. “They did exist,” says Sugar, “but they were £4,000 a time. I made a commercial version for £400. ‘Let’s get rid of the typewriters folks, and we’ll have one of these’. No-one else had the balls to do that. IBM didn’t have the balls. They would have said ‘It’s not industrial quality’. Sorry, but that’s not the point. Think of the painfulness of typing. A mistake? Oh shit. The whole page has to be redone. Cut and pasting? Deleting? Spell-checking? It changed the way people do things.”
Not for long. The hard drive controllers in the PC2000 simply didn’t work, and the series had to be withdrawn. It was a disaster. The court awarded Amstrad more than £57.5 million pounds in compensation, but that was poor recompense considering the damage that had been done to the Amstrad name. And the rumours that Amstrad PCs were prone to overheating didn’t help. It would have been enough to close down other companies. But Sugar was already setting his sights on the satellite TV revolution, and a growing market for set-top boxes.
After 25 years of business, Sugar was also looking elsewhere for his excitement. Which is why he took the job of Chairman of Tottenham Hotspur FC. “It certainly wasn’t about a love of the game” he says. “It was the old blue and reds. We were blues. And someone else was reds. You supported your football team. Taking the Spurs job was all about that. And thinking that I was going to have a bit of excitement. I thought ‘Yeah, I’ll diversify, see what this football is all about, and at the same time rescue the family club from dire straights’.”
His mistake was to make a profit. “Football is about the only industry in the world where it’s embarrassing to make money” says Sugar. The fans saw him as a money man – a business sort, trying to bring buy-low sell-high to football. They wanted him to invest in more players, even if it meant getting the club into debt. “Sorry” says Sugar. “What can I say, but I touch things and people say they turn to gold. Sorry. It’s a natural instinct. Sorry. I had to apologise that the club actually started to make a profit. Sorry. We should have been doing our bollocks like everyone else. Sorry.”
Tottenham’s first Premier League season ended with an unremarkable mid-table finish, and the club’s manager, Terry Venables, was removed from the board after an acrimonious legal dispute. “I remember the scenes at court” says Hewer. “We had to bundle [Alan] into a lift and get him out the back door because there were all these hooligans. Spitting at him. Shouting a lot of anti-semitic nonsense. Whether they came from the far right, I don’t know. But we filmed them, secretly, and gave the footage to the police.”
Amstrad is unmistakably his home. In the reception of the Brentwood HQ, he has a dedicated lift that takes him straight to his tenth-floor office. And, in his big, grey boardroom (it’s clean, you understand, but terribly grey) his chair is bigger than anybody elses. It is Sugar’s kingdom. And where he comes to generate The Big Idea. “With the exception of some products in the audio range,” he says, “I don’t think I’ve ever delegated the responsibility of dreaming up a product. What I call the key, blockbuster products have all been down to me.”
But Amstrad isn’t what it was. “It was a giant company up until 1997” says Sugar, “Then we said ‘The company’s actually worth £600-700 million, here’s £300million in readies. Bang, we’re going to give that back to you the shareholders’. I got quite a bit of that because I had 35 % [of the company] at the time. Then we sold off the mobile phone company, and broke off the computer side of the business and formed Viglen, which is another company I own, leaving Amstrad as a small telecoms satellite receiver company.”
But that’s the thing about technology companies – big or small: there is always something new to make. “I’ve lived through the steam-driven fat cartridge Philips VCR when it first came on the market” says Sugar. “It had an analogue clock on it – it was a £1,400 Jodrell Bank lump of equipment. The first video machine I produced was £700. Now they’re £49.99. But who wants one? That’s the fascination of this industry. We don’t go to work because we have to. We go to work because of the excitement of developing a new product.”
That excitement, sometimes, gets the better of him. Like the way he has staked his personal reputation on the Amstrad e-m@iler. This odd little machine – designed to move Amstrad forward – was, essentially, a souped-up telephone with a screen for emailing. But the third version of the machine, with a colour screen, was badly delayed, and launched at almost the same price as an all-singing, all-dancing laptop. It stopped production around Christmas. But Sugar is refusing to drop it. He promises a fourth version by the end of the year.
Sugar’s faith in the e-m@iler won’t be shaken. He believes that, in the future, everyone will need a screen to bring data into their home. An electronic Yellow Pages, if you like. “You might argue ‘Well, isn’t that a PC?’. Well, no. Because a PC is a cumbersome bloody thing. You’ve got to press a button, wait for it to boot up, fart a couple of times and then the hard drive kicks in. Then you’ve got to do some key stroke to get to the programme you want. Then you’ve got to go to www blah blah blah. The e-m@iler will be simpler.”
Sugar’s single-mindedness is a strength – if Amstrad is doing the business. But, since the company has been struggling of late, analysts have talked of it as a weakness. He has been Chairman and the Chief Executive of Amstrad since the former CEO resigned in October 2001. Which isn’t considered best practice. And he has a son on the board, even though he sold his shares in November. The balance of power and authority in Amstrad seems to have disappeared. And, theoretically, Sugar has too much control.
PIRC took it upon themselves to voice their concerns. “Sir Alan serves as the chairman/chief executive, with a further four executives sitting on the board, including his son. In addition there are two nonexecutives, only one of whom we consider to be independent. The potential risks of a concentration of power at the head of the company and the lack of independent representation on the board are well known. As a result we are recommending opposition to the re- election of Sir Alan to the post of chairman-chief executive.”
The Co-operative Insurance Society (CIS) added to the mounting criticism in November last year by awarding Amstrad the wooden spoon for the worst Annual General Meeting of 2005. “Amstrad’s Chairman Sir Alan Sugar did not attend because he was ‘away on business’,” said Ian Jones, Head of Corporate Governance at CIS. “For a PLC, what more important business can there be than the annual shareholders’ meeting? And to make things even worse, the deputy chairman was also away on business.”
“First up, we don’t have a deputy chairman” says Sugar. “But I think it was the first time in 25 years that I couldn’t make an AGM. The AGM has its date set in concrete – three or four months in advance. It has to be set because it gets printed in the annual report that goes out. And something just came up. But I don’t have to be at the AGM. It’s just some little stupid little idiot writing stories again. And he can go and fuck himself. He can stick his bloody share certificate right where the sun don’t shine as far as I’m concerned.”
Amstrad’s half-yearly results in December were better than the City expected. But the company left itself with over £40million of cash. That’s 25% of the market capitalisation. Analysts suggest that Sugar is keeping Amstrad cash-rich because he’s lost the hunger. He is getting ready for retirement. Sugar dismisses the idea out of hand. “I can’t just go out and spend the cash to keep people happy” he says. “I tell you, if there’s a deal to be done, I’ll be the first one to do it. You can be bloody sure of that.”
There is a genuine entrepreneurial streak about Amstrad – and Alan Michael Sugar. Unlike Sinclair and Dyson, Sugar may still be one of the first UK innovators to come up with not one but two world-beating products. “Having said that, we’re in a fashion industry whether we like it or not” says Sugar. “And things change.” Sugar will do his best to change more quickly. Like he says, “I can tell you where every screw, and every nut, and every bolt is in my company. I know everything [in my business]. Never ever underestimate me.”