ISSUE SIX: WINTER 2011
hong kong foodie Cooking in cramped kitchens adds a dash of spice to running a catering company
by appointment Silver service allows Hamilton & Inches to shine on Scots owners’ watch
The zenith of moon Rock stars line up for guitars hand-built in a workshop behind a Glasgow pub
nursing the cuts Back to school for the entrepreneur who
sold part of her highly succesful business
ISSUE SIX: WINTER 2011: SCOTLAND EDITION
rubber soul The internet tyre entrepreneur who takes inspiration from Apple founder Steve Jobs’ early days
BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS
Business Quarter Magazine
The new CLS-Class. Available from Mercedes-Benz of Glasgow.
Redefining automotive design. Newly launched, the stunning CLS is a vehicle engineered
And with 125 years’ innovation behind it, it offers much
like no other.
Every bit as refined as you’d expect it to be, it pushes
• Electro-mechanical steering for more assured,
boundaries further still, incorporating a revolutionary new design philosophy. More stylish, more contemporary, more efficient, it is a car of many firsts, equipped with features such as LED headlampsˆ used for all dynamic light functions.
agile handling • 7G-Tronic Plus 7-speed automatic transmission for improved comfort and shift quality • Direct Control suspension for a more dynamic drive • Parktronic with Active Park Assist – enabling the car to automatically steer into a space
Contact Mercedes-Benz West of Scotland Corporate Team: Jacqui Lee, Annmarie Simpson and Paul Harkins 0141 331 4600.
Mercedes-Benz of Glasgow 135 Milton Street, Glasgow G4 0DH 0141 331 4600 www.mercedes-benzofglasgow.co.uk Official government fuel consumption figures in mpg (litres per 100km) for the new CLS-Class range: urban 20.3(13.9)44.1(6.4), extra urban 37.2(7.6)-64.2(4.4), combined 28.5(9.9)-54.3(5.2). CO2 emissions: 231-135 g/km Model featured is a CLS 350 CDI BlueEFFICIENCY Sport at £52,993.00 on the road (on-the-road price includes VAT, delivery, 12 months’ road fund licence, number plates first registration fee and fuel). ˆOptional equipment, standard on the Sport line. Price correct at time of going to press (06/11).
BUSINESS QUARTER: WINTER 11: issue SIX Welcome to our regular BQ Scotland readers and to anyone who is picking up our magazine for the first time. We hope you find something interesting to keep your old grey matter nicely whirring. As ever, the aim of this magazine is to focus on a range of business success stories of Scots at home and abroad, those who have made Scotland their home, and our rich and varied group of entrepreneurs. We make no apology for giving you a longer read, which allows our subjects to tell us a lot more about their lives and work. Among this edition’s interviews there are nuggets of advice and thinking – practical stuff from people and not textbooks. You don’t need to be an economist to understand that the UK and Scotland are in a desperate state. We’ve just had the Chancellor’s Autumn Statement (with expected GDP growth of 0.7% in 2012, 2.1% in 2013 and 2.7% in 2014); and the first mass public strike in the UK for many years over public sector pension reform; while the problems in Euroland appear to be harder and more expensive to resolve. The employment figures, especially among the young, are the worst in a generation. Retail is scraping along the bottom (unless it is luxury handbags and smart phones), and house prices and construction is still in a precarious position. The prospects of the UK and Scottish economy as we head into Olympic year aren’t great. So we really need to celebrate those Scots who do get up and get on. Each interviewee in this issue of BQ Scotland has been a driver of our economy in their own way, providing jobs and making life better. An emerging theme is that we still require to cut back on red tape and time-wasting bureaucracy – which includes a common sense approach to health and safety – and find fresh ways to fund projects, both large and small. We need to know what all our superannuated civil servants actually do – how productive are they in truly stimulating our economy? BQ has been consistent in saying that we have to produce goods and services that people around the globe want to buy to get our economy back
on track. So everyone should be working towards this end. We need a proper comprehensive education system that promotes enterprise and equips our young people with the maths, science and engineering that business needs. We also need our politicians to create a firm constitutional platform so that we can build businesses without sudden and drastic change. So, in 2012, we will need to be certain about what the consequences of a referendum on independence will mean for Scottish firms who do business in the rest of the UK. Will we be in the euro? Or even members of the EU? For most business, exporting means selling goods and services to the rest of the UK first. So we need to assure our neighbours that we have only good intentions towards them. And, since this is going to be Olympic year, perhaps we can reprise the inspirational song that really got Seb Coe and his team going. Sign onto YouTube and click on Heather Small’s motivational: “What Have You Done Today To Make You Feel Proud?”. It still sends a shiver down the spine. Please keep in touch and let us know what you like – and dislike – about BQ Scotland. And if you’re an advertiser who wants to be part of our own success story, please don’t hesitate to contact the commercial team. Enjoy BQ. Have a wonderful Christmas and help make 2012 a prosperous New Year for all of us. Kenny Kemp Editor of BQ Scotland
THE LIFE AND SOUL OF BUSINESS
CONTACTS room501 ltd Christopher March Managing Director e: firstname.lastname@example.org George Cheung Director e: email@example.com Euan Underwood Director e: firstname.lastname@example.org Bryan Hoare Director e: email@example.com Mark Anderson Director e: firstname.lastname@example.org EditorIAL Kenny Kemp Editor e: email@example.com Alastair Gilmour Sub-editor Gillian Law Editorial Design & production room501 e: firstname.lastname@example.org Photography KG Photography e: email@example.com advertising For advertising call 0191 537 5731 or email firstname.lastname@example.org
room501 Publishing Ltd, 16 Pickersgill Court, Quay West Business Park, Sunderland SR5 2AQ www.room501.co.uk room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2011 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, December 2011.
SCOTLAND EDITION BQ Magazine is published quarterly by room501 Ltd.
BUSINESS QUARTER |WINTER 11
CONTE BUSINESS QUARTER: WINTER 11 the boss
44 the zenith of moon Practice makes perfect for Glasgow guitar maker and his team
22 rubber soul Mike Welch takes inspiration from the early life of Apple founder Steve Jobs
28 hong kong foodie The Edinburgh chef – dubbed The Boss – who’s intent on reaching a High Point
38 ecurie ecosse Lord Elgin on the ‘nearly’ of a Scottish Formula One circuit
BUSINESS QUARTER | WINTER 11
66 by appointment
28 ecurie ecosse
Stephen Paterson finds life at no 87 suits him down to the ground
72 nursing the cuts Entrepreneur Ann Rushforth is happy to go back to school
76 firm structure Sandy Adam believes that new homes should be fit for all, so he builds them
TENTS SCOTLAND EDITION
32 COMMERCIAL PROPERTY
The landmark developments creating our industrial landscape
48 BUSINESS LUNCH Former butcher’s boy Colin Temple ‘steaks’ a claim at the table
52 fashion Tool rather than trend in outerwear
56 equipment Lotus in race to complete five new designs inside nine months
6 ON THE RECORD Doing the positives, asking the questions
10 NEWS Who’s doing what, when, where and why, here in Scotland
20 AS I SEE IT Amanda Vickers doles out some advice
48 silver service
60 motoring The Land Rover Discovery 4 gets the Rabbie’s Tours treatment
64 wine Catherine Feechan wavers between France and Spain on a dull afternoon
80 JOCK YULER Gripping gossip from our backroom boy
66 BUSINESS QUARTER | WINTER 11
ON THE RECORD
>> Graduates required to get in the swim Glasgow pool and spa makers Barr + Wray has been able to use its Olympic springboard to expand into the more lucrative export market in the Middle East and Asia London 2012 is certain to give the UK economy a vital boost. For one Scottish firm, Barr + Wray, based in Hillington Park, it is the opportunity to show off its own gold medal performance in the pool. Barr + Wray has been working on systems for the water polo arena on the Olympic Park in east London, next to the Aquatics Centre. After the games, the venue will be taken down and re-used elsewhere in the UK. Previously, Barr + Wray has built 30 school pools from 2004 to 2009 through the Scotland’s public and private schools rebuilding programme. Alister Macdonald, Barr + Wray’s managing director, explains that the way the Olympic pool filtration systems have been designed and built they can easily be winched onto a truck and delivered anywhere in the UK. “It might suit a university or a college looking for a state-of-the-art filtration and heating system that controls the quality and temperature of the water,” he says. “But because of ongoing cost of maintaining a swimming pool, it will need to be somewhere that is already thinking of building a pool and has set aside the funding.” As BQ Scotland was going to press, Lorne Kennedy, the company’s sales director, took us on a tour of the Hillington premises where six large filtration systems with their large circular sand-filled cleaning vessels for the temporary pools were ready to be dispatched to London. Each system has a pipe and an ultra violet disinfection system which allows less chlorine to be used to disinfect the water. He says: “We’ve assembled all the control systems here in Glasgow – including the electronics – and it has to meet all the technical demands for Olympics Games. “As long as you have swimmers in the pool you need some chemicals to prevent cross contamination. In a large commercial pool it can take two to three hours to turn over the
BUSINESS QUARTER | WINTER 11
water through the filter system, so you always need some chemicals in the pool.” Barr + Wray was founded in 1959 as a supplier of pumps and filtration systems to the processing industry. It built the first filtration and treatment systems for swimming pools in 1967 and is now the UK’s largest filtration and water treatment company for pools. It has five divisions – commercial pools; luxury spas; a processing division for oil, gas and whisky; water solutions for water treatment plants which includes a relationship with Scottish Water, and the after-sales services for pools and sites. “We have been working on pools in three new Renfrewshire developments and we’ve won two of them,” says Alister Macdonald. “We can now do – and it varies on each project – the plant rooms, build the pool itself and then within the tank we can install moveable floors which allows us to change the depth. “We are also looking at new technologies
within swimming pools to reduce water usage. Some is unavoidable because of evaporation and bather ‘pull-out’ but there is new equipment that can reduce water usage.” While Olympic work is the icing on the cake, Barr + Wray – which was bought out by Macdonald and his team in an MBO in 2004 – has moved into the overseas luxury spa market, especially working with some of the world’s leading hotel companies, such as the Mandarin Oriental, Ritz-Carlton, Hilton and Shangri-La. “In 2007 we targeted Dubai, where there were more five-star hotels being built than the whole of Europe,” says Macdonald. “While the hotels were fantastic, the lobbies amazing, bedrooms brilliant, the spa was like a two-star public bath requiring upgrading. “We saw a market for retro-fitting. We’ve been able to capitalise on this project work. It’s a different sell. We recognise this and recruited people with experience of the spa industry. We've only touched the surface.” Closer to home, Barr + Wray has installed the Gleneagles Spa, but the future opportunities are through Dubai to Abu Dhabi, Kuwait, India, and in Hong Kong and the Americas. Alister Macdonald’s business has enjoyed a strong year and hopes to double the size of the business to £40m within five years. But there is an acute skills shortage. “We are always looking to recruit good graduates,” he says. “The problem we have in Scotland is that the oil companies take a lot of the mechanical and electrical engineers out of Strathclyde and Glasgow. “We’ve got four vacancies for the right skills sets – so it shows there are jobs in Scotland. Not only that, but we offer international travel and great project experience working with major companies.” “We’re still recognised around the world as leading water and spa engineers – there’s a lot of goodwill built up with our name.”n
ON THE RECORD
>> Northern stars well worth watching It’s little wonder that the North East of Scotland continues to show the rest of the country how to produce great businesses and continue to prosper – some companies there have been at it since the 12th century The twin pillars of North Sea oil and gas and emerging offshore renewables continues be the major driver for business success in the North East of Scotland. Engineering innovation remains one of the region’s strongest suits, but the recent Aberdeen & Grampian Chamber of Commerce’s Northern Star Business Awards paid tribute to one of the UK’s oldest companies: the Aberdeen Harbour Board, listed in the Guinness Book of Records as the UK’s oldest business. Although the Shore Porters Society in Aberdeen – hauliers working out of the harbour – aren’t far behind, established in 1498. The harbour board has been an integral part of the North East for more than 900 years. Established in the 12th century, the harbour’s contribution today is more than £420m annually for the region’s economy and over the past 40 years it has invested more than £200m in its infrastructure and development with a further £65m planned over the next few years. Harbour chief executive Colin Parker and chairman Chris Lloyd picked up the award at a ceremony in front of 800 guests at the Aberdeen Exhibition & Conference Centre on October 6. The Overall Global Business of the Year Award went to qedi which has achieved remarkable success in the oil and gas industry, trebling its workforce over the last three years and achieving a 35% annual growth rate over the past six years. The Overall Medium Business of the Year was AMC Engineering. The Findon-based company has seen turnover increase from £1.4m to £14m since 2004 and staff numbers rising from 12 to 80. Ellon-based LFH Engineering Ltd picked up the Overall Small Business of the Year Award. Launched in March 2010 following a management buyout, the company has enjoyed a remarkable first 18 months in business.
The first winner of the new Outstanding Contribution to Society Award was Wood Group PSN which provided support to help Glencraft reopen in 2010 and has since led a charitable fundraising campaign which has brought in more than £250,000.
>> BQ Scotland’s Lucky Thirteen to Watch in 2012 1. Hydrasun, established in 1976, is the leading provider of fluid transfer and processing control solution and systems for the oil, gas and petrochemical, marine and defence industries. Headquartered at the Gateway Business Park. Moss Road, Aberdeen, it has operation in the UK, Norway, Kazakhstan, Azerbaijan and Angola. It recently announced an acquisition in Brazil to buy Remaq, a flexible hose assembly company. 2. Downhole Products, founded in 1994 and part of Varel International Energy, suppliers of specialist casing tools. Since 2010, it has enjoyed a 60% increase to turnover of £18m. 3. KCA Deutag Drilling, one of the world’s leading onshore and offshore drilling contractors, with its main office in Altens Industrial Estate, Aberdeen, but with offices in 20 countries and operations in Iraq, Canada, Brazil, Azerbaijan and Russia. 4. ACE Winches, a global leader in the design, manufacture and supply of specialist deck machinery, based in Towie Barclay Works, five miles from Turriff. 5. Active Sustainable Energy Systems, set up by Ian Nicol in 1999, one of the leading experts in sustainable energy systems both commercial and domestic in the north east. The headquarters is the Active Renewable Energy Centre for sustainable buildings in Altens, Aberdeen. 6. Optima, the rig cooling specialist for the oil and gas industry, which protects oil rigs and platforms and operating in 25 countries. Based
in Welling Road, Aberdeen, it has opened a base in Perth, Australia. Winners of the Deloitte International Award for Innovation in People at the SCDI awards in Glasgow in November. 7. FIS Chemicals, by Royal Appointment for the Queen, supplier of water chlorination products, and supplier of cleaning chemicals to the world. Set up by Dr Tom Cummings in 1980 at Bucksburn, Aberdeenshire. 8. LFH Engineering, based in Ellon, Aberdeenshire, the company specialises in design and cooling parts for ship propulsion systems and diesel power units. It has recently diversified into the oil and gas sector. 9. Zenith Oilfield Technology, formed in 2004, it supports downhole equipment with the gathering and analysis of well data. Managed by Greg Davie who was regional winner of E&Y Scottish Entrepreneur of the Year Award in 2010. Recent winner of the innovative use of R&D at the Northern Star Business Awards. 10. AMC Engineering, part of the Houstonbased Forum Energy Technologies, with Scottish bases in Findon and Caithness, employing 85 people in the design and manufacture of torque equipment for the oil and gas industry. 11. Atlas Interactive, based on the Aberdeen Energy Park, are a leading learning and knowledge company with 600 clients in 40 countries, training 350,000 a year in health and safety in the oil and gas industry. 12. AXIS Well Technology, a leading well and petroleum consultancy, founded in 2001, based on the Aberdeen Science & Technology Park, Bridge of Don. Nominated as Northern Star finalist two years in a row. 13. Titan Torque Services, established in 2008 as specialist oilfield equipment company, manufacturing equipment that increased the safety in the drilling environment. Based in East Tullos Industrial Estate in Aberdeen. n
BUSINESS QUARTER |WINTER 11
ON THE RECORD
>> Questions to answer before X marks the spot We’re committed to a referendum on independence, but there are questions – some with multiple answers – to be dealt with before we head for the voting station. Has a currency been thought about, for example – sterling or euro? Now is the time to query the targets Scotland’s SNP Government is now being challenged by senior business leaders to answer some deep-seated questions about a referendum on independence. First minister Alex Salmond is committed to holding such a referendum during the second half of the current Scottish Parliament, which ends on May 5 2016. Iain McMillan, the director of CBI Scotland, said in a speech to the Institution of Civil Engineers in Glasgow – in front of 700 engineers – that it is legitimate for business to ask questions as the referendum approaches. And Mark Tennant, chairman of Scottish Financial Enterprise, and a senior adviser for JP Morgan Securities, raised the same matter at the Scottish Financial Service Awards on December 1 in the Edinburgh International Conference Centre, in front of another 700 senior business people from the banks, insurance and finance sector. Ian McMillan asked: what will the currency be in an independent Scotland? “The SNP leadership says that an independent Scotland would keep the pound sterling until such time as the euro may be adopted. But that begs the question; would the rest of the United Kingdom permit an independent Scotland to use its currency? It might not. And, if it did, there are likely to be strict conditions attached. So, has the SNP fully explored the currency issues?” He then asked about inflation targets, the question of an independent Scotland joining the European Union, and the costs of full statehood. An independent nation will need more civil servants – a treasury, a central bank, an army and border controls. Who would pay for all this? He said the UK Government Expenditure and Revenue in Scotland data shows that Scotland had a deficit of £14bn in 2009-10, which
BUSINESS QUARTER | WINTER 11
represents 10.6% of Scottish GDP. He poses the questions what would be the level of government spending and borrowing after secession and how would it be funded? Mark Tennant raised similar issues saying that uncertainty is not good for Scotland’s financial services industry which still employs more than 10% of the working population. He said that fund management, life and pension companies, and general insurance have all been able to weather the storm in Scotland. And that Scotland – and not just Edinburgh and Glasgow – is now the European centre for financial custody services, with a pool of
following a year in which the Scottish economy has grown by only 0.6%. Dougie Adams, senior economic adviser to the Ernst & Young Scottish ITEM Club, says: “The economic losses are eye-watering. The cumulative loss in GVA (gross value added) to Scotland since the beginning of the financial crisis amounts to around £40bn. That equates to a £17,000 loss per every household in the country. “The deterioration in the international environment coupled with continued pressures on household budgets has further dented our expectations for growth in 2012. Any rapid recovery that makes good on losses
An independent nation will need more civil servants – a treasury, a central bank, an army and border controls. Who would pay for all this? talent, but that there needs to be a clear indication of what will happen should Scots vote for an independent nation. He stated that he was asking the questions in a purely apolitical manner and as the leader of an industry that has proven its resilience to Scotland, despite the failures of the Royal Bank of Scotland and Bank of Scotland. Meantime, a recurring issue that needs addressing is Scotland’s growing unemployment. The Ernst & Young ITEM Club has said the country will not return to peak employment until early 2020, and predicts a modest decline in total employment in 2012. Scottish ITEM has downgraded its forecast for Scottish growth in 2012 from 1.9% to 1.1%
in relatively short order looks to be a pipe-dream.” Scottish ITEM attributes more sluggish growth in the recovery to the weak performance of transport and communication, business services and Scotland’s public sector. Manufacturing is shown to have grown by 4.8% in the two years to mid-2011, but this compares with an increase of 6.6% in the rest of the UK. So, against this backdrop, Alex Salmond and John Swinney, the finance secretary, must ensure they have fully answered the questions posed by business and have placed Scotland on a firmer footing before they take us to the polling booths. n
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LIFE IS A COLLECTION OF EXPERIENCES LET US BE YOUR GUIDE
Latest award shows Howie does it,Cupid hits number one spot, salmon continues to leap, Edinburgh bid takes shape, Britannia rules again, Rock moves to Virgin, and I-design sells sofware to Canada >> Retail rates case cheer
>> BT boost for jobs BT is boosting its engineering workforce in Scotland with 38 recruits as it accelerates its roll-out of super-fast broadband. The new engineers will be based in Fife, Tayside, Glasgow and Ayr and many of them will be ex-armed forces personnel. They are joining BT to help the company deliver fibre-based broadband to two-thirds of UK homes and businesses by the end of 2014, a year ahead of the original target of 2015. All the new engineers are due to be in place by the end of January. Brendan Dick, BT Scotland director, said the acceleration of the £2.5bn programme would help stimulate the economy, drive growth and benefit local communities.
>> Overheads on the rise Four out of five Scottish small businesses have seen the cost of overheads increase over the last year, according to the Federation of Small Businesses. The business lobby group is arguing for additional safeguards for small businesses when they deal with energy companies – making the case for greater scrutiny of the big six energy companies’ behaviour toward small businesses, a focus on a much clearer pricing structure for businesses to compare suppliers, and the removal of the barriers that block competition that allows the big six companies to control the market. The FSB is also calling on the Scottish Government to move on its plan to set up a one-stop-shop for small business energy and
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waste advice and reiterating its concerns about UK government proposals to cut solar feed in tariffs from 43.3p per kilowatt hour to 21p per kilowatt hour.
The Federation of Small Businesses is arguing for safeguards and a removal of the barriers that block competition
The Fife Valuation Appeal Committee has issued a decision in an appeal case raised by retailers in the Mercat Shopping Centre in Kirkcaldy, challenging the significant increase in rateable values effective from April 1 2010. The decision of this case, co-ordinated by Colliers International and GL Hearn on behalf of various occupiers and BNP Paribas Real Estate, acting on behalf of the landlords, is the first step in ensuring depressed rents should be reflected in the rateable value. The Fife assessor attempted to argue that he could not reflect depressed rental values that occurred in 2009, due to the wording of rating legislation. Brian Rogan, senior surveyor at Colliers International in Scotland, said: “Common sense has prevailed. This is a test case, which is also the first step towards establishing that rateable values across Scotland correctly reflect the current economic conditions. The decision will help both landlords and tenants in making premises more affordable and, potentially, stimulating economic activity.” The Fife Assessor has a period of time to lodge an appeal to The Lands Valuation Appeal Court.
>> Howie does it again Scottish family butcher Simon Howie’s Auchterarder shop has won the Fresh Produce Retailer of the Year category at the Scottish Independent Retail Awards 2011. Jim McLaren, chairman of Quality Meat Scotland, the public body responsible for Scottish red meat sector, said: “This award is well deserved and provides further evidence that, through the provision of excellent quality service and produce, independent butchers can compete with multiple retailers by providing a top-class, personal offering.
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Official fuel economy figures for the MINI Countryman range: Urban 27.4-60.1mpg (10.3-4.7 l/100km). Extra Urban 45.6-67.3mpg (6.2-4.2 l/100km). Combined 36.7-64.2mpg (7.7-4.4 l/100km). CO2 emissions 180-115g/km.
>> Brightwork if you can get it
>> Virgin takes over Northern Rock Virgin Money – which has a strong presence in Edinburgh – has agreed to buy Northern Rock from the UK Government, subject to regulatory and European Union merger approval. The transaction is expected to be completed on January 1 2012. The enlarged group will have four million customers, will be strongly capitalised and will be highly liquid, with a minimum Tier One capital ratios of 15%, says Virgin. Sir David Clementi will be chairman of the combined business and Jayne-Anne Gadhia will be its chief executive officer. The combined business will operate under the Virgin Money brand. The acquisition included 75 Northern Rock branches, one million customers, a mortgage book of £14bn and £16bn of retail deposits. The deal was funded by Virgin Group and WL Ross, led by American investor Wilbur Ross. The Government will receive £747m in cash on closing of the sale, plus an expected circa £50m of cash within six months of completion. A further £150m will be paid in the form of a capital instrument and an additional cash consideration of £50-80m will be paid upon a future profitable IPO or sale in the next five years. This means the taxpayer has the potential to receive more than £1bn in total. Jayne-Anne Gadhia said: “We plan to create a major new competitor in UK retail banking as we bring together Northern Rock and Virgin Money at the beginning of 2012. The two businesses complement each other well and together they will create a strong bank with more than four million customers. It is the outstanding fit between the two businesses that will allow us to create a strong, stable, growing and profitable business for the future. We are aiming to build a true banking alternative for the UK consumer, one centred around our ambition to make everyone better off.”
>> Weir buys Seaboard for £431m Glasgow-based Weir Group has agreed to buy Seaboard, an independent wellhead solutions provider focused on the growing North American oil and gas drilling and production markets for £431m. The acquisition is expected to immediately help earnings accretive and post tax returns which is expected to exceed Weir’s cost of capital by 2014. Seaboard, based in Houston, Texas, manufactures wellhead and pressure control equipment to the oil and natural gas exploration and production industries. Seaboard also provides a range of associated field and support services, including equipment rental into the onshore oil and gas drilling, completion and production markets. A shift in North America towards unconventional oil and gas development and the rapid growth of high pressure hydraulic fracturing has increased demand for Seaboard’s products and services. Seaboard’s equipment will complement Weir’s market leading portfolio of frac
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pumps. Completion is conditional on US regulatory clearance, and expected to take place in December. Chief executive Keith Cochrane said: “Seaboard is a well-managed business with a strong position in a market that we understand well. The acquisition is perfectly in line with strategy. It broadens our product offering and fits into our business model of growing the installed base of original equipment from which we drive aftermarket opportunities.” He said there is potential to strengthen the business further through lean engineering and operational processes and extensive sales and service networks.
The acquistion broadens our product offering and fits into our business model
Scottish recruitment specialist the Brightwork Group has marked its fifth year in business with record turnover and profits and a new boost in job numbers. The group, based in Glasgow and Edinburgh with offices in Aberdeen, posted a record £24m in sales after tax profits up to £750,000. It has increased its staffing from 13 in 2006 to 38 now, with another six likely to be taken on to handle increased volumes from a deal with an online retailer. Managing director Anthony Knight and group chief operating officer Charles Turner, who created the company out of an MBO from Hudson Group, have transformed the industrial division of Hudson into a full-service, cross-sector agency which now supplies up to 1,500 workers a week to blue-chips and SMEs. The company is chaired by Brian Williamson with backing from Clydesdale Bank.
>> Gold mine gets go-ahead Plans by Australian public company Scotgold to develop Scotland’s first commercial gold and silver mine at Cononish near Tyndrum have received unanimous planning approval from the Board of the Loch Lomond and the Trossachs National Park Authority at Crianlarich.
Alastair MacColl Chief Executive, Business & Enterprise Group
When you exist to create success stories, it helps if you’re a success story.
Since 2007, the Business & Enterprise Group has supported over 75,000 businesses, helped create over 22,000 jobs and been behind the launch of over 17,000 new start-ups. All this we have done by sourcing vital investment, by providing expert professional advice, by hosting major events and workshops, by facilitating international trade, and by stimulating supply chain development and procurement. It’s a track record of which we are rightly proud, and a pedigree that makes us justifiably confident for the future. They say that success breeds success – the Business & Enterprise Group proves the point. If you’d like to find out more, contact us. E: firstname.lastname@example.org T: 0191 426 6408 www.business-enterprise.net Follow us on Twitter @B_EGroup
do throughout the year to ensure that our visitors to Britannia have a consistently good experience and go home to recommend us to their family and friends.” Meanwhile, Glasgow’s latest luxury hotel, Grasshoppers Glasgow, has become one of the city’s best rated. The new penthouse hotel, with the accent on service, comfort and value, with rooms available from £85 per night, has made Grasshoppers a leading Glasgow favourite on TripAdvisor.
This is a tribute to the fantastic job our staff do throughout the year >> Team Glasgow for business
>> Royal Yacht is top sea dog The Royal Yacht Britannia has broken its own record for the highest quality assurance score ever awarded to a visitor attraction by Scotland’s national tourist board, VisitScotland. The five-star attraction achieved 95.85% when it was assessed by VisitScotland’s quality advisers – almost 11% higher than the minimum score required to achieve the coveted five-star award. This is the tenth year in succession that Britannia has retained its five-star status. Britannia has attracted more than 275,000 visitors this year, an increase of 12% on the previous year. Britannia’s chief executive, Bob Downie, said: “This great news is a real tribute to the fantastic job all of our staff
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A team of seasoned business figures are to steer Glasgow’s economic development over the next decade. The Glasgow Economic Leadership Board, established by Councillor Gordon Matheson, leader of Glasgow City Council, is in response to an independent report which set out a range of measures aimed at helping the city harness its strengths, renew its economy and identify new trade and investment opportunities. The board will be chaired by Professor Jim McDonald, principal of the University of Strathclyde, and members include Benny Higgins, chief executive of Tesco Bank; Keith Cochrane, chief executive, The Weir Group PLC; Jim McColl, chairman and CEO of Clyde Blowers Capital; and Stuart Patrick, chief executive of Glasgow Chamber of Commerce. The board will oversee the implementation of a strategy aimed at supporting the city’s economy over the next 10 years. This will be based on the findings of the Glasgow Economic Commission, which issued a report earlier this year after a consultation with city businesses.
>> Meso are design tops One of Scotland’s youngest product design and development companies has won an award for innovation and technology. Meso Design, based in Inchinnan, Renfrewshire, beat off stiff competition from Rolls-Royce and app designer myAppHub to win the Rocco, Renfrewshire Chamber of Commerce Award for Innovation and Technology, sponsored by Paisley-based Reid Kerr College. The company was formed in 2008 by graduates Danny Kane, Gregor Aikman and Craig Lynn and now employs 12 staff at Inchinnan.
>> Souter eyes up Edinburgh Stagecoach boss Brian Souter has been tipped as an interested party, leading a consortium of investors keen on buying Edinburgh Airport for an estimated £600m. The airport, Scotland’s largest with approximately 9.2 million passengers passing through it every year and with more than 100,000 flights, is likely to be sold by the summer. BAA expects formal approaches in the New Year. In 2011 Edinburgh was named Best European Airport (in the five to 10 million passengers category) by ACI Europe and consolidated its position as the fifth-largest airport in the UK. BAA chief executive, Colin Matthews, said: “Edinburgh is a great airport with a great team and a great future and we will be very sorry to see it leave BAA. We remain committed to Scotland and we will continue our long-term investment to improve passenger and airline experience at Aberdeen and Glasgow, as well as at Edinburgh until the sale is complete.
Edinburgh is a great airport with a great team and a great future
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As Scotland’s number one business school, we understand the importance of global thinking. Educational pioneers since 1966, we’ve expanded our campus across 9 of the most influential cities in Europe and Asia and have established a branch campus in India. From our bespoke Executive Education programmes to our portfolio of innovative master degrees, from our high calibre graduates to our research excellence, it’s no surprise that Strathclyde Business School is in the top 1% of business schools in the world. Strathclyde Business School. Internationally focused. Internationally accredited. Internationally ranked. How better to broaden your business horizons? Find out more at www.strath.ac.uk/business
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>> BQ People on the move Private bank Brown Shipley has increased its presence in Edinburgh with the acquisition of the investment management operations of Scottish law firm Gillespie Macandrew. Charles Fotheringham joined Brown Shipley – set up in the capital in 2008 – as the private client director, joining Robert Hunter, Colin Robertson and Keith Barron. Brown Shipley has £250m of funds managed from Edinburgh.
Andrew Staal, who built up the European business of currymakers Patak’s, is the new managing director of Simon Howie, based in Perthshire. Staal previously worked for 15 years for Associated British Foods, owners of Patak’s since 2007. Independent business advisers Acumen accountants and advisers has appointed a new associate in the Edinburgh office. Elena Barns will be responsible for running the Edinburgh office as well as continuing to provide tax advice to her client base. She was with Professional Tax Management which became part of Acumen in 2007.
Grant Thornton has strengthened its private client team with the appointment of Anna McBride as senior tax manager. With 10 years’ industry experience, McBride has worked with two of the big four accountancy firms, as well as a two-year spell at Grant Thornton’s London office. She will be working alongside tax director, Paula Fraser, in Glasgow. RSM Tenon has appointed Brian Hay-Smith as outsourcing director in Scotland to enhance the company’s growth. He worked for 11 years at Chivas Brothers in a number of roles with the most recent being financial controller, a position he held for six years. He will be working alongside outsourcing director Keith Marshall and will be based between RSM Tenon’s offices in Edinburgh, Glasgow, Grangemouth and Perth. AWD Chase de Vere, financial advisers, have appointed Jon Dixon as corporate advice manager for the North. This is a new position and he will be responsible for AWD Chase de Vere’s corporate advice in its Manchester, Preston, Leeds, Newcastle, Glasgow and Dundee offices. He has over 25 years employee benefit consulting experience, having previously been responsible for the commercial leadership of Aon Benefit Solutions in Northern England and Scotland. Scotland’s former enterprise, energy and tourism minister Jim Mather has been appointment chairman of Gael Ltd, the developer of quality, safety and risk management software for the aviation, oil and gas and healthcare sectors. He will assist Gael’s sister company MindGenius which provided Mindmapping – something he was famed for when in government.
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>> Farmed salmon still leaping
The Scottish Salmon Company which produces more than 20,000 tonnes of farmed salmon per year – more than 20% of the total Scottish production – has announced third quarter revenues of £17.8m, bringing year-to-date turnover of £74m. Profits have been hit by a drop in the global prices of salmon. Profits were £700,000 for the quarter, when 2010’s total profits were £4.8m. The company is engaged in all aspect of Scottish salmon production, from smolt production to harvesting, processing and sales, in Scotland. It owns 40 sites on the Hebrides and West Coast of Scotland that include two processing plants.
>> I-design win Canada contract I-design has secured its first software contract in Canada. The company, which provides ATM advertising for the banking sector, has sold its Joono marketing programme to an unnamed major bank. The software will be distributed across all of the bank’s cash machines. The agreement was clinched through I-design’s channel partner IBM Canada in a competitive tender. Ana Stewart, chief executive officer of Dundee based I-design, said: “This contract expands our presence in North America significantly, taking I-design’s software into Canada for the first time.”
>> Increase fund ceiling Innovative developing business can now apply to the Scottish Investment Bank for the Scottish Seed Fund up to £250,000, giving a total public and private sector combined potential deal size of £500,000. The Scottish Seed Fund was established by Scottish Enterprise in 2006 to improve the availability of finance for start-up and young growing companies in Scotland. It invests between £20,000 and £250,000 alongside matched private sector investment, on an equity basis, in early stage businesses demonstrating high-growth potential in terms of launching new products, entering new markets and increasing employment. Since inception, the fund has invested £8.4m in Scotland’s seed stage companies and levered an additional £15.6m from private investors equating to a total of £24 m of investment.
>> Alpha performance for Omega Omega Diagnostics, the AIM-listed medical diagnostics company based in Alva, Clackmannanshire, has announced revenues up 67% to £5.53m from £3.30m for the six months ending September 30 2011. Gross profits are up 85% from £3.52m from £1.9m. The company is making good progress with its IDS-iSYS development programme and a 10-year agreement with Toyota Tsusho America for the distribution of its Food Detective product in the US market. Chairman David Evans says the underlying trading for the business is resilient with sales continuing the upward trend.
>> Business must get greener, says CBI Scotland’s businesses must work harder to improve their environmental performance, says Iain McMillan, director of CBI Scotland. Speaking at the annual Vision in Business for the Environment of Scotland awards, he said.
>> Four Scots in Fast-Track Four Scottish companies were named in Deloitte Technology Fast 50 ranking with media and entertainment firm Cupid plc named the top Scottish company – placed at number 19 in the UK with a growth of 1317%. The other three Scots companies making the list this year were internet firm Skyscanner Ltd, at 27; software company DEM Solutions, at 35, and semiconductor, components and electronics firm Reactec Ltd which entered the list at 48. This year’s overall UK winner is Fixnetix with a growth of 24557% over the last five years. Mike McGregor, partner leading the Deloitte Technology Fast 50 in Scotland, said: “The 2011 Deloitte Fast 50 shows that tremendous growth rates are still possible, with internet and software sectors showing particular strength and making up over half (56%) of the companies in the Fast 50 ranking. The Technology Fast 50 awards ranking highlights the importance of finding a niche product or service to beat the recession, he said. Bill Dobbie, chief executive office of Cupid, a leader in online dating, said: “It is a fantastic accolade to be the top Scottish company in this year’s Deloitte Fast 50. We’re extremely proud of the progress we have made in the last year.” The results come as Deloitte’s Entrepreneurial Business Survey revealed a marked increase in the number of owners intending to sell their business, the results also revealed more than 42% have no exit strategy in place. Head of entrepreneurial business at Deloitte, Jim Boyle, said: “The number of entrepreneurs hoping to exit their business in the next five years has more than doubled in the last 12 months. This marked increase indicates a significant boost in optimism among business owners looking to maximise the value from the sale of their business.”
It is a fantastic accolade to be the top Scottish company in this year’s Deloitte Fast 50. We’re extremely proud
“I travel around Scotland meeting people from all kinds of businesses. I believe that we are genuinely blessed with many innovative and successful companies, both domestic and international, many of whom are world-class leaders in their field.” He said the VIBES winners demonstrated that despite the continued economic downturn, there are business opportunities and increased profitability to be gained through environmental innovation. “But we need to get better and encourage even more businesses to understand that environmental improvements make good business sense,” he said in Glasgow. “Scottish companies need to ingrain good
environmental practice into the very fabric of their operations. That’s good for the businesses themselves and good for Scotland.”
We are genuinely blessed with many innovative and successful companies, worldclass leaders BUSINESS QUARTER |WINTER 11
Securing new business in a competitive environment By Ian Collins, area director for Bank of Scotland in South Scotland When public and private organisations cut their spending and contracts are lost, making new contacts and opening up new business opportunities is vital. And with an estimated 144,600 VAT registered enterprises in Scotland, growing your business network is more important than ever. At Bank of Scotland, we understand that when you’re busy with the day-to-day running of your business, you need a time effective way to expand your local business connections. That’s why we have run free events to allow SME owners to do just that, providing the ideal opportunity to network with other local businesses. As part of Lloyds Banking Group, Bank of Scotland approved eight out of ten requests for business loans and overdrafts* and our locally based relationship managers are on hand to offer a range of support and guidance on finance options. We are happy to work closely with you to explore the types of funding that are right for your business needs. With around 25 per cent of Scotland’s workforce being employed in the public sector, we know that the economy could be seen as being particularly vulnerable. Securing funding is now more important than ever as increases in raw material costs and decreases in public spending put pressure on your cashflow. The increased focus this demands on the day to day running of your company only adds further pressures on trying to maintain your current turnover or expand in this competitive environment. To ease this pressure, we offer invoice finance solutions through Lloyds TSB Commercial Finance to release the value of your invoices when they are issued to customers rather than when they are paid. We also offer this service on a six month trial basis, so if the service isn’t right for you we’ll provide a full refund of the service fees paid. As many firms in Scotland operate in tourism and manufacturing, having access to the right types of funding is especially important to accommodate key seasonal peaks and troughs. Our local relationship managers can introduce you to how various types of finance can help you release cash and take advantage of growth opportunities, or to keep your current business plans on track.
Ian Collins speaks at a Bank of Scotland Charter event in Falkirk earlier in the year.
To find out how we can help you plan to maximise growth opportunities to secure new business contracts, please contact me on 07764 287 926 or firstname.lastname@example.org
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We’re here to help Scottish business grow.
At Bank of Scotland we’re here for Scottish business, supporting opportunities for growth and encouraging enterprise. We are committed to developing long-term relationships with our customers to offer them the support and guidance needed to take their business forward. From growing your business in a recovering economy and beyond, you can be sure that we’ll be with you all the way. For more information visit bankofscotland.co.uk/business or your nearest branch.
As part of Lloyds Banking Group, Bank of Scotland is a Proud Partner for Scotland of the London 2012 Olympic Games and Paralympic Games. Bank of Scotland plc. Registered in Scotland no. SC327000. Registered office: The Mound, Edinburgh EH1 1YZ.
*March 2010 – February 2011
“As many firms in Scotland operate in tourism and manufacturing, having access to the right types of funding is especially important to accommodate key seasonal peaks and troughs.” Ian Collins
All lending is subject to a satisfactory credit assessment. Factoring, Invoice Discounting, Hire Purchase and Leasing facilities are provided by Lloyds TSB Commercial Finance Scotland. When using these products and services your agreement will be with a Lloyds Banking Group Company whose terms and conditions will apply. LloydsTSB Commercial Finance Scotland is a trading name of LloydsTSB Commercial Finance (Scotland) Ltd. LloydsTSB Commercial Finance (Scotland) Ltd. Registered Office: 110 St Vincent St, Glasgow, G2 5ER. Registered in Scotland No 93252 The Lloyds Banking Group includes Bank of Scotland plc and a number of other companies using brands including Lloyds TSB, Halifax and Bank of Scotland, and their associated companies. Bank of Scotland plc Registered office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. SC327000. Authorised and regulated by the Financial Services Authority. We subscribe to The Lending Code; copies of the Code can be obtained from www.lendingstandardsboard.org.uk
AS I SEE IT
How to make an impact in 2012 The forthcoming year looks likely to be as tough as the last one. So how can you make the most of your business opportunities? Amanda Vickers offers some sage advice on staying positive in the next 12 months Do you ever start the year full of best intentions and not end up delivering on them? Maybe you have a list of resolutions and try your best but all that effort doesn’t quite pay off. Have you ever missed out on a job or promotion because you didn’t make a positive impression? Would you like to be able to assert yourself more confidently? Do people remember your colleagues but forget you? If
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that’s true of you, you’re not alone. You need to raise your profile and influence people. You need to make an impact. These five secrets of success are guaranteed to get your New Year off to a great start. 1. Develop inner confidence. How you feel on the inside makes a huge difference to how you come across on the outside. That feeling
shines through to the surface. Some people feel, look and sound confident and selfassured. How do they do that? Confident people often feel fearful when they do things for the first time. They do things anyway – despite their fears, they don’t take criticism personally and they don’t expect to do things perfectly – they allow themselves a quota of mistakes.
2. Build the reputation you want. Your reputation is what other people say and think about you – it’s your personal brand. Too many people leave this to chance. When they interact with others they have no real idea how they want to be perceived. As a result they end up sending mixed or confused messages. How do you create the brand you want? Take a sheet of paper and note down how you think others describe you – this is your current brand. Then write a list of things you want them to say about you. Compare the two lists. What’s the gap between where you are and where you want to be? All you have to do then is live your brand. 3. Make a positive first impression. You’ve probably got no more than seven seconds to make a positive impression. When anyone meets you they size you up, they evaluate you, they judge you – and within seconds they’ve pretty much made their mind up about you. If you’re going to meet an important new client the impact you make in those first vital
seconds determines success or failure. The solution lies in harnessing the halo effect – when people meet people they take a limited amount of information and add to it without any additional evidence. To make the most of this simply dress well, have an upright posture and demonstrate the positive qualities most people like such as kindness, intelligence and a sense of humour. 4. Connect with people. Imagine what it could be worth to you, personally and professionally, if you could connect quickly and easily with people you meet most of the time. The essence of connecting – sometimes called rapport – is believing the other person is like you, and you believing the same about them. All you have to do is listen actively to them, be interested in them, match their body language and voice – people naturally mirror body language and vary their voice to match others when they like them. 5. Raise your profile. Many people work hard and quietly get on with their job and
AS I SEE IT
wonder why they don’t get promoted. It’s all too easy to be invisible. It may not be fair that while you have your nose to grindstone others seem to get the best jobs. The reason this happens is that we don’t let people know about what we’ve achieved – perhaps because of a fear of bragging or boasting. There’s a middle ground which is visible and gets you noticed in a good way. When people ask you what you’ve been up to instead of saying “Nothing much” give them a good news update. This is a 30-second update on something you’re proud of. Apply even two or three of these tips and you will boost your impact. Go for all of them and get off to a flying start in 2012. n Impact, by Amanda Vickers, Steve Bavister and Jackie Smith, is available in January, £10.99 from Pearson Prentice Hall. Amanda Vickers is director of Speak First and is a management training and development coach.
You’ve probably got no more than seven seconds to make a positive impression. When anyone meets you, they size you up, they evaluate you, they judge you
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in association with
Blackcircles.com entrepreneur Mike Welch has worked hard for ten years building a successful, online tyre company. Now the arrival of Tesco’s former boss Terry Leahy as an investor and Welch’s search to understand his own motivation have given him a refreshing outlook on business. Kenny Kemp talks to him
The biography of Steve Jobs by Walter Isaacson is the must-read business book for 2011 – and will surely be in the Christmas stocking of a few Scottish business folks. So, when tyre entrepreneur Mike Welch opened up his hardback copy to learn more about the Apple genius, he discovered something deeply personal in the opening chapter: Jobs was adopted. This was a revelation to Welch, the dynamic and approachable thirtysomething boss of Blackcircles.com, born and raised in Liverpool, and who has made something of an informal study of what makes successful business
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figures tick. Jobs’ story touched on an issue that Welch has spent a few years seeking to resolve about his own upbringing. “It was amazing when I opened the cover of the book and saw that the title of the first section was ‘Adoption’,” he says. “It was nice to see someone, whom I respected – but who was not necessarily a likeable figure – in my field of business, had similar sentiments to me.” Ten years ago, Mike Welch emerged as one of the most exciting entrepreneurs in Scotland with his idea of taking on the tyre and exhaust giants with Blackcircles.com, his internet-based
ordering and delivery company based in Peebles in the Borders. The idea helped empower hundreds of independent garage operators across the UK using the Blackcircles. com sales engine. While some might have predicted that Welch was being “over-hyped” and lauded as “too-much-too young”, he has fastidiously stuck to his business idea. Today Blackcircles.com is emerging as a major UK brand offering low-cost, no-frills tyres to an increasing number of converts. Welch’s own dogged determination and focus has paid off and he has attracted personal investment from no less than Sir Terry Leahy, >>
If you look at the marketplace there had been no real innovation for many years until Blackcircles came along and we are starting to grab market share
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the former head of Tesco, who is viewed as the most significant business figure of the 1990s and 2000s. While the investment is an important feather in Welch’s cap, what is worth even more is the direct access to Leahy’s retailing brain and his network of high-level contacts. The fact that they both are Scousers and have a soft spot for Liverpool and Kenny Dalglish, also creates a bond. Mike Welch has been consistent in building Blackcircles.com, taking on people with the requisite commercial nous and allowing the firm to mature organically. But as Welch’s own sense of self-awareness has grown the revelations from Jobs’ biography re-enforced thoughts about what makes him tick – and drives him forward as a business man. “Over the last 10 years I have been trying to understand what my motivation is for becoming a business person,” he says, with some seriousness. “Why is it that I gave up everything else in my life to set up and then run a business?” Welch discovered that a key motivation has been his upbringing and background – as someone who was adopted. “The fact that I was adopted very early on was always a bit of stigma for me,” he says. “But I never acknowledged it properly. I felt a lot of guilt. And because I didn’t acknowledge it, I didn’t appreciate it. I remember early days when I was a kid and my younger brother, who was also adopted and never had a problem or an issue with it, was talking about it on a bus to school. When this all emerged, I felt devastated. It was a big issue for me at the time. “When I was a kid I didn’t want to be different. I didn’t understand. I was always over-analysing things even as a young boy. I rebelled against it a bit. It was a problem for me and I didn’t want to acknowledge it because I thought it devalued in some ways my parents and family, whom I loved so much. “A big driver for me is that I wanted to prove that I was worthy. It’s bizarre looking back that such a complex set of thoughts and concepts can come out of a young person’s brain.” Mike Welch, still only 33, was born in post-Beatles Liverpool. But the power of the Fab Four’s music was a soundtrack for his early life. He was adopted by Arthur and Brenda
Welch; lived in the city’s red-brick Aigburth district and moved across the Mersey to Prenton on the Wirral, south of Birkenhead and near Tranmere. He says: “I value my relationship with my parents so much. I love them dearly. The great thing about my folks was that when I was seven they told me about my adoption. And they have been hugely supportive of the agency. My mum and dad are educated and well-rounded people, absolutely brilliant people in that they appreciate the adoption system in the UK. Myself and my brother David, there is not so much debt due – but a debt of gratitude. They are proud that I’ve decide to help as an adoption ambassador, as opposed to going into another commercial venture. “I’ve always been comfortable with who I am and what I do – but I’m a lot more complete as an adult and a business person dealing with my feelings about being an adopted kid. There’s no gap in my life but I’ve been fortunate in having double the amount of support and affection from my folks.” This spurred Welch to look into the good work that is done by the adoption agencies and he found he could offer help. “I started to see there was a big gap in the funding and commercial skills, yet the job they do is so crucial. I got in touch with the agency that placed me called Adoption Matters in Liverpool and I started doing some voluntary fund-raising work for them. “My ‘real’ mum and dad are the folks who are my mum and dad today. I think Steve Jobs says that in the first chapter of his book.” Recently he was asked to join the British Association for Adoption and Fostering Association on its board and as a business envoy. “I will be at the coalface, helping the association push through change and make sure that kids have future generations of people who will adopt,” he says, sitting in his Edinburgh flat. “The landscape has changed so much. Thirty years ago it was three- to six-month-old Caucasian kids with Middle England Caucasian parents looking to adopt them and there was no end of matches, so there was no problem. Now the average child is adopted at three years old, and you are
When I was a kid I didn’t want to be different. I didn’t understand. I was always overanalysing things even as a young boy. I rebelled against it a bit looking at a multi-ethnic Britain, which is more challenging, because there are kids from various background involved with alcohol, drugs and physical abuse. The formative years for a child are one to three and you have a lot of work to do to rehabilitate those children. The travesty of all this is that the funding mechanism for adoption hasn’t changed since my day. So when it was easier to place kids – and more straight-forward – it was the same
formula of commercial financing as it is today. However, there is ten times more effort going into finding the right people and helping the kids today.” He says working with the adoption agency has opened his eyes. “They are really charitable people. Really beautiful people – selfless, brilliant individuals, but because they are so selfless and charitable, they are not potentially as commercially wise and as experienced as they need to be in this climate. It is a battle to get funding. Charities are fighting week-in, week-out. It’s the big guys such as the Barnados and the Red Cross who have the huge funds to stick an advert on the television. “My board and my shareholders are all very supportive of what I have been doing on this.” In 1994, aged 16, Welch began as a tyre-fitter in Liverpool. He quickly understood the margin on each tyre and, in 1996, launched his own mail-order tyre business with a £500 grant from The Prince’s Trust. He was headhunted to become Kwik-Fit’s head of e-commerce, but stayed only a short time before setting up Blackcircles.com in 2001. “I’ve spent the last ten years of Blackcircles – and the three or four years before that – running the tyre business on my own,” he explains. “Now I have a team with great experience and diversity.” He says that even a couple of days a month out of the daily grind to look at the world from a different perspective is healthy. “I’m passionate about this. I’ve been offered four or five non executive directorships with big companies and corporations, but it’s not something I want to do at this stage. My investment in commercial business is one business; it is Blackcircles. This is my investment and it’s my life. I’ve worked so hard for it, so I don’t want to go giving the value to somebody else.” But working for the British Association for Adoption and Fostering gives him an outlet that is close to his heart. “Hopefully, I can bring different skills to the people,” he says. So how is business today – and what does the future hold? 2011 has been a big year for Blackcircles. “It’s a longer-term play, still. I said that way >>
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We’ll make money again this year. Our sales line is now north of £20m and I’ve got no reason to believe we couldn’t be a £100m business in the next five years
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back and we are trying to build a brand. One thing about Terry Leahy is that it’s not just about having a ‘cool guy’ in the shareholder group, it’s having the best retail guy you can possibly have involved in our business.” Shortly after setting up his business, Welch drew up a ‘fantasy list’ of people he would like to help him grow the business and Sir Terry Leahy’s name was on the top. He was European Businessman of the Year in the Fortune magazine and, in 2006, Mike wrote to Leahy saying he was someone who might help him learn more about business. “I met Terry and we got on well and from that point onwards he made himself accessible to me as a mentor. “If you look at our marketplace there had been no real innovation for many years until Blackcircles came along and we are starting to get ‘traction’ and to grab market share. Customers are sticking with us and we’re looking after them. We will make money again this year. Our sales line is now north of £20m and I’ve got no reason to believe that we couldn’t be a £100m sales business within the next five years.” At the start of 2011, Blackcircles brought in Charlie Dixon as director of franchise and network development. “Charlie had a blank canvas and we were working tighter on a concept to franchise key garages,” says Welch. “At the moment they
are doing a contract job for us – we already have 1,300 garage partners – but we thought, let’s bring them in as part of the business and bring them some value and generate us some income. That has been a resounding success.” MIke Welch says Charlie Dixon has been able to convert the “best of the best” into branded Blackcircles.com outlets, which generated better income. “We started with a preferred list of 1,000 independent garages that had no branding other than the name of the mechanic or owner above the door. This year there will be 250 that are fully branded with the local names above the door – and next to that will be a large sign saying ‘Powered by Blackcircles’ and generating an income. In 2012, we want to double this to 500 across the UK. We do things for them that they can’t do for themselves.” This means that within three years Black Circles will have a bigger branded network of garages and stores than Kwik-Fit. “I think it’s an outstanding feat,” says Welch. “It’s gone beyond any of our expectations this year and shows that in 10 years of awareness in the market we have built up a great deal of goodwill with the garage network. We are going to keep driving this as hard as we can.” Welch says it is like the Interflora model of florists who all operate under the same umbrella brand – and the recent move by
Blackcircles.com to spend serious money on a concerted advertising campaign on television in 2012 to raise awareness will give the business a massive footprint. Blackcircles has more than 600,000 customers who are returning to buy their tyres, plus a deal with Tesco to deliver cut-price tyres. “There are many more elements to the proposition. It’s almost a culmination of two or three years’ work and it’s all come together. The garages are appreciating this, especially in this economic climate. We are accounting for a half and, in some cases three-quarters, of the volume of income of our garage network.” Mike Welch says the independents were there serving the UK motorist 30 years before Kwik-Fit, and he hopes they will be there in 30 years’ time. Apart from Sir Terry Leahy, Welch also says chairman Graeme Bissett has been a great adviser since joining in 2004. He is also a non-executive of Belhaven Group and a director of Macfarlane Group. Welch keeps asking him to stay on with the promise that “next year will be the big one, and why would he do a runner now?” They have a great working relationship and work well together, which bodes well for the shareholder group and the rest of Blackcircles’s executive team in Peebles. Blackcircles.com has a network of eight
warehouses across the UK, so that the tyres can be delivered within a couple of hours to the chosen garages. “We have just about every brand and every size of tyre for every car,” he says. “We’ve 6,000 more parts than the leading high street retailer. It’s a price-based proposition but there is no retention unless you’ve got the service element. We are having to cover all the bases.” So what does Sir Terry make of his involved in Blackcircles? “One of the challenges for Blackcircles is that it’s a fast-growing business but it is still quite small,” says Leahy. “Its number of customer contacts is not huge. However, the broader principles of how you create loyalty with customers apply directly to Blackcircles – making sure you identify who your good customers are and look after them.” He says that if Welch and his team listen to the customers carefully and continue to improve and innovate, Blackcircles has the chance to take on the established brands in a major way. It might be a long and winding road for the two Scousers, but it will be worth it to build the Blackcircles brand. n
Lloyds Banking Group has launched a quest to find Britain’s best graduate and student businesses. The Enterprise Awards, are open to entrepreneurs, who are either currently at university, or who graduated within the past five years – and have been trading for at least a year. Heats will take place across England, Scotland and Wales, culminating in a grand final in March 2012. The overall winner will win a £50,000 prize to invest in their business, as well as a comprehensive business mentoring programme. The scheme is Lloyds Banking Group’s latest initiative to support small business starts ups and enterprise growth. www.lloydstsb.com/enterpriseawards
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>> BQ Scotland’s international insight: Doing business in Hong Kong and China First minister Alex Salmond has been leading a trade mission from Scotland to Hong Kong and mainland China, supported by Scottish Council for Development and Industry and Scottish Development International. It is his second visit to the Chinese Special Administrative Region, and he is expected to be meeting senior Chinese economic figures and companies before arriving in the territory. He last headed out to Hong Kong in April 2009. The Scottish Government sees Asia as an important trading partner for Scotland. Its China Plan makes this a priority market, worth £298m in 2008 and now Scotland’s 15th-largest export market. While the focus of businesses from the UK has been Beijing, Guangzhou, Shanghai and Shenzhen, there 274 cities in China with a population of over a million, and 35 of these have been judged the Centre for International Business as ripe for inward foreign direct investment. These cities account for 17% of China’s population, and 39% of its GDP. For example, Ningbo, a city of 1.9 million, is 90 miles from Shanghai, and less than two hours from there, while Nantong, previously isolated by the Yangtze River, is now attracting investment. One of the Scots ensuring that the first minister makes the most of his trip, meeting key business figures, is Glasgow-born Fiona Donnelly who moved to Hong Kong 17 years ago and set up her company, Red Links, which is involved with business development between Scotland, Hong Kong and mainland China. A Strathclyde University graduate, Donnelly trained as an auditor before moving into business marketing. In early 1995 she grabbed an opportunity to spread her wings outside of Scotland and, being internationally inquisitive, she decided to try Hong Kong. She landed a job with KPMG before setting up her own company and she now represents Scottish Development International and a bio-fuel business called Dynamic Progress International, which involves Professor Martin Tangney of Edinburgh Napier University, and also director of the Biofuel Research Centre. “There are opportunities out here for good Scottish businesses,” says Fiona Donnelly. “Hong Kong is an easy place to do business and it can be a great stepping stone for business into and from mainland China, but that means that anyone considering coming here from Scotland needs to understand that others will also be trying hard to make it happen in Hong Kong. So you have to be alert to the fierce competition. “It’s brutal when it comes to marketing because there is so much choice, so you have to be clear about what you are selling and the potential market.” She also cites Edinburgh-based retailer Context Interiors, founded by Andrew McRae and his wife Alice, in Morningside Road, Edinburgh, which has recently set up “pop up” vintage shops with an antique and brass theme in prime retail shopping malls in Hong Kong and is doing well. She says the long-established Scottish contacts – and other ex-pats who have been through the hoops – are always keen to help with networks in Hong Kong. “There is a very active business and social scene. You could be out every night in a place like Hong Kong. If you’ve been here 30 years, or 30 weeks, people want to help you.” Hong Kong has a strong Caledonian heritage with the likes of Jardine Matheson, the major conglomerate in shipping, airports and retail, while companies such as Hilllington-based Barr + Wray, specialists in swimming pools and top-grade hotel spas, have recently opened an office. But there are opportunities for newer arrivals as our BQ Scotland interview with Liz Seaton shows.
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The flavour of the East Ten years ago Edinburgh-born chef Liz Seaton set up her business in an empty noodle bar – now she runs a highly successful catering company and has three cook books under her belt. Kenny Kemp went to meet her in Hong Kong Liz Seaton is The Boss. That’s what it states on her business card. In reality, she is an Edinburgh-trained chef, a former catering manager with Gardner Merchant, an entrepreneur with three mouth-watering cook books to her name, and a business with a reputation for creating the coolest dinner parties and cocktail events in the South China Seas. She is “the boss” of Gingers, a catering company that could well be based off Byers Road in Glasgow, Comely Bank in Edinburgh, or Rosemount Place in Aberdeen, but is the talk of the ex-pat and European professional classes in Hong Kong. Her company undertakes around 1,000 events a year, and with a wedding event coming in at around $HK100,000 – around £10,000 a pop – then
Happy: Liz Seaton has not only created a business in Hong Kong but has absorbed the lifestyle Gingers is a good-going business. When we met for a coffee on a sweltering hot morning, she took delight in undertaking a tour of her well-organised kitchens, store-rooms and business premises in Hing Wah Mansions, Oaklands Path, Mid Levels, which is on Hong Kong Island. The city is a vertical place, carved into the granite rock which leads from the harbour waterfront to the Peak at 1,600 feet. Mid Levels is an expensive residential district where premium-priced apartments are in tower blocks up to 40-storeys high, so the kitchen space is very tight indeed. The previous evening, the Gingers team had been providing canapés at the British Embassy
for a British Legion event attended by Prince Edward, the Earl of Wessex. Liz Seaton’s other diplomatic clients include the Dutch, Mexican, and the Australian consolates. This exuberant and trim forty-something entrepreneur has just celebrated her tenth anniversary with Gingers and wanted to mark it with a unique event, so for a week – and only a week – she created a “pop-up” restaurant in The Space art gallery in Hong Kong’s trendy Soho district. When her clients heard about it there was a clamour for seats and the restaurant was sold out weeks ahead with the listing columns of the South China Morning Post saying it was one of the must-do events of the autumn.
“Pop-ups – one-off places for people to enjoy great food in fine surroundings – have been very popular in London and New York, but this was one of the first times it has been done in Hong Kong,” she says as we return to a local Mid Levels coffee shop. “The response was overwhelming and it was great fun. “Hong Kong is such an international place where people travel so much that they want to try different types of food and experiment with a wide variety of tastes. That makes the whole experience of cooking here really exciting.” Born on the South Side of Edinburgh, she attended Boroughmuir High School and attended Telford College to train as a chef. “I went down the craft side of the business instead of doing hotel management and training,” she says. “I loved working in the kitchen – and I still do.” She landed her first job at the Prestonfield House Hotel, then Edinburgh’s most prestigious place to eat. While she worked front-of-house, she gravitated to the kitchen and decided this was her future, spending four years honing her trade. With a brother, Murray, and twin sister, Jayne, still living in Edinburgh, she has strong ties with Scotland. Her other brother Robert lives in America. Her father was well-known musician Pete Seaton, who played cocktail jazz piano in Edinburgh hotels and owned several music shops in the city, much beloved of budding Jeff Beck, Richie Blackmore and Eric Claptons. “Both my Mum and Dad were great cooks – Mum did the most wonderful dinner parties but Dad took charge of the family Sunday roast and he made the best Yorkshire pudding and roast potatoes,” she recalls of her father, who died in September 2009. In her early 20s, Seaton joined Gardner Merchant as chef, moving up to become a catering manager. It was then that she organised the private dining rooms for the likes of Royal Bank of Scotland and Standard Life. Her life was going well; she had a small flat in Gorgie, plenty of work and solid employment, but there was a “but”. “This was not enough for me,” she says. “I thought there must be more to life and being a trained chef definitely opens doors for you. I bought a yachting magazine – and >>
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with my chef’s background – I saw there were vacancies for cooking on luxury boats. I applied for a job on a private yacht in the South of France, and got it.” She didn’t let the language barrier hinder her ambition and spent four years on private yachts sailing the Med and the Caribbean, adapting and developing her own culinary style. She was 25 and being a chef on a private yacht was hard work and it was never easy trying to second-guess fickle clients who took every day with a whim. “I cooked for Madonna and Liz Taylor, plus a Manhattan property developer and an arms dealer – it was wonderfully colourful but, as a chef, you have to be very discreet,” she says with a knowing smile. She went back to Scotland on holiday and was talking to her mother, Chris, about her career. She was at a crossroads; she had the options of doing a ski season in France, or heading back to the Caribbean to do a season on a yacht, but best friend Katie had gone to Hong Kong and urged her to head out. It was 1991 and Hong Kong was being prepared for its handover to China, which established Hong Kong as a Special Administrative Region of the People’s Republic of China in 1997. Liz Seaton didn’t know this, but she arrived at a very fortuitous time when the city was booming with trade. She bought a return ticket with a three-month date, but ended up staying 20 years. “I went back, picked up all my stuff in Edinburgh and I’ve not really considered leaving Hong Kong ever since,” she says. She worked temporarily in a bar as a waitress and then went back to work with Gardner Merchant, setting up their Hong Kong Director’s Table service. “I was trying to refine their Western food offering for board room dinners and also looking at the facilities,” she says. “One minute I was at meetings with my business suit on and then the next I had my chef’s whites on and I was working alongside the Chinese chefs in their kitchens. It was definitely an eye-opener.” She spent three years picking up valuable managerial skills, then moved to a major law firm where she was executive chef. It was during this stint that one of the partners asked
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One minute I was at meetings with my business suit on and the next I had my chef’s whites on working alongside the Chinese chefs her to do a private dinner party. It grew as fast as a souffle – through word of mouth. Friends would ask her to organise a cocktail party and she would get on with it. “I was doing lunches at the law firm – 9.30am until 4pm Monday to Friday – and then I started doing a little bit of my own business in the evenings and weekends, mainly through default. It was just because people asked me that I started doing more cocktail and dinner parties,” she explains. “I was preparing a cocktail party for 100 people from my tiny kitchen in my small flat in Mid Levels.” Her food was mini Yorkshire puddings, duck
spring rolls, crab avocado, slow-cooked pork, mini roast beef, tiny portions of fish and chips and delicate canapés, all delicately crafted and beautifully presented. Her dinner party pièce de résistance was fillet of beef Wellington, a favourite in Hong Kong dining circles. “I was rushing home cooking for more and more parties,” she says. “I became too busy and had no life, so I had either to work at the law firm – which was great but I knew it wouldn’t be enough for me – or start a business.” On her Sundays off she would take a stroll up to the Peak, look out at the view, walk around the reservoir, and then head back home. “I was walking up the trail and came back down I noticed a dai pai dong – a noodle shop – that had closed. It was a tiny space but ideal for a small kitchen. I went straight to the estate agent, still in my walking gear, and asked them how much.” It was $HK 10,000 a month – about £1,000. But her plans were put on hold for six months when her mum sadly passed away in April 2001. “When I came back to Hong Kong I thought I’ve got to do this. Mum would be proud of me. So I signed the lease and took a month to write a business plan from the Dummies Guide. I would sit there in the evening with a little whisky doing my plan. “I’m chef-trained, I was a manager in a catering company, but I knew nothing about setting up a business. I wanted to break into business slowly to get a feel for it but the phone started ringing and Gingers simply took off. “I took on part-time staff – there were four of us. Within the first week, people that I had catered for in my small evening business were now phoning me up to do their dinner parties.” She christened the business Gingers, partly because she is a curly-haired, red-haired Scottish lassie. “A good friend called Mel Nelson, a food writer in Scotland, was living in Hong Kong at the time and she suggested Gingers, because I loved ginger lilies and ginger is a predominant ingredient in a lot of my cooking. So that was it.” Liz Seaton is very clear about her description.
It’s high quality Western food which she says is not Asian Fusion – but “Asian-inspired dishes”. Brought up as a thrifty Edinburgh girl, she didn’t require any funding from the bank; she had been saving a nest-egg and this was her investment to buy the key equipment. “I funded it all myself and I managed to get the money back within seven months,” she says. “My investment outlay was $HK 450,000 (around £45,000).” There was nothing left for marketing at the time, except a few printed fliers going through some hand-picked addresses, but word of mouth among the diplomatic corps, the European professionals from the global banks, international law firms and major property investment houses provided a stream of business. Seaton was soon undertaking a host of private dinner parties, junk trips – that's boat journeys out in the harbour – and cocktail parties. “The cocktail party tends to be the mainstay of what we do,” she says. “We are wellknown for our canapés, and all the dainty food that we prepare.” For a big event there will be 35 people working front and behind the scenes. “On our employee compensation insurance, which is essential in Hong Kong, we have 50 staff listed – we've gone from four to 50 in the last decade,” she says proudly. Many of the wealthier Europeans and their families live in the high-rise apartment blocks perched on the hillside leading up to the Peak, while the mega wealthy have larger homes in places such a Happy Valley. “I am very conscious that we do not overextend ourselves,” she says. “We still class ourselves as a boutique catering company because we don’t take every single job that comes in.” This has created an exclusivity that Seaton did not imagine or even pursue, but it certainly helps. “We often have to tell people we are fully booked – and sometimes people change the date of their event so we will be able to do it for them," she says. “I‘ve been very, very fortunate to have good people around me over the last 10 years. Keanu Au, our head chef, is from Hong Kong,
and he’s been with me for eight years. Loren, our office manager, has been here for nine years, while Emma, my accountant, has been with me for 10 years.” She wants nervous clients to be taken care off and allowed to relax knowing the job will be done well, but agrees it is often about managing expectation. “It's nice to cater for kings and queens, and princes and princes, but we’re not the Mandarin Oriental (Hong Kong’s most famous hotel), nor do we claim to be. "Tomorrow we're doing a local wedding. A Chinese girl is marrying a Westerner in an outdoor location for 60 people up in Ma On Shan. We catered for someone with a house on the Peak for 300 people – it was unbelievable, the flat was around 6,000 square feet.” (Most apartments are around 800-1,000 square feet). While Hong Kong’s street markets teem with an abundance of exotic fruit and vegetables and there are street-corner butchers chopping up cuts of meat with cleavers, she has to source a lot of European-style food by ordering it in. “Ten years ago you were struggling to get decent European cheeses or to get air-dried hams, but now it's much better,” she says. “They are not up to speed on organic or
sustainable items. You can get them but you need to order them well in advance," she explains. “We can get Scottish beef here and we do have clients who ask for this. "I've stepped back a bit and I'm not cooking as much, although I still can and I do. When I get into the kitchen and they are really busy I'll help out by doing all the desserts for the next three days. You should see the smiles when I do that." For Liz, the sound training she received in Scotland still holds her in good stead. Her quiet time is January and February, when she often returns to Scotland to catch up with her family, with May and June extremely busy. Then it breaks for the Asian school holidays and is busy again from September until Christmas and the New Year. With up to 10 parties per day, it's a lot of planning, preparation and cooking. "My head chef Keanu had an unfortunate personal situation last summer and he had to take some time off. So I went back into the kitchen again to become head chef, working from 6am to 10pm." Liz Seaton is grafter with a Caledonian work ethic instilled by her parents and she says that you need to be prepared to roll your sleeves up and get on with it. But this workload seems to suit her effervescent character as she obviously loves what she does. She likes to ensure that Gingers’ standards are not allowed to slip and that people are trained to meet her expectation. In 2003 she wanted to fulfil an ambition to publish her own cookbook. She wrote and created Gingers: The Cook Book, a sumptuous guide to home entertaining. It proved to be very popular locally and was reprinted. This was followed in 2004 by The Dinner Party and the Cocktail Party in 2007. Liz Seaton’s Gingers business is a success story of how a Scottish woman has gone into another culture and conquered it. She's coy about turnover but it's certainly a six figure business. “I think the hard-working Scot can travel almost anywhere,” she says. “It’s been an incredible journey. I think I’ve a good few years left – and we have plenty of ideas to grow and develop Gingers,” she says with a broad smile. n
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The market in Scotland is still suffering more than the UK average but initiatives such as Business Improvement Districts and a £200m regeneration project in West Lothian should help >> Some large transactions but overall market is weak Scotland’s commercial property market is still performing worse than the UK average across all sectors, according to CBRE’s Scottish Property Quarterly report for the third quarter of 2011. Across all sectors capital values have fallen (-0.2%) in the quarter, as have rental values (-0.4%). This marks the 12th successive quarter in which rental values have declined in Scotland. Meanwhile construction levels were broadly flat during the third quarter, says the latest RICS Construction Market Survey. The office sector was again the worst performing sector in Scotland, with a total return of 0.3% compared with 1.5% for both retail and industrial. While there is a large disparity between Scotland’s office sector total returns and the UK average total returns, this can be partly explained by the strong performance of the central London market. Retail capital values in Scotland remained flat over the quarter. Rental values however continue to fall, to the tune of 10% since Q3 2008. Despite this drop, equivalent yields for Scottish retail are now at their lowest level since Q2 2008. Having posted a strong Q2 result, the Scottish industrial sector remains the strongest in terms of rental value growth even though Q3 2011 saw rental values fall by 0.3%. This sector keeps its distinction in Q3 by being the only one to have increased rental value overall in 2011, albeit by 0.25%. Q3 2011 was the busiest quarter of the year to date for capital purchases, with £355.1m of investment sales. Investment sales totalled £880m for the year to Q3, down on the same period in 2010 (£1.07bn) but higher than both 2008 (£824.3m) and 2009 (£502.6m). Retail (£132.2m – 37%) and offices (£52.8m – 15%) represented the two strongest sectors for investment sales. Industrials performed relatively weakly with only £32.2m of sales for the same period. Aileen Knox, director of CBRE (Scotland), said: “While the overall performance of the Scottish property market this quarter may not be on a par with the rest of the UK, it is encouraging to see the volume of investment sales has increased and that the majority of investors this quarter are UK-based. Our information shows there were a number of transactions this quarter over £20m covering all sectors with retail, retail warehousing, offices, student accommodation and hotels all featuring. “With the exception of Aberdeen, the office market in particular remains relatively weak, much of which can be attributed to the lack of quality accommodation and the disparity between limited primary stock and the secondary and tertiary markets which fail to attract enough attraction from investors and occupiers.“
>> BID for growth plans Glasgow City Council has launched a consultation exercise to see if businesses support the idea of setting up a Business Improvement District (BID). A Scottish Government initiative, BIDs aim to consolidate and strengthen town and city centres, expanding the local economy and maintaining local retail centres as prime shopping destinations for their area.
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Council leader Gordon Matheson said: “This is the next step for Glasgow’s wonderful shopping district. We have to consolidate the excellent work already being done through the voluntary Style Mile partnership. “With times being hard, we have to look to how we can continue to grow and regenerate our city centre so that it can retain its position as the best UK shopping area outside of London.”
>> Gym fixed it Highcross, owner of Waverelygate, and advised by CBRE and Montagu Evans, has concluded a further letting taking the property to over 80% occupied. The iconic Grade A building – the former GPO in Edinburgh – will now be home to The Gym, which has taken 17,394sq ft on the lowest floor. This will be The Gym’s second outlet in Scotland when it opens in mid 2012. The first outlet opens in Glasgow in January 2012.
>> Callander turns over Telereal Trillium has let its Antonine House on Falkirk’s Callander Business Park to BP Exploration. Acting on behalf of Telereal Trillium, Lambert Smith Hampton secured the deal with BP for 36,600sq ft on an 11-year fixed term lease at an annual rent equating to £11 per sq ft.
>> Sainsbury’s jobs boost in Scotland UK grocer giant Sainsbury’s plans to create 800 more jobs in Scotland over the next 18 months. The jobs will come from new supermarkets in Montrose and Pitlochry as well as an extension to its East Kilbride store. Sainsbury’s has also been opening a number of its smaller local stores in Scotland, including several in Edinburgh. The announcement was made as the retailer opened its 1,000th store, in Irvine, in North Ayrshire. Since opening the first Sainsbury’s in Scotland in 1984 the company has over 8,000 colleagues working in 60 stores. It sources £600 million of Scottish lines annually and stocking around 1,500 Scottish lines in our stores around the UK. Mike Coupe, commercial director, said: “The opening at Irvine and the 800 jobs we will create is just part of our wider commitment to Scotland. Through the proposed Public >>
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COMMERCIAL PROPERTY Health Levy, Scottish Ministers are penalising one of the few sectors which continues to grow and create jobs and which is crucial to Scotland’s economy.” The Public Health Levy is intended to curb excess consumption of alcohol and tobacco has been branded as an ‘unjustifiable tax raid’ on the major chains by the Scottish Retail Consortium. The Irvine store, Sainsbury’s 59th in Scotland, is a 60,000sq ft. store and created 248 new jobs, mainly from the local area. Of these, 47 were previously unemployed.
>> America moves up Bank of America has taken two suites on the 5th floor of Scott House, St Andrew Street in Edinburgh, comprising 861sq ft collectively of Grade A office space in the heart of Edinburgh’s business district. Previously located elsewhere on St Andrew Square, the firm is moving due to a requirement for more flexible space and is due to take occupation in December. CBRE acted on behalf of Bank of America while the landlord, Strathmore Business Centres, represented itself.
>> Heads decide it Scotland’s minister for infrastructure and capital investment, Alex Neil, has launched one of Scotland’s largest regeneration projects at Armadale in West Lothian. The £200m regeneration project is anticipated to see 4,500 permanent jobs created and will deliver 1,000 houses, a hotel, a care home, leisure facilities and industrial and office space. The cabinet secretary was joined by the leader of West Lothian Council, councillor Peter Johnston; Sandra Carter, director of site developers SDA Ltd, and the deputy head boy and deputy head girl of Armadale Academy, Ewan Prentice and Rachel Valentine. Representatives from Taylor Wimpey, Bellway Homes and Asda were also present. SDA Ltd, the developers behind Armadale Station Development, recently completed the first phase sale to Taylor Wimpey and Bellway Homes of two housing sites for the
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construction of 180 houses, with work starting on the sites and the first houses ready in spring 2012. Asda is expecting to see its new store opened in September 2012.
>> Waterfront investment floods in Dundee Waterfront, one of Scotland’s largest waterfront regeneration projects, has secured over £300m of investment – or around one third of its £1bn target. The investment, announced at Waterfront Expo 2011, goes towards a wide range of major projects, including the forthcoming V&A at Dundee as well as the completion of the new Dundee Council HQ at Dundee House, and the creation of a major flood prevention scheme to protect businesses and homes on the waterfront. Dundee Waterfront is split into five strategic development sites, each targeted at a different property and economic sectors, comprising: Riverside (green space and leisure); The Port (offshore wind and tidal manufacturing and processing site); Seabraes (digital media and creative industries); Central Waterfront (residential, office and leisure) and City Quay (residential, retail and marina). Mike Galloway, development director, said: “Dundee Waterfront is attracting a growing amount of interest, inquiries and, crucially, hard investment from a wide variety of quarters. We are well advanced with our plans and investment to completely re-engineer and transform the city. Dundee Waterfront is open for business and there are exciting opportunities for businesses, investors, developers and entrepreneurs at all levels.“
>> Ethical bank expands north of the border Triodos, the ethical and sustainable bank, is expanding in Scotland as more people are turning to ethical savings than anywhere else in the UK. The bank said personal savings are up by 15% in Scotland – significantly higher than the UK as a whole for Triodos where personal savings have grown by 8%. Triodos Bank is opening its first high street office in Hanover Street, Edinburgh, under David Courland, regional manager for Scotland.
>> City settlers happy Two new tenants have been announced for 39 St Vincent Place, Glasgow, by CB Richard Ellis (Scotland) and J&E Shepherd Commercial on behalf of Strathclyde Properties. Clements Chartered Accountants has moved into 2,058sq ft of office space on the fourth floor of the property on a five-year lease and communications regulator Ofcom has taken 2,100sq ft on the sixth floor of the property on a 10-year lease. The firms join a tenant roster that includes Prezzo Italian Restaurant, Essential Viewing, Diagnostic Monitoring Systems and the Scottish Credit & Qualifications Framework Partnership. Steven Hastie of Clements Chartered Accountants said: “The property at 39 St Vincent Place in Glasgow is the ideal space for our staff and clients with its convenient city centre location. And the office accommodation itself is spacious, light and modern so I am sure we will settle in well here.”
>> Aberdeen still booming Aberdeen continues to buck the trend with Ryden fully letting two speculative industrial units in Aberdeen, prior to completion. Gilcomston Investments and Bamma Properties’ development at Raiths >>
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COMMERCIAL PROPERTY Industrial Estate, Pitmedden Road, Dyce, Aberdeen, is an investment in excess of £2.5m. The scheme – close to the airport – comprises two new-build industrial warehouse units with secure yards. Both properties were let on 15-year leases. Survival One, a leading provider of logistics support for survival equipment contractors, took building A – extending to 1,059sq m (11,393sq ft) – at a rent of £135,000 per annum. Alfa Laval, a specialist in heat transfer, separation and fluid handling, took the 795sq m (8,557sq ft) building B at £105,000 per annum.
>> Commitment secured Grosvenor Developments is the latest high-profile occupier to take space at the newly-refurbished offices at 33 Castle Street in Edinburgh city centre. Relocating from Alva Street, Grosvenor has taken a 10-year lease on the first floor, extending to 1,782sq ft, at a rent of £20 per sq ft. The property, which is owned by a client of fund managers CBRE Investors, has been refurbished, transforming surplus retail space on the first and second floors into high quality office accommodation. Grosvenor is the second high-profile occupier to be attracted to 33 Castle Street with Knight Frank having taken occupation of the second floor immediately following completion of works in summer this year. Will Lawrie, CBRE Investors, said: “We’ve invested extensively in upgrading the accommodation at Castle Street as we were aware of a lack of decent small office suites in the city centre.” Stewart McMillan of Cushman & Wakefield, who acted for CBRE Investors, said: “To have attracted two high-profile occupiers so soon after completion of the refurbishment pays testament to the quality of the building and the continued desirability of the “golden rectangle” as a location for business in Edinburgh.’’ Kate Graham said: “Savills were very pleased to secure such good quality office accommodation of this size in such a central location on behalf of our client, Grosvenor Developments Ltd.”
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David Sivewright, head of Grosvenor Developments in Scotland, said: “We are delighted to have secured an office of this quality in Castle Street in the heart of Edinburgh.”
>> Gold for greens view Developer Manor Kingdom has scooped the gold award in the Best Luxury Development category at the What House? awards for its Rutherford Castle development in West Linton. The category commends developments of executive homes where no expense is spared on design, finish, landscaping, security and customer care. The judges said Rutherford Castle fitted all of those criteria with its stone-built homes set around a village green. Prices range from £525,000 to £799,000. Each of the properties boasts feature staircases, stylish kitchens and many of the bedrooms enjoy their own en-suites. The development is adjacent to West Linton Golf Club with some of the properties enjoying uninterrupted views across the greens.
>> Successful climb Outdoor clothing retailer The North Face – made popular by Barack Obama, Bear Grylls, Keira Knightley, Emma Watson and Jennifer Aniston – has reached new heights with the launch of a flagship store in Edinburgh. The California-based company has opened a store at 16 Frederick Street in Edinburgh, its second stand-alone shop in Scotland. It follows on the success of its store in Buchanan Street in Glasgow which was launched in February 2009. Located in the former Oasis shop, the Edinburgh store will cover 190sq m on the ground floor, 1,055sq m on the first floor, with a further 36sq m additional accommodation on this floor and 147sq m in the basement area. The North Face has taken a 10-year lease at a commencing rent of £225,000 per annum, with a single upward rent review in year five.
>> Quay decision made A £20m redevelopment of Scrabster Harbour in Caithness has been given the go-ahead following new funding support from Clydesdale Bank. A seven-figure funding package from Clydesdale Bank, delivered as part of its Investing for Growth initiative, will assist Scrabster Harbour Trust with Phase 1 of the project to redevelop the existing fish market pier to create a modern multipurpose facility. An additional 9,500m² quayside space will also be created as well as improved access, deep water berths, heavy lift facilities and fuel and water suppliers. The works commenced at the port in August and are due to be completed by July 2012. More than 300 jobs are dependent on Scrabster Harbour with the economic output of the port assessed as in excess of £30m. Independent economic research commissioned by the Harbour Trust suggests that the redevelopment has the potential to create 300-400 new jobs in the Caithness area.
>> Potential enormous The new owner of the Artizan Shopping Centre in Dumbarton, La Salle Investment Management, has submitted a proposed £5m redevelopment of the centre to West Dunbartonshire Council. Plans include creating a glass frontage to the centre, a canopy covering the entire shopping area, and an upper floor mixed-use space for office and leisure. By attracting a variety of new retailers, the developers believe that around 150 jobs could be created as a result. Simon Usher, of La Salle Investment Management, said: “The centre sits at the heart of Dumbarton’s High Street and its redevelopment is vitally important in creating a vibrant town centre. It has suffered in the current economic climate and from a lack of investment. We believe it has significant potential and have the funds in place.” Tenants of the 120,000sq ft shopping centre include New Look, Peacocks, the Army Careers Office and Wilkie and Rider.
ThE FuTurE oF AdvAncEd SEnSor TEchnology
Explore innovative solutions and hear future thinking on sensing technology at our industry day:
ThE SixTh SEnSE â€“ AdvAncEd SEnSor TEchnology
Heriot-Watt University Edinburgh conference centre Edinburgh Eh14 4AS Thursday 9 February 2012 (All day event opens at 8.15am, drinks reception 4.45pm to 6.30pm)
For more information and to register a free place, visit
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A driving force for Scotland
While Lord Elgin, now in his 80s, has been a leading business figure in Scotland he was also a seminal figure in the development of motor sport. He talks to Kenny Kemp about his passion for motoring and the halcyon days of the open road
Few people know how close Scotland was to having a Formula One circuit. Someone who does is Lord Elgin, who tried several times to build a world-class race track, first at his ancestral seat in Broomhall in Fife, and then at Polkemmet, 22 miles’ equidistance between Edinburgh and Glasgow. In the early 1960s, Lord Elgin – then Lord Bruce – enlisted the help of Dutchman John Hugenholtz, inviting him over to Scotland. Hugenholtz was a legend; he designed several Formula One Grand Prix tracks including his home track of Zandvoort in the Netherlands, but also Susuka in Japan, the Hockenheimring in Germany and the Jarama in Spain. “We set up a company called Caledonian Motor Racing Circuits Ltd,” says Lord Elgin, sitting in the elegant drawing room of his Fife home. “John Hugenholtz looked at the possibility of designing a racing circuit at Broomhall. He came over and looked at sites. "I approached the internationally famous firm of consultant civil engineers, Sir Alexander Gibb & Partners to undertake a feasibility study with David Murray (Scotland’s first professional grand prix driver) giving technical advice. In the end, it was decided there was not enough
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room on the estate and there were old mineral workings and a public road in the way." But the knowledge was useful and he looked at building a new circuit at Polkemmet, just off the A8 and a mile from Harthill. There was an original design for a 1.68-mile lap. Scotland was desperate for a new race track as Charterhall, the country's only track at the time, was not going to receive a RAC licence in 1965 for the motor racing season. However, there were problems at Polkemmet with the National Coal Board, which had options on the clay and coal beneath part of the site and there was a shortage of finance. Board member Ian Scott Watson approached Grovewood Securities, owners of Brands Hatch, who were keen on looking at Scotland for a possible Grand Prix circuit of three miles.
“We got the chance to buy this land at Polkemmet,” says Lord Elgin. “The track would have been absolutely fabulous. It passed all the local planning and then one of our directors objected to the fact that in order to get the final amount of money we were going to get somebody from England who already owned Brands Hatch. He made a very incautious statement to the press and Grovewood, who had other race circuit interests, withdrew. It was very annoying because we nearly pulled it off.” And a Formula One circuit in Scotland might have given Scots the opportunity to see the likes of Jackie Stewart and David Coulthard winning Grand Prix in their homeland. The motor car has been one of Lord Elgin’s lifelong passions. While he has been the >>
I think Credit for Industry was the first organisation in Scotland that offered companies financing in instalments. We had a very interesting mix of clients
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custodian of some remarkably fine vintage motors – including two 1911 Rolls-Royce Silver Ghosts – and an amateur rally driver, his involvement in helping to bring motoring to the masses is less well documented. Lord Elgin, the 11th Earl, now in his eighties and a descended of both Sir Robert the Bruce and Thomas Bruce, the 7th Earl of Elgin – famed for taking the classical marble sculptures from the Parthenon in Athens – is able to look back on an incredibly colourful life. He is an immensely sociable aristocrat who, despite a serious war injury, was able to drive rally cars in the 1950s in his Triumph TR2, painted in the family armorial colours of brilliant yellow and red. Lord Elgin, who took his title in 1968 after his father’s death, has enjoyed a more formal business life too. He was president of the Scottish Amicable Life Assurance Society for 20 years, now part of the Prudential. He was chairman of the National Savings Committee for Scotland and Lord High Commissioner of the General Assembly of the Church of Scotland. Between 1987 and 1999 he was Lord Lieutenant of Fife, and he has dedicated time and energy as president of the Boys’ Brigade as well as the Arthritis and Rheumatism Trust. He was Grand Master Mason of Scotland between 1961 and 1965 and was a Provincial Grand Master of Fife and head of the Royal Order of Scotland. He was born Andrew Bruce on February 17 1924 and married Victoria in April 1959. They have three sons and two daughters. “My father – the 10th Earl – was chairman of the Scottish Council (Development and Industry) which originated in the 1930s, when Sir James Lithgow, the shipbuilder, established the Scottish Development Council and this led to the wonderful Empire Exhibition in Glasgow in 1938,” he says, clutching his well-polished walking stick which he made himself from a holly tree root and shoot. The then Lord Elgin was president working with Cecil Weir, the convener of the exhibition committee. It stated at the time: “The Scottish Development Council has come to the opinion that there are no better means of advertising the industries and resources of Scotland than by the holding of the Empire Exhibition which will proclaim the industrial and cultural genius
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Scottish firms were cautious about taking government finance because they had to bring in a civil servant
of the Scots people. And promote the increase of trade between the United Kingdom and the Empire." The exhibition was formally opened in May 1938 by King George Vl and Queen Elizabeth. The King, at the last moment, decided not to come by motor car but to bring up the Windsor grey horses and landau in order to travel from the Central Station to Ibrox Stadium where the Lord and Lady Elgin greeted them. “My mother always told me, after she learned of the King’s change of mind, she had a dream that, when the landau entered the stadium under the special welcoming bridge – which was constructed to allow a motor car – it was too shallow for the postilions sitting on the carriage and knocked off their hats. She urged my father to contact the Royal Mews in London and, after careful measurement, it was discovered that my mother’s dream was accurate and the archway was swiftly raised.
“It was a very poor summer with the rain. My father worked hard to make the exhibition a huge success and when it closed at the end of October 1938, with war looming, more than 12 million visitors had seen the fantastic exhibits, many celebrating Scotland’s outstanding engineering heritage.” Lord Bruce was a keen motorcyclist, and learned to drive in the grounds of Broomhall along with his two older sisters. He joined the Scots Guards, then preparing for the invasion of Europe, and was a young lieutenant and a tank commander after D-Day, involved in the breakout from Normandy. On August 11 1944, during the tenacious battle for Chenedolle, his Churchill tank was hit by a German anti-tank grenade and his wireless operator, William Brand from Dundee, was killed. Lord Bruce had a gaping wound; he had shattered his leg, and he returned to Scotland in an ambulance train in September. He spent 18 months convalescence, first in Stracathro hospital near Forfar, then at the Military Ward in the Princess Margaret Rose in Edinburgh. “I didn’t realise that I’d been hit,” he says. “Guardsman Brand was sadly killed. The other three members of the crew were fine.” He attended Balliol College, Oxford, studying agriculture, where his dissertation subject was ground nuts in Africa, which agrarian economists said were going to save the world. Then when the Broomhall estate factor died, Lord Bruce was called back from London, but not before he became steeped in a new financial idea. After the Second World War, the Scottish Council on Industry, which had been set up by the Scottish Secretary Tom Johnston, and the Scottish Board of Trade, merged to become the SCDI and it increased its influence by taking on board the smaller firms. “It was a private body with support from government and subscriptions,” he explains. One of those involved was James Gibson Jarvie – known as JG – who was among the first people to bring “instalment finance” into Scotland. He formed Credit for Industry in Scotland. “I think this was the first organisation in Scotland that offered companies financing in instalments,” he recalls. Lord Bruce became a director along with his father, the Earl of Elgin.
Life’s work: Lord Elgin – born Andrew Bruce – has been a highly prominent figure in Scottish finance and motoring circles “We had a very interesting mix of clients all over Scotland. Although with government supplying funds for local development, people realised there would be a civil servant attending the meetings. And they didn’t know if that same person was going to another meeting with a rival firm, so Scottish firms were cautious about taking government finance because they had to bring in a civil servant.” However, Credit for Industry was very popular and had a wide range of concerns. Lord Elgin recalls several farming enterprises, a laundry business and livestock production, but there was still a desperate shortage of capital for projects. Then in early 1950s he went to work with United Dominions Trust, founded by Gibson Jarvie. Hire purchase was already taking the United States by storm as the post-war generation wanted everything from cars, to fridges and washing machines. The US banks
had 40% of the “buy-now, pay-later” market, but the banks in austere Britain were more cautious. The post-war British car industry was export driven. The Motor Show of 1948 was dubbed by the Daily Express as the biggest “please-donot-touch” exhibition of all time. Although there were 32 British car manufacturers showing more than 50 different models – including the new Morris Minor – most of the production was compulsorily reserved for export, and people at home in the UK had to wait from 12 months to two-and-a-half years to get a car. It is difficult to believe that in 1950s, the British motor industry enjoyed 52% of the world motor export market, although Germany, France and Italy were ominously starting to compete. There was massive pent-up demand in the UK and the proportion of cars bought on hire purchase in the UK rose from 5% in 1948 to 22% by 1957. Lord Elgin, with his agricultural background,
encouraged UDT to lend money for tractors – including the new Massey Ferguson – new electric farm machinery, industrial equipment and lorries. “An agent or dealer got a month’s credit and they could then sell their allocation of motor cars that they got and then pay in arrears,” he recalls. “Dealers had to fight for an allocation of cars, as the assembly manufacturing in the UK were still struggling to meet demand.” But one innovation which transformed the selling of cars in the UK was United Dominion Trust’s invention of RoC, or “rebate of charges”. This was a car financing scheme that helped stimulate the UK’s motor industry, making cars affordable for millions more people. UDT made a bargain with the car dealerships selling the car. If the dealer had a customer who was interested in hire purchase, he was put in touch with UDT. At the end of the contract, UDT then paid a percentage of >>
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the profits on lending the money to the dealer who recommended UDT. “This was a ‘rebate of charges’ and it was an absolute winner,” says Lord Elgin. “We creamed away a great deal of business over quite a period. No-one else had thought of this. There was substantial interest because many of the motor firms were tight on margin and monitored pretty closely. Then they would get a cheque from us, which soon began to change their financial position. It helped us grow.” In the 1950s, the then Lord Bruce was bringing electricity into the farms and houses on his estate in Fife but in every case the
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installation fees were hefty. Fortunately, his mother, Lady Elgin, was a member of the Advisory Board for the South of Scotland Electricity Board. He says: “Because of my experience with instalment finance, I felt that the Electricity Board was making a big mistake and that farmers and rural properties would far rather have a more modest installation charge of say £150 and thereafter the Electricity Board would make their profits once everyone was connected and started to use more and more electrical equipment.” This scheme was adopted and extended all over the electricity board area and they went
on to make money as farmers increased their electricity consumption with milking machines, and the like. “Instalment finance was blamed for irresponsibly lending at first,” he says. “The way it was policed and regulated was not good. It was seen as ‘evil’. There were those who played the game unwisely, but for those who didn’t it was very valuable financial aspect. “A lot of people in the financial world were horrified by instalment finance. My cousin on the board of the Bank of England was deeply concerned. What I didn’t think he realised was that properly done, the assessment of the risk was probably more acute and properly considered. And it was certainly being more widely spread. “Of course, you have to assess the risk involved with lending. And we refused many people because they were simply not credit-worthy enough. However, we did good business and all kinds of clients come in every shape and form.” Barclays Bank had been trying to enter the hire purchase market since 1954 but the Bank of England frowned upon it and it wasn’t until 1958 that hire purchase became acceptable. “We realised that we were onto a winner with instalment finance and it was rolled out so people could purchase their motor cars – which was a major social change for many people in the 1950s and 1960s.” In 1974, United Dominions Trust was one of the largest finance companies in the UK. There was a secondary banking crisis in 1975 when a property boom turned to bust, causing several prominent City institutions to founder. United Dominions Trust had been the pacesetter and all the major banks now realised that they had to have instalment finance. Barclays Bank eventually bought UDT, which had more than 100 branches in the UK. But Lord Bruce also played a significant part in Scotland’s motor sports. In 1946 the motor racing enthusiasts began to return from the war – and they wanted some peacetime thrills and spills. Scotland’s foremost grand prix driver was David Murray, an Edinburgh accountant who owned several hostelries in the town. At the time, Lord Bruce was involved in the Scottish Automobile Club and
A lot of people in the financial world were horrified by instalment finance. My cousin on the board of the Bank of England was deeply concerned he met Ron Flockhart in the Rossleigh garage in Annandale Street. In autumn of 1951, Ian Stewart and Ron Flockhart were invited to David Murray's office in Rutland Square where the idea of Ecurie Ecosse was formed, with the garage in Merchiston Mews. Then the Winfield Joint Committee was formed from all the motor clubs, driven by the powerful Lothian, Hawick and Berwick clubs, and in March 1952 Ecurie Ecosse was founded. Ron, Ian and Alastair Birrell competed in the Monte Carlo Rally in January 1952, and then Flockhart and Ninian Sanderson won the Le Mans in 1956 with Jaguar Ecurie Ecosse – and Scotland was delirious the following year, when Ron won again with Ivor Bueb, an English racing driver who was killed in 1959. In July 1957, following Flockhart’s double triumph, the Ecurie Ecosse Association was formed in Edinburgh. The man responsible was Bill Woolward, a former major from Fife who urged Lord Bruce to get involved. Woolward was a successful advertising man and his business became Woolward Royds, which had the Kwik-Fit account. “We used to have great fun at the motor shows and rallies,” says Lord Elgin. “There were a lot of people who were thrilled with the idea of a Scottish racing team, so we formed an association which would provide a certain amount of money. We had 7,500 members around the world. “There was a fascinating collection of people. It was set up in Edinburgh with members and branches across Scotland and overseas. There was a big dinner each year in the North British Hotel in Edinburgh.” With the development of Ecurie Ecosse, Lord Elgin became association president and when it was wound up in 1972 he was custodian of the title. Hugh McCaig has been instrumental
in reviving the Ecurie Ecosse racing marque. Lord Elgin was for many years the president of the Royal Scottish Automobile Club in Blythswood Square in Glasgow. Could more have been done more to help Scotland as a motor manufacturing country? “The enormous power around Coventry for the manufacturing was difficult to compete with in Scotland,” he says. “Every 50 miles away from this base made it difficult. It cost more for assembly 200 miles away and Scotland was always under that particular pressure from the automotive industry. All the components had to be brought into and added to the cost of the car.” Today, Lord Elgin isn’t so able to drive his collection of cars. “My father was very friendly with the British Standard Motor Company. I had a Standard Eight and I was allowed a special ration of petrol because I was 100% disabled. I used to drive down to Oxford from Fife and there was nothing on the roads. I used to drive up to London, which made me very popular for dates. It was a reliable car and it could do 61 miles per hour.” “I acquired a Silver Ghost Rolls-Royce from Grassick’s Garage in Perth. It had been owned by Gilchrist McBeath, a shipping magnate in Glasgow, and had been kept at Dunira, his Perthshire home. He died in 1948. It was an 1911 model – chassis number 1757 – with three forward gears and a special gearbox designed for Scotland’s hills, and then I acquired another one in Edinburgh. I joined the 20-Ghost Club, the oldest club for Rolls-Royce owners, which was celebrating the 50th anniversary of the manufacturer at Derby. Donald Grassick and Innes Ireland drove my more modern Ghost and accompanied me on the journey south.” The two cars set out, driving through mist, fog
and snow and when they arrived at Derby all the other cars were immaculately turned out, while Lord Elgin’s two muddy Rollers swept in. “There was a tremendous cheer when we arrived,” he recalls. “The younger of my two cars won second place for the Concours d’Elegance, only beaten by a remarkable entry from a member resident in the US.” The rally then drove to Crewe. “The directors of Rolls-Royce in Crewe asked where I was staying. They said I couldn’t possibly be driving home and I replied, ‘But I’m driving one of your cars’. Donald and I set out on the way home and when we got to Shap Fell, I said to him, ‘You’ve got an extra gear in your car and an extra 10 mph speed, go on and I’ll follow’. “It was one of the best drives I’ve ever had, chasing him all the way through the Borders on a clear, moonlit-evening. I crossed the Kincardine Bridge and arrived back at the estate. Donald and Innes Ireland had been back only 10 minutes. “We had a veteran car rally in Perthshire – where I took both my Silver Ghost and my 1912 Napier – and I met one of Gilchrist Mcbeath’s former chauffeurs. I asked him what it was like working for them. It was nothing like Downton Abbey, you know. He said there were three chauffeurs – all bachelors – and they all slept about the motor house. There was a fireman’s pole to slide down when the bell rang. The tycoon had a yacht, and cruised into Oban and then sent a telegram asking that a driver pick him up and take him to Glasgow Central station for the train to London.” Often, if it was a fine evening, when Gilchrist MacBeth arrived in Glasgow he would ask what time the night sleeper was expected in Carlisle. He would then instruct his chauffeur to race the train to the Borders, so he could board the train at Carlisle, often with seconds to spare. This was before the First World War. “This year it would have been 100 years old and I eventually sold it to an American – and you can buy it back now for £1.25 million!” While Lord Elgin has enjoyed a life steeped in Scotland's history and surrounded by a loving family, he has played a major role in Scotland’s business life. But his involvement with motoring and cars has given him some of his most cherished memories. n
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THE ZENITH OF MOON Jimmy Moon is the maker of beautiful hand-made acoustic guitars that are acclaimed by professional musicians around the world. His workshop on the south side of Glasgow is a shrine to the fine skills of a master craftsman at his peak. Kenny Kemp dropped in to meet him
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When the acclaimed singer Adele was in Glasgow recently, she popped into a guitar-maker’s workshop in the south side of the city and was so captivated by the look and tone of one of the hand-made instruments, she bought it on impulse. The instrument builder is Jimmy Moon, an iconic maker of fabulous musical instruments, but also a serious Scottish businessman who exports his hand-built “products” around the globe. He also feels the daily stresses and strains of running a small business which actually makes – and sells – guitars. If Scotland is a land that prides itself in its musical heritage in rock, pop and other forms of music, then it hasn’t really done much to encourage its indigenous instrument makers. In spite of this neglect, Jimmy Moon is one of a rare breed of top-level makers who has a roll-call of professional players who swear by his guitars. Over the years, Moon Guitars has fashioned electric instruments for Texas, Simple Minds, Del Amitri and Big Country. More recently, Jimmy and his team have concentrated on acoustic instruments for the likes of Paolo Nutini, Coldplay, Steve Earl, and his Signature guitars for Scotland’s bard Dougie MacLean and Canadian rocker Bryan Adams. Jimmy Moon has flourished because of his meticulous attention to producing the best possible guitars, using the finest seasoned hard woods. “Adele is playing one of our maple cutaways,” says Moon proudly. Adele fans will know that the Grammy and Brits awardwinning singer is currently recuperating from a throat operation, but her fingers are fine, and it’s been reported she is loving her new Scottish-made guitar. So how did she hear about Moon Guitars? “She was on tour and she came into the workshop to have a look around. She was playing at The 02 Academy along the road at the end of September,” says Moon, a slim and rugged looking Glasgow craftsman dressed in jeans and green-and-black checked shirt. There was also another helpful connection, because Jimmy is part of a musical dynasty – his youngest daughter Rose is Adele’s agent, while daughter Arlene manages Coldplay, and brother Brendan manages Paolo Nutini.
It might seem a lot of money but it is not expensive for a hand-made product which lasts a lifetime “Musicians are craftspeople in themselves and they appreciate the effort – and hardship – that goes into making an instrument,” says Moon. “They are making something because they love it. That’s like us.” Moon Guitars have been exporting guitars all over the world for 20 years. “One went to Australia last week and we’ve got one going to Dubai next week. People find out about us. We don’t produce millions. We’ve a following in the US which is famed for guitar-making with the likes of Martin and Fender. America is a funny country though; they don’t understand shipping. We can get someone wanting one of our guitars who doesn’t understand the customs costs. Their own home market is massive, so when we get an order from a US customer they don’t realise they have the international shipping costs and the state taxes, which all go on top of the
cost. However, a lot of people have Scottish roots and they like the idea of playing an instrument made in their ‘homeland’. Moon Guitars makes around 150 instruments a year, which included the standard, custom and master series guitars and mandolins. Moon Guitars are not cheap, they start at around £1,400, while the master series rises to £3,200. A Dougie MacLean Signature model will set you back £3,013. A mandolin costs around £700. “We have made electric instruments and, for example, a few years ago we made the electric banjo for the Scissor Sisters, but the focus is acoustic,” says Moon. “We’ve made a lot of specialist instruments for professionals, but we also make for ordinary people who want something specific. “The Royal Academy of Drama and Music – now the Conservatoire of Scotland – does a fantastic course in traditional music. We see a lot of the students from there who play two or three acoustic instruments. They like our instruments. “At the moment, it is a hard sell. In the recent boom years we couldn’t supply enough shops and they were screaming out for us. It was great. It might seem a lot of money but it is not expensive for a hand-made product which lasts a lifetime. It’s an inheritance piece.” Turnover in the boom time was nearly £400,000 a year, but things are tighter today, and orders are harder to find, reflecting the general economic downturn. Moon started making dulcimers in a farm workshop on Arran in 1979 when the Firth of Clyde island was a buzzing colony of alternative living and Glasgow hippies. He met and married his wife Joan who comes from the island and she has remained a central figure in the Moon Guitars’ success story, looking after the finances and marketing. “The idea was to make a fortune, but we’ll settle for weekly wages,” he laughs. What made you become an instrument maker? “Stupidity,” says Moon, with that wry Glasgow humour that means he loves what he does, but wants to downplay its merits. His father, also Jimmy Moon, was a confectioner in Govan in Copeland Road, near Ibrox Stadium. >>
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They laughed at me, but I’m a determined so-and-so and I just kept on at it, supported by my family. My father thought I was nuts “I started when I was 15 and we saw a television programme on John Pearce making an Appalachian dulcimer. It was just a straight bit of wood with three strings. Me and my buddy thought we could do better than that so we got the saws out and started making them.” He had a good laugh twanging the strings and then put it to one side. He went off and served his apprenticeship as a toolmaker in Fulton’s in Johnston who did jobbing work for Burroughs, IBM and Roll-Royce. This was pressed tools and jigs and fixtures. “It taught me layout and how to do that end of it,” says Moon. “There was a lot of trigonometry which I was useless at during school, but because I saw the practical use of it, I grasped it fairly quickly.” He then ended up in Paisley Technical College in the mechanical engineering department as a technician. “This opened my eyes to other materials. I saw how to engineer in plastic and wood, opening up a whole range of ideas in my head.”
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Jimmy Moon is a musician himself who can play most fretted instruments, but he is best known as a double bass player in a bluegrass band and in a Glasgow swing jazz band called Rose Room. He says: “I met Joan over in Arran and we got married. The only job I could get was on a farm and I don’t have the build for heavy farm work, so I started making instruments. There was a great craft industry in Arran at the time. The farmer we worked for let me build a workshop on the side of the house and I started picking away at night time and getting some sales. Then some repair work came in and it grew so that eventually I had to move to Glasgow.” The four-string, flat-top mandolin was the instrument which got Moon Guitars into small-scale production; before this it was one-off instruments on order. In the meantime, he was watching, listening, reading the manuals and learning all the time. “I was lucky with my early guitars – they worked,” he says. “They weren’t technically
good but they functioned well and they sounded good. More importantly, they played in tune!” He attempted to get into a prestigious musical instrument-making school in London but was turned down. “They laughed at me, but I’m a determined so-and-so and I just kept on at it, supported by my family. My father thought I was nuts. I had three daughters to bring up and I was working hard for very little and Joan had three jobs to keep it all together.” He worked long hours at the workbench and it began to click. The Glasgow rock scene took Jimmy Moon’s guitar to its heart. He set up in Glasgow in 1985 and ended up in Pollokshaws Road. He undertook guitar repairs and discovered there are ‘no rotten guitars, there are only rotten players.’” Over the past 15 years he has worked to create the kind of tonal sound that might be expected in a concert acoustic instrument. His latest 0003CE model was given a five-star review in the November issue of the influential Acoustic magazine. The reviewer said that the instrument was put together beautifully, perfect for playing and the “fingerboard should be a case study for students of instrument building”. Moon Guitars Ltd is tucked in behind a red-sandstone tenement, up a cobbled alley behind the Bay Horse pub. There is a tiny music shop in the front, then a photo-lined office, where Joan is perched at the computer. The office leads into the inner sanctum; a sawdust-strewn workshop with racks of planes, chisels and gougers, with a German band-saw from the 1950s (which is still used every day) and a more modern wide belt-sanding machine which buffs the raw timber into the requisite thickness, plus finer sanders to create the smooth finishes. There are wooden benches, including the original built by Moon from driftwood on an Arran beach, with vices attached and underneath – among the wooden shavings and discarded blocks of mahogany – are the frames for moulding. Up a few wooden stairs is another workshop for glueing and fixing necks and bodies and a heated cupboard where wood stock is seasoned. Then there is a dust-free room for spraying lacquers and polishing.
The Rule of 18 In Jimmy Moon’s guitar workshop ‘The Rule of 18’ is one of the most important things to learn. It related to the intervals between each fret on a guitar or a mandolin. The Greek mathematician Pythagoras was the genius who discovered the properties of vibrating strings when he examined the lyres and lap harps of ancient Greece. It is a graduated scale. Jimmy Moon says: “If you take a length of guitar string and divided it by 18, then you take this away from the original length, that gives you one half-tone. There is compensation for the effect of a finger on the fret pushing the string down. The actual answer is 17.816. People just look it up on the internet now, but when I started you had to work it all out with a slide rule and calculator to get the intervals on the frets.”
“We have some traditional woodworking machinery and some more modern hightech,” he says. “There are no computer-aided cutting machines here; everything is done by hand and eye and exact measurements with rulers.” The most common wood used is Indian rosewood, bought in Mumbai. There are specialists who supply the guitar industry with wood for the backs and sides, including pau ferro, ziricote and black acacia. Then the sitka spruce comes from Canada and maple from Alaska. Moon Guitars makes only one or two guitars per week, depending on the intricacies. Someone wanting a pearl-inlaid fingerboard can expect to pay more, and it will take longer. “That kind of instrument takes a lot of work,” says Moon. “The little things add an immense amount of time in terms of the decoration, although they add nothing to the sound. But people want a bit of glitter. It does work; at trade shows a guitar that we’ve dressed up will be first one to sell.” Each wood has a natural ability to reflect or
absorb sound, depending on factors such as the dryness of the wood and the density of the seasoned timber. Jimmy Moon has spent a great deal of time looking into these attributes to create an original sound. “Some timbers are very flexible and have different qualities in terms of resonance for bass and treble sounds,” he explains. One of his bugbears is that Scotland’s colleges are teaching guitar-making as a hobby and not as an industrial process. “This is our livelihood,” he says. “We have to be economical and look at what the guitar industry has to offer. “We’ve got a great team – Steven Devine from Glasgow, who concentrates on the finished aspects of the guitar. I usually kick it off and finish it off. He’s been with me for 25 years, starting as an apprentice and still makes the best tea! The two other lads are Guillaume Benoit from Marseilles, although the French can’t rock ’n’ roll, and Innes Thomson from Fair Isle, who has been here for 12 years. They do the bulk of the work on the bodies.”
They have all learned their trade watching the master at work. So what advice does he give his team? “Hurry up! That should be ready yesterday. We work to deadline a lot, but you can’t really force the finishing, you have to allow the lacquers to cure properly before they can be polished.” Steven Devine says: “Individuals who have ordered guitars find it interesting to come in and see the workshop and see the progress of their instrument being made. The customer gets a buzz from that – because it is complicated from start to finish. It’s good to see the final instrument being made and played.” At 62, Jimmy Moon wants his brand and reputation to continue, but he says it’s getting harder to keep the business going in Scotland. And if Alex Salmond or any of his Scottish government ministers are reading this, they should take heed. “It’s becoming so hard to make things in Scotland, which is what we need to do if we are to get out of recession and build the economy. There is so much legislation against what we do; the finishes that we use, the timber that we use, the glue we use, the plastic we use.” He says in India and China, craftspeople are able to churn out high quality products very cheaply. Brazilian rosewood is an endangered species, so any timber has to be reclaimed through sustainable sources. “Then there is the health and safety, the fire precautions,” says Moon. “It goes on and on. And I think, ‘Why am I doing this?’ But we’ve put in so much toil and sweat, I don’t want to see it just vanishing.” What could help his business? “Taking the VAT of musical instruments would be a start. At 20%, it’s hard on a hand-tomouth basis coughing up every quarter.” He still gets a kick when he sees some of his guitars being played by leading musicians and hearing the quality of the sound. “I think about the hours I put into making each one,” he says. “You’ve got to take the time to make sure they’re perfect,” says Steven Devine. “But we live in an impatient world,” interrupts Jimmy Moon. n
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Colin Temple, chief executive of Schuh, started work as a butcher’s boy in Middlesbrough at the age of 12, and makes some startling comparisons between that and the world of footwear reports Gillian Law “Fashion’s not that far from butchery – it’s perishable, and the sooner you can move it, the better price you’ll get,” says Colin Temple. “And when you’re a butcher, it’s easy to sell all the nice cuts, all the steaks – whereas to get rid of the neck of lamb, all the ribs, that’s tougher. That’s one of the lessons that stays with you throughout retail and it’s one of the reasons we’ve done well – we work our stock hard and we recognise when things aren’t great and get rid of them, fast.” Temple started work at Schuh back in 1988, looking for a change from his London-based
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job with Woolworths, and hoping a move to Edinburgh would let him buy a flat. Twenty-three years later, that move has paid off rather spectacularly, with the sale of the business to US sports and footwear giant Genesco for £125m, earning Temple and his business partner Mark Crutchley a healthy £25m each. Back in 1988, though, the “gents’ merchandiser” role at Schuh just meant a new job for Temple. Having met his wife “over the Pick & Mix counter” at Woolworths – and subsequently being moved on because
inter-company relationships were disapproved of – Temple was keen to settle down. “I was up in Scotland a lot, dealing with shoplifting cases for Woolworths,” he says, “and while I was hanging about the station I kept seeing this little shop on North Bridge. Then I saw an advert for Schuh and realised it was that quirky little shop. So I applied, and got it.” At the time, the seven-year-old company was owned by Goldberg's, which had bought the company from founder Sandy Alexander in 1987. Two years after Temple joined, however,
Goldberg’s went into administration and he was faced with a tough choice. In the end, along with five other managers, he raised the money to buy the company. “We had to go and borrow the money for the management buyout,” he says, adding something of an understatement. “That was hard, but probably the best investment I’ve ever made.” “That was a very scary decision – but back then it was only a decision about me. This (recent) decision was about 3,000 people and would affect their lifestyles. But Mark and I saw it as a one-off opportunity that might not be repeated.” Schuh wasn’t formally for sale when it was approached by Genesco, Temple says, but he and Crutchley realised they had to consider it seriously. Genesco is one of the largest footwear retailers in the US, operating in a very similar young fashion market, and was already planning moves into Europe “so we thought we’d be part of that party”. “And we liked the people; they understand the foibles of the trade,” he says. Genesco seemed the right size and type of buyer. “If we’d sold to a venture capital company that wanted to double or treble the size of the company, it could be a nightmare,” he says. “And if we’d sold to a British company, they might have wanted to close our Livingston office and get some efficiencies in the distribution side. So, they’re going to let us run the business.” The impact on staff was clearly a huge consideration for Temple and Crutchley, and they made one of the business stories of the year when it was announced that staff would receive considerable bonuses. A total of £37.3m was paid out to just under 3,000 staff, ranging from smaller payments of around 10% of annual salary to staff who had been there for six months, up to six times the salary of long-term, more senior staff. “Our American purchasers were a bit nervous that people were going to run away (having received such large payouts), but they honestly didn’t – what we gave them was a great little business with a motivated work force,” says Temple. Schuh has always paid more than most high
Time to reflect: Colin Temple puts great faith in the abilities of his young staff street retailers, anyway, Temple believes, with 16-year-olds paid a standard 18-year-old salary right from the start. “We take the view that if you do the work, you get the wage,” he says. “And they get a 40% discount – plus our stores are like social clubs, they’re quite a cool place to be. So what we generally get is the bright kids.” Many staff start as 16-year-olds; go off to university – often continuing to work in a Schuh store in their university town – and come back to the company when they are finished. With a policy of hiring from within as much as possible, their prospects are good, Temple says. “One thing I’ve learned is that young people are fantastic. I do a ‘round robin’ a couple of times a year and visit 20 to 30 stores in a couple of weeks – and you meet these
18-year-olds who are just so worldly, so together – I find it hard when people talk about the ‘hoody culture’ when the young people I meet are just so clever. The biggest asset we have is our staff.” Temple is the ultimate team player, constantly talking up his staff, insisting he himself is “skill-less” and lets the staff do all the work. “I think I’d be mischievous to suggest I’m fashionable – to me our product is all commodity,” he says. “But we employ ‘cool dudes’ who understand fashion, and I really can’t think of an aspect of the business that the guys and girls we employ couldn’t do better. My job is just to hold it all together.” The higher up the management ‘pyramid’ you are, the further out your viewpoint, Temple says. “So the sales assistant on the starting >>
We employ ‘cool dudes’ who understand fashion and I can’t think of an aspect of the business that the guys and girls we employ couldn’t do better
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BUSINESS LUNCH wage is thinking ahead as far as the next ten minutes, or the next break. If you’re a supervisor, you’re thinking about tomorrow and whether you have enough staff for the week. A regional manager will have put Christmas to bed and be thinking about Easter. And the guy who runs all our retail... he’s thinking about next year. So a lot of my job is thinking about what’s happening in the medium- to longer-term – have we the pieces in place and the infrastructure we need to do that?” Schuh is managing to survive in a tough market place, in part because the demographic it serves is relatively protected – 15 to 25-year-olds are generally still living at home, and care enough about fashion to prioritise spending on Schuh’s products. “And there’s some fashion products at the moment that are right up our street,” says Temple. “Vulcanised products, like Converse and Vans, are very hot at the moment. So (while) a lot of retailers are suffering from a poor winter – it’s not that cold, boot sales are a little behind the eight-ball – we’re more than compensating in other areas.” Schuh’s online store is also a success and the company is now developing an app to allow people to buy from their phones and tablets. The understanding is that fashion shoes are very much an instant gratification purchase. He says: “People ask, who are your competition? And they expect us to say other shoe shops – but it’s also T in the Park, restaurants, anything that’s going for that disposable income. Very few people come into our stores because their only pair of shoes is leaking – they want them because they want them.” And future plans are bright. Schuh is planning to double in size over the next few years, including a stronger move into the London market where it is fairly under-represented. While Temple insists the company will retain its own character, there are lessons it can learn from its US parent. The way shoes are brought to the customer, for example, is different in the States, with more of a focus on up-selling by bringing multiple options to the customer. Schuh is taking a part of that but retaining a more British approach. Temple and Crutchley will remain with the
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company for at least four years as part of the agreement, and Temple says he would be happy to remain there for the next 40. He’s not a man for golfing – and he jokes that his wife put her foot down at the idea of him being at home all the time.
The money, he says, “gives a bit of security – we’ve shared a bit with the family. “I think we did the right thing, in the right way. And if time tells us we did the wrong thing – at least we did it in the right way.” n
Steak a claim With glossy dark wood furnishings, leather chairs and cowhide-covered sofas, Kyloe Restaurant and Grill is going all out for the “gourmet steakhouse” look. Kyloe is an old Scottish word for a cow. It offers eight different cuts of Aberdeen Angus steak, including a steakboard giving a chance to try three unusual and interesting cuts. There’s plenty of other options available, including fish and vegetarian options, so I wouldn’t be put off if you don’t really fancy red meat – but we were definitely up for giving the beef a go. Our waitress offered to bring out the raw cuts on a board to explain the differences, but we were both pretty sure of what we wanted, and keen to get eating. We started quietly enough, with four oysters for me, and terrine of Scottish game with toast, for Colin. Both delicious, but just a warm-up for the main event. For the main, I had chosen a fillet steak, with some chips and savoy cabbage with bacon, while Colin got adventurous and went for the steakboard – with bavette, onglet and marinated feather steak – a thin cut described as having “massive flavour”. Some mushrooms and skirlie potato tried to make it a balanced meal. Well, we might as well have not bothered with the side orders – the steaks were too good, and too big, to bother with anything else. My fillet was enormous, and I thought I’d never eat it all – but I managed. Deep brown and caramelised on the outside, a rich red inside, it was perfect. The steakboard, too, was quickly cleared – with bavette declared the winner, but by a narrow margin. Kyloe is already a hit, with Christmas bookings filling up fast – as we discovered when Colin tried to book to come back again in a few weeks. It’s always a sign of a good lunch when you want to book again for a dinner before you even leave. Too full for dessert, I’m afraid – but that gives a good excuse to go back again. Kyloe Restaurant & Grill at The Rutland, 1-3 Rutland Street, Edinburgh EH1 2AE, 0131 229 3402, www.kyloerestaurant.com
Letâ€™s geteachtoother know
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utility is so cool
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We may not have just conquered the Eiger but we want to appear as if we have – while still looking good on the train, as Josh Sims reports “Look at the way water breaks on it into beads and runs off,” says Donrad Duncan. “That’s an example of how nature provides ideas that we try to emulate. It requires a lot of research and development.” Duncan, however, is no fruiterer but the designer of a new Italian clothing company called Ma.Strum. “Most industries apply the latest technologies wherever they can, but that’s much less so in the clothing business,” he says. “The object of clothing design needs to be much more about benefitting the user – and I say user rather than customer.” The approach is, however, catching on. Ma. Strum is, of course, not the first brand to look at fashion with a more functional approach – clothing as tool rather than trend. Ma.Strum itself is co-created with the Massimo Osti Studio in Italy, revered among menswear aficionados for its pioneering fabric technologies and creating the Stone Island brand. Duncan’s previous job was designing advanced clothing for Swiss Army knife-maker Victorinox, which is moving increasingly into
the lifestyle market. Indeed, such is the demand for smart clothing – in the sense of utilitarian design as much as style – that it is increasingly seeing the same market open up for its originators; those brands that have long developed it for specialist use, but which have found customers keen to wear the kit as much to the mall as the moors. According to Paul Anderton, European merchandising manager for Patagonia – previously of Saloman and Berghaus – in large, part of the new appeal of such specialist clothing lies in the greater awareness of and demand for durability and utility which has been fostered by the recession. “When they have less money to spend people look for clothes that are especially versatile in all situations and are prepared to invest in those that are durable, waterproof, breathable, that have the right pockets and fastenings and so on, rather than pay less for something that just looks like it might have that functionality,” he says. A more educated consumer – aware as much about cloth and construction as brands, >>
There is no question that the market is developing an appreciation that a technical garment should look as good as it possibly can
Image courtesy of Berghaus
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thanks in large part to access to information via the internet – has helped fuel interest too. And a breakdown in dress codes that has seen less and less need for formality in the nine-to-five working world have also encouraged the transition of technical clothing from its intended purpose to tackling the trials of more everyday life. The specialist brands have certainly preempted this demand too – by providing styles, most notably in outerwear, that look the part as much in an urban environment as in the traditionally day-glo world of outdoor sports. Anderton notes that supreme utility is not enough if the garment looks unappealing, especially for women, for whom colour, silhouette and the right details remain just as important. And according to Tim Jasper, brand director of Rohan: “There has been a demand for those items of clothing in particular that move away from that highly functional aesthetic that specialist clothing has traditionally had and towards retaining that functionality in more wearable styles. That can be a problem for the guy who wants to look as though he has just come down off the Eiger, but it works much better for the guy who wants to do that and then not look too out of place waiting for a train.” Rohan, which has seen business expand to encompass 60 own-brand stores nationally, has consequently introduced the likes of fleeces that look more like conventional knitwear and general use, deconstructed blazer-type jackets that also happen to be abrasion-resistant, crease-resistant, breathable and machine-washable. And, Jasper notes enthusiastically, with zips on the pockets. The demand for clothing that has as much panache as practicality has spread across sports too. As across the dale, up a mountain or on the snow, so too at sea. If fashion brands have developed their own specialist clothing for sailing over recent years – Prada, for example, has its Luna Rossa line, already with annual sales of more than E20m, while Italian luxury textiles company Loro Piana has recently launched its Regatta clothing collection to celebrate its Superyacht Regatta competition – so specialist sailing brands are
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Raw material: Working on colour and print with rolls of fabric in the design studio at Patagonia headquarters in Ventura, California. Image courtesy of Jeff Johnson
Nature study: Donrad Duncan, designer at new Italian clothing company Ma.Strum
becoming more aware that their clothes are not just being worn on deck. “Marine brands have to be careful not to dilute their perception in the rather insular marine market, but there is no question that the market is developing an appreciation that a technical garment should look as good as it possibly can,” says Matt Gill, product development manager for the Gill brand. “Now consumers don’t just want bright red, yellow or navy, for example. Up until just a few years ago you would never see classic black. It might be low-visibility in the water but it looks good and has seen real demand.” Nor is Gill Clothing alone in pursuing more pleasing aesthetics to their specialised clothing. Norwegian brand Helly Hansen has sought to blur the fashion/function boundary with its new Ask advanced sportswear line. Henri Lloyd has teamed up with Japanese fabric and chemical manufacturer Teijin to launch Blue Eco, sailing’s first fully recyclable, waterproof/breathable collection. But while recessionary pressures, practical lifestyles and changes to the design approach by manufacturers may all be important in shaping this growing cross-over market, none of that touches on one of utilitarian clothing’s biggest draws: image, and especially so for men. The clothing might suggest an outdoorsy life rarely actually lived – “the technical jacket says you’re healthy, active, practical,” as Anderon puts it – but it also suggests a certain old-fashioned manliness that is big in fashion right now. A trend for workwear-oriented style – backpacks, heavy boots, chunky knitwear – has seen technical outerwear embraced in particular, especially any in line with the growing appreciation for so-called heritage brands. “And this rugged aesthetic not only suits the times, but its comfort and practicality means it’s likely to last much longer than most trends,” says Alastair Rae, co-founder of British menswear brand Albam, which has launched a line of parkas made from Ventile, one of the original, WW2-era technical fabrics. “It may be fashionable but in a way this is a new appreciation for clothing that is beyond fashion, for clothing that is made to be fit for purpose.” n
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It may be madness, but one thing is for sure, designing five new cars in less than a year is going to be exciting. But Lotus has never been short in the ambition stakes, as Josh Sims reports
Donato Coco says he feels rather tired. “This just never happens in the car world,” he says. “Normally a car company builds on the previous generation of cars. New cars evolve. We’ve had to pull together all our brand values and start from scratch. As a designer that’s very exciting. So exciting you could die from it...” Coco is, however, still with us, even if he is no longer with Ferrari. The man who helped shape Ferrari’s F430 Scuderia Coupe, California, and the F458 Italia, among others, has now made the move to design director of Lotus, the relative minnow of a British sports car company that in recent decades has been somewhat on the skids. He has given up sunny climes for eastern England. For what? Only to design five new cars in the space of nine months – against the industry norm of one every year or so. “The design staff went up from 15 members to 65 almost overnight,” he says. “We got them from all over the world – wherever we could find them. And we’ve had to dream up what we’ve done since, otherwise when we woke up each morning we were already late.” Next year sees the launch of the first dream – a new Esprit V8, returning Lotus to the supercar market and, of course, making a nod to arguably its most memorable model, driven underwater by Roger Moore as James Bond in The Spy Who Loved Me. This will be rapidly
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followed by a new Elise, to take on the Porsche Boxster entry-level market; the Elite, a two-plus-two coupé more in the mould of Aston Martin’s DB; and the Eterna, Lotus’ first four-door “super-saloon” – all of which will necessarily share a distinctive handwriting. In short, Lotus is gambling that it can go from historically-significant, fondly-recalled but commercially-stalled has-been to a serious new player in the luxury sports car market almost overnight. “Why do it? Madness, stupidity, all the usual reasons,” explains a buoyant Dany Bahar, an ex-senior vice-president at Ferrari, and before that the COO of Red Bull and now the new CEO at Lotus. “But then any manager dreams of being able to reawaken a sleeping giant. It’s better than just doing more of what your predecessor did. “This is a massive challenge. There are massive problems. But it’s massive fun. There aren’t many people who would take on Lotus now,
not even without its debt, not even if it was for free. So the only response is attack. It’s 50/50, win or lose.” Amid a recession, they may seem intimidating odds. But Bahar is confident that Lotus can be turned around and a British motoring institution saved – after all, Lotus may now be owned by the Malaysian car-maker Proton, but it was the company’s late founder Colin Chapman who put motor racing on the map in the UK. He made stars of the likes of Mario Andretti and Ayrton Senna. He pioneered many of the clever engineering techniques that became standard in Formula One racing (the company continues to operate a world-class engineering division, contracting to the likes of GM, Toyota, Vauxhall and Dodge). And he created a name legendary in the UK’s autophile circles to stand alongside the likes of Bentley, Rolls Royce, the late Bristol Motors, or the now also re-born Jensen. Bahar’s plan is simple – to follow up on what
You have to retain that special enthusiasm for Lotus, one that had has survived even the last 15 years when it has been somewhat slowly disappearing
Chapman realised back in the 70s, but could not correct, that it is almost impossible to build a business on low-volume, low-margin car manufacture. Instead, as Porsche has done, you need to retain the enthusiasts’ love for the brand while offering a range of cars that target several niche demands, including the latest ones. “Even the idea of sports cars being sold as everyday, useable cars was unheard of just 10 years ago,” says Bahar. “But that’s not enough to revive the brand – you have to retain that special enthusiasm for Lotus, one that has survived even the last 15 years, when the company has been somewhat slowly disappearing. Lotus is still up there for those fans even after that.” Indeed, as well as a design revamp and a market re-positioning, an image overhaul will be part of the turnaround process too. All Lotus cars will continue to be hand-built in England (“not by three robots wherever,” says Behar); there will be a new emphasis on tapping into the romance of the brand through the launch this autumn of a clothing and accessories line – less the usual car brand promotional spin-offs as an upmarket collection in cotton, cashmere and high-grade leather that mentions Lotus in passing – products that can reach the strong base of >>
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Road cars were developed by Colin Chapman just to finance the racing. Lotus is the only company to have won all major racing championships
fans who love Lotus but cannot afford the cars. And, as of last year, there is the return by Lotus to F1, after an 18-year gap. “That’s just a no-brainer,” says Bahar. “It’s part of what the company is. Road cars were developed by Chapman just to finance the racing. Lotus is the only company to have won all major racing championships. And, besides
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which, racing gives us technical credibility. If it works for racing, it will work on the road – and the true sports car customer is someone who still cares about that.” The company is even going out on a limb in the most unexpected of ways. The eagle-eyed may have noticed that five new car launches were mentioned, but only four described. The
fifth is, remarkably, an electric, four-seater city car concept – chic, nifty, progressive, but hardly something to get the petrol-heads revved up. Yet it points to the revamped company’s new maturity. “There’s no real reason for launching a car like that,” Bahar concedes. “You could live without it, but the fact is that the whole car market has changed over recent years towards smaller and greener cars, like Smart, Mini, Prius – and we have to recognise that. Besides, there is still room to do all that with a sportier model.” Room, certainly, has been something Donato Coco has been pondering too, in between trying to catch some sleep. “We’ve enjoyed this last year,” he says. “And we’ve suffered a lot. Now we see if it will all work out. The most important thing has been to make sure we don’t repeat mistakes – that we correct the limitations of the previous cars.” What could he be referring to? The horsepower? The power/weight ratio? The handling through that tricky s-bend? “I met this guy the other week who was a real Lotus fanatic, one of the many around the world,” says Coco. “But he told me he had a problem with them. He was tall and couldn’t get into any of the cars. That’s crazy and such a shame. So we’re making sure you can get in and out of these new cars more elegantly.” n
My early memories of Land Rovers were my father’s dusty blue vehicle which he had when he lived in Morocco. It was an adventure vehicle that allowed us to tackle rough terrain and cross a few dodgy mountain passes in the Atlas Mountains. These post-war beasts were
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built for the outdoors and capable of dealing with lots of challenging road conditions, but the bucket seats I endured as a boy in the back of the vehicle didn’t make for the most comfortable experience. We were constantly jiggled about on all the bumpy unmade roads.
Yet these early experiences in the faithful Land Rover instilled in me a sense of excitement about travelling to exotic places – and perhaps set in place the thinking which eventually led to Rabbie’s Small Group Tours, my tourism company which shows
Rabbie burns the trail Robin Worsnop is the brains behind a tourism business which allows tens of thousands of visitors to experience Scotland. So how was his own tour with a new Land Rover?
visitors the rugged splendour of Scotland. So I was looking forward to seeing how much these great British icons had moved with the times. Taking out and driving a pristine Land Rover Discovery 4 in 2011 was a completely and totally different experience to my 1980s
tripsÂ around Africa. The gentle hum of the automatic engine with eight gears and the smooth changeover between gears made the old memories of growling utilitarian motor as you shifted the great black stalk of the gear stick, disappear quickly into the past.
Here was a luxurious vehicle with extremely good handling on country roads and the high-level views made the country driving experience second-to-none. It was very stable and the suspension held the vehicle in position extremely well, even when skirting a few >>
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Power: Robin Worsnop was impressed by virtually every feature of the Land Rover Discovery 4
I can imagine it being a perfect vehicle for a weekend with a few close companions hauling up the majestic A838 past Loch Shin to Kyles of Durness
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ditches in some of the not so well-kept Scottish country roads. I have to say though that it is a very bulky car for city driving and not easy to find suitable parking spaces in a place like Edinburgh – so I would never want one for the city. But I know that Scotland is much more than its capital and I can imagine it being a perfect vehicle for a weekend with a few close companions hauling up the majestic A838, past Loch Shin and all the way to Kyles of Durness and the top of Scotland, or down the A708 past the Grey Mare’s Tail to Moffat and Carlisle. You could feel the power under the bonnet and tell that it would eat up the mountain pass to Applecross. It’s certainly a vehicle that suits Scotland’s terrain – in whatever the weather conditions that are thrown at us. Other interesting features – which took me a bit of time to get used to – are the reversing camera shot that appeared on the console. It is very wide angle shot, which is designed to help you see if you are pulling a boat trailer or a caravan. Very clever indeed. Then there was the excellent sat nav, Blue Tooth phone system, the driver’s seat position memory, which I liked, and you can just leave the key in your pocket and not fumble about with the ignition. If you’ve got a big family, this is a spacious seven-seater – you’ve got two pop-up seats in the boot forward facing for the extra kids. So no bucket seat experience for them. Talk about being pampered these days! And for taking in some of those misty mountain scenes, there are two sun roofs – although we didn’t open them on this trip. In all, there’s a nice and airy feel inside. This Land Rover was very much like its cousin the Range Rover – but somehow wasn’t a Range Rover! n Robin Worsnop in chief executive of Rabbie’s Small Group Tours, based in Edinburgh. The Land Rover Discovery 4 3.0 Sdv6 HSE, automatic with Orkney grey and black leather, otr price £51,195. Test drive vehicle kindly supplied by Pentland Land Rover, Lanark Road, Edinburgh, EH12 1TG. www.pentland.edinburgh.landrover.co.uk
Pentland Land Rover
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FEECHAN ON WINE
Catherine the Grape
As the head of the food and drink team at a Scottish law firm, an invitation to a wine tasting could be something of a busman's holiday for me. However, when BQ gave me the opportunity to sample a selection of fine wines on a dull winter afternoon in the welcoming ambience of Glasgow's Blythswood Square Hotel I thought it seemed churlish to refuse. Seriously, I couldn't wait to explore my inner wine buff.
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Food and drink legal specialist Catherine Feechan savours a French and Spanish favourite from James O’Donnell cellars of Blythswood Square
I am fortunate that my job allows me to work with many dynamic businesses in the food and drink sector and, on occasion, to sample their wonderful produce. While I rarely drink wine in a professional capacity – even allowing for climate change, commercial vineyards in Scotland are still some way off – I have been known to enjoy the odd glass or two after a hard day at work. That said, as I approached the Blythswood Square Hotel I must admit it was with some trepidation. I am not exactly what you would call a connoisseur and I was slightly concerned that my rather limited opinions might not hit the mark for a serious wine review. I'm no Jilly Goolden, but I can usually tell the difference between cheap plonk and a premier cru. However, being a lawyer of few words – unusual, I know – I normally restrict my comments to "I like it" or "that’s terrible"; mostly the former. Fortunately, I was greeted by James O'Donnell, the Blythswood's food and beverages manager, and a fine host who put me at ease. I was soon relaxing in the beautiful Salon Bar overlooking Blythswood Square with a glass in hand and instructions to give my honest opinion on two lovely wines he had selected for me – not too daunting a task. The first wine James offered me was a Joseph Drouhin Mâcon-Villages 2010, which sells in the restaurant at £40 per bottle. This is a lovely fresh and zippy wine, with faint hints of melon and lemon. It's lively and effortless and I could see it going very well with lighter style dishes, maybe even as an aperitif. It's from the Burgundy region of France and you might not
even recognise it as Chardonnay if you weren't told. Fortunately, there isn't a trace of oakiness and it is fresh and very pleasing to the palate. Next came the red wine; Bodegas Campillo Rioja Reserva 2006, at £50 a bottle. This is a smooth and silky wine; well balanced with bright plummy and cherry flavours. It has quite a refreshing finish and would go well with lamb and slow-cooked meat dishes, great for the long winter nights ahead. I can happily recommend both these wines. Despite my initial reservations, my debut as a wine reviewer was so enjoyable that I'm now thinking that in my next life I would happily come back as a food and wine critic. Failing that, I might find myself giving legal advice to Scotland's first commercial vineyard. Châteauneuf-du-Paisley anyone? n Catherine Feechan is a corporate partner at Brodies LLP and leads the food and drink team. She graduated from Glasgow University, qualified in both English and Scots Law, and joined Brodies in 2010. Since then, she has seen a period of continuous growth at Brodies with the opening of offices in Aberdeen and Brussels and the range of accredited specialists increasing to include oil and gas competition law and employee benefits. This year, Brodies was named the UK National/Regional Law Firm of the Year by The Lawyer magazine at its awards in London. Catherine's team advises a wide range of clients in the food and drink sector. With Scottish food and drink exports recently breaking the £1bn barrier and strong future growth predicted, Catherine Feechan aims to make Brodies the adviser of choice for ambitious food and drink businesses in Scotland.
FEECHAN ON WINE
BUSINESS QUARTER |WINTER 11
BUSINESS QUARTER | WINTER 11
silver service shines on scots owners’ watch
Hamilton & Inches is renowned as the silversmith and clock specialist By Appointment to HM The Queen. But the bejewelled George Street, Edinburgh, has shaken off its upper crust image to attract younger, aspirational customers. Kenny Kemp meets its managing director Stephen Paterson
The magic of Christmas in Edinburgh’s George Street never seems to fade. The gift-wrapped Dome, with its fragrant spices and lilies, is now a festive landmark, and the coloured lights and glittering windows stretch along to No 87 and beyond. While Edinburgh has lost many of its home-grown traders – overtaken by the national retail chains – a treasure remains at No 87. The emporium of Hamilton & Inches first opened in Princes Street in 1866. The purple-framed windows are filled with expensive watches and glistening diamond and emerald jewellery and a model steam train set with precious stones weaved around the shelves on a circuit. Stepping inside, the carpeted showroom is an array of glass and oak cabinets and recently-fitted stands for big-name time pieces. It has an ambience of expensive style and hushed reverence.
Stephen Paterson was a callow 18-year-old youth from Helensburgh when he first stepped across the threshold in August 1979. Today he is the managing director of a Scottish business that has navigated its way through tricky times and changes, and he has strong ambitions for the jewellers which still holds its Appointment to the Queen as silversmiths and clock specialists. Firstly, he’s keen to dispel the myth about Hamilton & Inches being too posh for most folks. “There is a perception that we only sell watches and jewellery with a multi-thousand pound price tag,” says Paterson. “That’s not really true. I get huge satisfaction when a 21-year-old comes into the shop looking to buy a gift for a friend. They may have a budget of £70 and might be a bit daunted by the place, but we can make sure they walk out
with a lovely gift of about £50 in an H&I bag, wrapped the same way as a gift for £100,000. “In the run-up to Christmas, Hamilton & Inches does get busier and we do a lot of events. We are very proactive in different launches, including a 19-year-old product designer called Kathrine Pelosi at Edinburgh College of Art, whose silverware has been made by our workshop silversmiths. David Ramsay, our silversmith apprentice, has been involved with this project. “One of my big frustrations with the showroom is that it is filled with wonderful products. Then I meet someone who tells me they’ve often looked in the window, but have been too intimated to step inside. We’re working hard to entice all kinds of people in just to have a look – and perhaps buy.” >>
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Stephen Paterson has spent his whole career in the jewellery business. “I was at school in Helensburgh and into geography, art and rugby – and sport in general,” he says. “Academically, I didn’t really apply myself as well as I should have done.” He considered joining a graphics company in Glasgow, designing whisky labels, but he was sociable and enjoyed meeting people. His parents had gone into Hamilton & Inches to see a silversmithing presentation and his father suggested he should write and try and get a traineeship. “I wrote to Ian Inches, who was the third generation owner at the time,” he says, sitting in his office which doubles as a private viewing room. “His reply was that there was no room in the workshops, but a career in the retail side offers young people great opportunity. “I was offered a job and I started work on August 20 1979.” And here I must declare an interest, because my uncle, Howden Steel, who was one of the clock specialists and worked for more than 40 years in the workshop and showroom, took Paterson under his wing in his formative years. “There were a lot of characters in Hamilton & Inches at the time,” he says. “There was the manufacturing side to the business upstairs, although we were doing more repairs than manufacturing. That’s changed as we have been building up our Scottish silversmithing business. I started in the basement, assisting with the silver repairs administration. We were kept in the basement for a long time. “Howden Steel was fantastic. He taught me a lot and was a gentle man. He was very patient because in my rugby-playing days I was always asking to look at his Scotsman to see if there were any match reports.” Stephen joined Heriot’s FP Rugby Club, playing on the wing. “It was a time when Heriot’s had gone 10% non-former pupils and I was introduced to Fraser Dall, the director of rugby. Heriot’s had won the championship, and the FPs were running six teams, plus the reserves. I was in the fives, the fours, then after a few years I was regular in the seconds and got about 30 games in the first XV.” Playing rugby and having a job in retail wasn’t always easy. But Hamilton & Inches closed at 12:30 on a Saturday and the team bus could
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pick Paterson up from George Street. “I used to get picked up outside the shop in my work suit on a Saturday and taken to places such as Mansfield Park,” he recalls. Hamilton & Inches’ involvement in sport also extended to the repair of the Calcutta Cup in 1988 when it was damaged after a particularly rowdy Scottish victory celebration and, more
recently, the creation of the silverware for the Barclay Scottish Open golf tournament. Paterson learned his trade, checking on the completed work, ensuring the engraving detail was correct, and testing teapots to see they didn’t leak. There were plenty of repairs, considering most upper-crust Edinburgh hotels still used silver-service for afternoon teas. He was eventually “allowed” onto the shop floor at the repairs desk at the back of the showroom. The shop was run by Ian and Betty Inches with the help of Ian Kinnear. But somehow it wasn’t keeping up with the times in retailing. Although founded by Robert Kirk and James Hamilton in the 1860s, Hamilton retired after two years, leaving the company to Robert Inches, and the business remained in the Inches family. They took over No 87 George Street from Brook & Sons, the silversmiths who originally repaired the famous Traprain Law Roman treasure trove found in 1919. Now replicas are crafted by H&I. “It was a fantastic place because it was so diverse; you could be taking in an emerald and diamond ring from a lady and then a silver salver for repair next,” says Paterson. “The customer base was old-school Edinburgh at the time. “In those days, the majority of watches were mechanical and you had to wind them all by hand. Our watchmakers went out and wound the clocks of Edinburgh, including the famous North British Hotel clock, which serves those rushing to Waverley Station. We took all kinds of watches and clocks for repair and we didn’t have a vast selection of new pieces to sell at that time.” Paterson undertook a series of courses in gems and retail jewellery, and eventually became an assistant in the showroom, looking after repairs and helping with sales.
We thought we were good watch suppliers but we didn’t have Rolex, and we managed to secure that agency, then Patek Philippe. Then Cartier. This all took us to a different level
“What I learned was that retail is about attention to detail,” he says. Deidre Inches came into the business with Malcolm Carr and Stephen Paterson was made assistant manager to Archie King in 1985. “Deidre and Malcolm became joint managing director, with Ian Inches moving to chairman,” he recalls. At the end of 1991, Paterson was appointed a director, but with no shareholding position. “At the time, we thought of our service as being the bees’ knees in Edinburgh, but when you went further afield down to London it opened your eyes that Hamilton & Inches still had a fair way to go. In many respects, the business was tired and dated.” There was a shock ahead for the new director. “Then, in 1992, at my first official board meeting, we were introduced to an insolvency
specialist at Dundas & Wilson. I knew nothing about this. It was basically the economic downturn and, with respect, the board weren’t that commercially-minded and there was a problem at the helm. So the company was in trouble and faced the possibility of being taking into administration. I got married to Alice in May 1992 and it was a rather uncertain time in my business career.” Paterson spoke to his father-in-law-to-be, a pragmatic Northern Irish businessman in the roof-tile manufacturing business and he got his accountant to look at the jewellers’ books. “Alice’s father has a great business mind and saw through all the rubbish,” he says. “He was phenomenal in his support in many ways. The damage that might have been done to the goodwill of the business if it had gone into administration is hard to think about.”
Then a white knight, Asprey’s of London, came along and purchased the business. The Inches family still owned the George Street building and the turnover was around £1.2m, with debts of £1.5m. A jeweller has to outlay money for stock and at Hamilton & Inches, this can be 95% purchased and ready for sale. “It was very tricky until Asprey came in and made a transformational difference,” says Paterson. “Asprey put Julia Ogilvy in charge and she added fantastic quality to the whole business. The showroom was refurbished – at a cost of £600,000 – with solid oak cases that were properly done. Julia had been in the marketing department at Garrard, the crown jewellers. Asprey were buying up various luxury businesses, including Garrard, Watches of Switzerland, Mappin & Webb. “Julia came up and she had fantastic >>
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contacts. She had a great sense of style, and worked with the interior designer to really create part of what we have today. Things are always changing in the shop. “It was an exciting time; there was investment in the place. We thought we were good watch suppliers, but we didn’t have Rolex, and we managed to secure that agency, then Patek Philippe. Then Cartier. This all took us to a different level.” The Sultan of Brunei’s brother, Prince Jeffrey, bought Asprey in 1996 and soon after the Sultan discovered that his brother had been funding his overseas investment with state funds and this gave Stephen Paterson the opportunity to become involved in a management buy-out. In 1998, Julia Ogilvy and Stephen Paterson with Malcolm Gillan and Denzil Skinner created the management buy-out. Private individuals helped with the funding, plus Bank of Scotland with a term loan. Paterson says: “It was fantastic. I remember Julia and Denzil were on holiday and there were conference calls and we were in London at the Asprey lawyers. We bought the business and the building for £3.5m. We had a flight booked for 6pm thinking this would be a doddle, but the legal deal took much longer. It was a Friday and it went past and Malcolm and I had to get back up to open the shop for business on the Saturday morning. “We had to get the sleeper back up with our advisers; Ewan Gilchrist and Colin MacNeill from Dickson Minto and others from Bank of Scotland and PwC. We were all having a small celebration in the sleeper bar and I had to be ready to open the doors at 9.30 on the Saturday morning. “We had a clear business plan at the time to build up the quality and standards of a Scottish business. We then bought the London office in 52 Beauchamp Place, which was Annabel Jones. It has added a London side to the business and a location. It’s a great place to have and we’re trying to add some impetus to help it grow – it’s a case of marketing it properly. Our manager in London is Jacquie Drayton, who is exceptional.” Over the years, Julia Ogilvy, Malcolm Gillan and then Denzil Skinner all left the business, so the shareholding group has become smaller. Gavin
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Reed, who was deputy chairman of Scottish & Newcastle, became H&I chairman and guided the business for 12-and-a-half years. He resigned as chairman in April and Peter Lederer, who has run Gleneagles for 28 years, has taken the reins as chairman. Stephen Paterson was rather perturbed about a recent Sunday newspaper article that suggested there had been “blood on the carpet” as the board changes were announced.
“Nothing could be further from the truth,” he says. “I was a bit put out by the reporting of this. We’ve always been very well-mannered in our dealings with people. We’ve steadily built the business up and, personally, I’ve made a lot of close friends amoung our customers.” H&I has brought in Ross Haston, an accountant from Capital Solutions, as finance and commercial director. “He has been phenomenal and has a wealth of experience through working with Texas Instruments, then Linn Hi-Fi. He’s got extensive luxury goods experience and importantly customer service delivery. He looks after the nuts-and-bolt of the finances together with marketing to develop the business.” The board includes Paul Gregory, chairman of oil analysts Wood Mackenzie, and is advised by Max Floydd, of accountancy firm Saffery Champness. For such a prestigious business, the turnover is a modest £6.6m, with profits of £367,000. “We had a very good year when the turnover hit nearly £10m, but that was with some exceptional sales,” he says. “When you have expensive products, a few extra sales can impact of the turnover.” But his company is debt-free having paid off the bank for the buy-out loans. The one fear is the rising cost of gold, which makes everything more expensive. While Paterson wants to entice more young people to come into his shop, he is also dealing with the very top end of jewellery. For example, Hamilton & Inches are only one of two UK jewellers who are stocking Wellendorff gold “rope” jewellery, made in Germany. “It’s like wearing silk against your skin,” says Paterson. “In my view, with 32 years’ experience, I think Wellendorff is the best-made gold jewellery on the market
We are very proud of our watch collections now and we’ve plans to give more room in the showroom for some of the displays. I think they make fantastic heirlooms for collectors
Precision engineering: Stephen Paterson examines the hidden detail of a craftsman-made watch at Hamilton & Inches’ Edinburgh showroom today. It’s artisan craft meeting German precision engineering.” It is expensive; the gold and enamel bracelet comes in at £9,260, while the Brilliance of the Sun bracelet has as a rather breathtaking tag of £16,520. However, their rotating rings which are said to make all your dreams come true with three simple twirls start from a slightly more affordable £2,580. “We stocked Wellendorff for quite a few years and then we gave it a rest,” says Paterson. “We go to the Basel trade fair every year and we’ve been watching what they have been doing and we decided to strike up our relationship again. There are lots of shops that sell jewellery – but we are a jewellers. The reason for that is that we offer advice and we do things correctly. The biggest thing is trust. We are basically guaranteeing that trust.” While the jewellery is stunning, watches are
now approaching 50% of H&I’s turnover, with brands such as Patek Philippe, Omega, Cartier and Rolex. “We’re very proud of our watch collections now and we’ve plans to give more room in the showroom for some of the displays. I think they make fantastic heirlooms for collectors.” Paterson is also pleased that Scottish silversmithing, under the direction of master silversmith Jon Hunt, has become a special aspect. “It’s our unique selling point that we have ten craftsmen on the three floors above the shop,” he says. “The order book for the silversmiths is very healthy with a number of special commissions.” The craftsmen are working in silver and crystalware for Johnnie Walker, on a special whisky casket to commemorate the Queen’s Diamond Jubilee in June 2012.
Hamilton & Inches has adapted, survived and flourished – but it must continue to look at its market as the recession makes high-value discretionary spending much harder for retailers. Paterson has said he understands the credit crunch has changed people’s view of jewellery. “In 2008, people who owned businesses were letting people go, and they felt that they shouldn’t be coming in and spending money. We’ve worked hard to show that it is about value and quality. I believe jewellery is made to be worn and not locked away and only brought out for red-letter days. We never forget that people are bringing their emotions through our door; it’s about love, joy, excitement and hope. “Our job is to respect this and make sure the customer gets the best advice as well as the best quality.”n
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nursing the nation’s cuts
Ann Rushforth is one of Scotland’s leading women entrepreneurs. But after selling a slice of her business in March she has gone back to school, is concentrating on her nursing-led occupational health, and is helping her family’s blossoming enterprises. Kenny Kemp had a consultation with her in Dumbarton BUSINESS QUARTER | WINTER 11
There are few professions where you see human life entering our harsh world. Being a qualified midwife allows a person to experience the intense pain and the unalloyed joy of childbirth. Isn’t it amazing that at least two of Scotland’s leading women entrepreneurs have a nursing background – Ann Gloag, as a burns unit sister, and Ann Rushforth as a Royal College of Nursing-qualified midwife. Not really strange at all, says Ann Rushforth, who sees parallels with nursing and business. A good nurse needs to be efficient, disciplined and have the ability to communicate concisely: all vital attributes for business. And there is also the ability to respond quickly to changing circumstances – especially with life-threatening consequences. “You can’t go back and say, ‘We’ll leave that until tomorrow,’” says Rushforth. “If there are things that require attention, they have to get done ‘today’. When you’re making decisions, you can’t put things aside and do it later. You have to make the best of the situation.” While Ann is proud of her achievements building ScotNursing into a successful UK company, she is defined by her experiences as a nurse and midwife, and although she still practices in case management and occupational health, she is pursuing a degree in occupational health at Robert Gordon University in Aberdeen. “Although I’ve worked in this sector for 25 years, and a big part of it has been occupational health, I haven’t had the formal qualifications,” she explains about her part-time return to the classroom. Today her office is in the large upstairs room in the rambling Victorian building at Crosslet House in Dumbarton, which is home to Halo Nurseries – owned and run by her daughter Mhairi – on the ground floor. She can hear the shrieks of laughter from the children outside on the lawn, while directly below her office is the baby room where a seven-week old baby is the latest to be looked after by the child-minding staff. In 1987, Ann started her own nursing and care company with the support of a government scheme and a £1,000 bank overdraft. She set up the firm primarily because she couldn’t get the part-time midwifery work that would allow
her to look after three young children. “When I started the business I had a one-year-old, a two-year-old and a four-yearold,” she recalls. “On occasions my youngest would play in the cardboard uniform box under the table.” ScotNursing Ltd and the associated companies was built up to a turnover of £16m and such was the return that Rushforth was able to wrest full control back from Aberdeen Murray Johnstone Private Equity, who had invested in the early days. While ScotNursing remains the flagship brand, the company Health and Lifecare Options had two sides to the business – the care-at-home side and the nursing side for the provision of qualified nurses. “I sold half of my business in March to Allied Healthcare for the long-term care at home,” she says. “This is carers at home who provide domiciliary care. I wouldn’t want to separate a company again, it was a bit like separating Siamese twins. You don’t realise how interlocking everything is. There were IT systems, finances, files and even emails. It was difficult with the handover with some staff who had been with me for a long time. It was making sure that all the things were happening properly.” She was helped in the £2.5m deal by Mary Campbell and the team from corporate advisory firm BLAS, whom Rushforth says was “fantastic”. The sale of the care side came as the industry has had two clouds overhead in the last 12 months, not unrelated in some ways. The collapse of the care homes operator Southern Cross, which was responsible for the day-to-day welfare of more than 30,000 elderly and infirm people, and the Government cut in funding to local councils, which has had a severe impact on social care budgets. The
fallout from Southern Cross has no direct bearing on Rushford’s firm – however, she has had care contracts with a number of local authorities who were affected. “It’s difficult because most of the contracts we had were with local authorities and they were looking for savings,” she says. “They want the same for less. Initially, we were providing the care services at less cost than the councils’ in-house services. So, for them to be looking for 5% savings was difficult; it just can’t be done. The only solution for us was selling it to a bigger company which gives the economies of scale.” Rushforth is diplomatic but concedes that there are difficulties when personal care is labour-intensive, requiring one-to-one contact time with each client and not always enough time or travel time allocated to the private sector contracts – plus many of the professional care workers earn little more than the minimum wage. And while she anticipates further consolidation in the care home industry, she remains fully involved in the remaining half of the company. “We still provide qualified nurses at home for terminal and intensive care,” she explains. “Complex packages at home for people with things like tracheostomy and complex needs. This is still nursing-led.” The company, which operates from Dumfries and Galloway to Shetland, has its own banks of nurses and doctors and can put together a number of packages for people with illnesses and disabilities, which allows them to stay at home. This can be funded either privately, by employers, or by the health board, with insurance often covering for the terminally ill. “Some insurance companies allow you to have private homecare by privately qualified nurses as part of the package >>
I wouldn’t want to separate a company again, it was a bit like separating Siamese twins. You don’t realise how interlocking everything is. There were IT systems, finances, files and even emails
BUSINESS QUARTER |WINTER 11
ENTREPRENEUR after surgery,” she says. “We are recruiting nurses, doctors and all the professionals allied to medicine, and we cover the whole of Scotland from our head office in Dumbarton. We still provide nurses to all the hospitals and prisons and nurses to courts across the country. For example, we’ve a nurse at Glasgow Sheriff Court all day on Monday – that’s one of the busiest courts in Europe. If anyone has been in custody over the weekend and is unwell, then they will get help from our nurses. “We are working on lots of occupational health contracts at the moment – what we are trying to do is give a very cost-effective service which gives companies what they need and delivers benefits to staff. It’s a feelgood factor for staff knowing they are being looked after as well.” Better health in the workplace, which includes screening, means reduced sickness time and a much more productive workforce. “If you pick up people in basic screening for high cholesterol and blood pressure, then this can made a difference in terms of strokes and heart attacks,” she says. “It’s about changing lifestyle and getting the life balance.” Ultimately, it’s about keeping good staff! She is even looking at private doctors making house calls – something which has been disappearing as the NHS has moved toward its NHS24 model of patient care. “It’s about giving people the choice of what they want to do – a bit like dental care,” she says. “Why not? Some people might not want to sit in a minor injuries clinic for three hours and would rather pay to have someone come out and see them and check them over.” Isn’t there resistance to some of these private initiatives in healthcare? “When people talk about contacting out to the private sector, like nursing provision, some say they want to keep it in the public sector. But the public sector is an artificial market that has been created that isn’t as accountable because it’s managed by different tiers. If it’s our money, we just want it spent wisely. “People might not be working for a council but a private provider still needs the people on the ground and you lose all the layer and layers of bureaucracy within different sectors. I don’t have any problem with the private sector
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and the voluntary sector being used effectively working together to reduce costs, increase quality and choice. Why wouldn’t you?” So does Ann Rushforth get a lot of requests to pass on her knowledge to the NHS? “I’m in the private sector and I have been in the past invited to talk about healthcare in Scotland,” she says. “I am interested in practising innovation. The one thing that frustrates me is that we don’t learn from other sectors and use what works.” She cites the airline booking and fee system which marries up times and prices based on availability and peaks and troughs in demand. “I’ve been astonished by the amount of money spent on software in the health service that doesn’t actually work. It’s so frustrating, it’s not someone else’s money; it’s our money. “British Airways and easyJet have a booking system that’s state-of-the-art and it strikes me that as long as you deal with all the confidentiality, why can’t you use similar systems so you can book appointments either by phone or online.” Rushforth agrees that individual health boards are doing this now and using texts to remind patients when an appointment is due. She also suggests a nominal fee that might be returned once people attend, which would discourage DNA (Did Not Attends). “I still think the best managers within the health service are good managers who actually have a background in one of the medical professions. That’s because they understand the complexities. That’s not to say that there aren’t some good managers who don’t have that background – but I think it is better if you do have a medical or nursing understanding.” She says there is a massive paper chase, filling out documents, and while professionals must be accountable, there needs to be an element of trust and common sense. “Yes, there should be an audit trail, but not at the detriment of care – and there is a middle-line to take on this,” she argues. Now that Rushforth has sold half of her business she is also devoting time to helping Mhairi, now 26, with the expansion of her childcare and nurseries business. Halo is already looking after more than 400 babies and toddlers and employs 50 staff, creating nearly £1m in turnover.
“In these difficult times it is more challenging and to be able to give her that support is great,” she says proudly. Mhairi, who was named outstanding student of the year at the Hunter Centre for Entrepreneurship when she graduated, obviously has plenty of her mother’s DNA. They share the Rushforth sense of humour and when a Harry Potter ringtone goes off, Ann explains that her own mobile fell into the water on a boating trip and she’s borrowed Mhairi’s old one. “I think I should get the ring change to a Casualty theme,” she says, “but I don’t know how to do it!” The nursery project involves the roll-out of a number of state-of-the-art nurseries in the West of Scotland. When Ann Rushforth built ScotNursing she was able to move into a modern office building at Old Kirkpatrick. After the sale in March, the building was far too big for them or Allied, so it has been sold to SubSea 7, the oil and gas service business, which was expanding in the North Sea. “We’re looking to build something smaller for our company with a new nursery alongside,” she says. The lease runs out on Crosslet House in a few years and so the plans is to have a set of four, £1m custom-built nurseries in Helensburgh, Dumbarton, Bearsden and Milngavie. “I am happy to help because it is not easy. Cash flow is always challenging. The banks are not able to work with companies the same way that they were in the past. That makes it more difficult.” Rushforth is also helping her son Stuart with his commercial landscaping business, but she concedes it is very hard for young people in Dunbartonshire finding work and making a living out of small business. Ann was born in the Haldane council estate in Balloch, and lost her father, Andrew Mackay, when she was only 15. Her first job was working in the labs of the British Silk dyeing factory on the Loch Lomond shores site, before going on to study nursing in Glasgow. Her three brothers have all done well with engineering careers, while her sister is a geo-technical engineer. “My mother and father were very clever,” she says. “He came down from the North
Cash flow is always challenging. The banks are not able to work with companies the same way that they were in the past. That makes it more difficult and served his time as a pattern-maker. He worked in Yarrows and served his time with Denny’s shipyard in Dumbarton. My mum excelled in maths but had to leave school at 14 to contribute at home.” Ann sees part of her job as mentoring her own family. She has been involved with Prince’s Youth Business Trust Accelerator Fund but with the sale of the business she has not had as much time to devote to this. She’s disappointed that more money is not being put into capital projects to stimulate the local economy. For example, she says the shelving of the Glasgow Airport rail link was not a wise move. “I think it is short-sighted. Of course you need prudent budgeting but we need the public sector to develop the infrastructure, which can then help the private sector with new enterprises.” She was also a board member of Scottish Enterprise Dunbartonshire before it was shelved. “I was privileged to work for the board for
seven years – and I think we did a lot of important work and it was stimulating for the local economy,” she says. She is also a member of the Leading Women Entrepreneurs of the World. However, she says that the £100m Lomondgate – between Dumbarton and Alexandra on the A82, which had its foundation laid in September – is the kind of opportunity which is desperately needed. “It’s in the West and the gateway to the Highlands. It is a fantastic site because of where it is and it’s also easily accessible to the airport. This is where we are going to have our new head office and our Dumbarton Halo nursery.” The site is already the base of BBC’s River City, which has been given a reprieved by the corporation – all better news for West Dunbartonshire, says Ann. She remains a staunch Labour party member and was encouraged to stand as a local councillor in West Dunbartonshire. In 2007, she stood for the ward that she was born in
on the shores of Loch Lomond, but she says, “Unfortunately, it was a marginal seat and there was a yellow tide of SNP and it was unlikely that I would win, but when I got to the count I actually wanted to be elected to make a difference.” She hasn’t ruled out standing for office once again, and was in the shortlist for the Westminster seat of John McFall in 2010. She’s not afraid to stick up for what she sees as injustice and reckons Wendy Alexander, the former Scottish Labour leader, was given an unfairly rough ride by the media when she was cast aside over donations from the Channel Islands while she also expressed sympathy for Gordon Brown whom she says was pilloried because his personality didn’t come across in the media. She was also an admirer of Tony Blair who came up to do a BBC Question Time from Stirling and showed real compassion and knowledge that often didn’t come across. “There are a lot of politicians in it for the right reasons but when they all become tarnished with expenses scandals and the likes, it takes the focus away from what is really important,” she says. “The problem I have is that we haven’t had the right Labour leader for a while. John Smith was the reason I joined the Labour Party; he was a man of great integrity.” While she is deeply serious in her concern for Scotland, her self-deprecating humour and her ability to have a hearty laugh is never far from the surface. In 2007, when she went up to collect her MBE from the Prince of Wales at Buckingham Palace, she spotted Tom Hunter, then a fellow Entrepreneurial Exchange board member, preparing for his knighthood and they both had a laugh about their humble Scottish beginnings and their pathway to success. “Tom’s dad was there, and my mum Annie,” she says with satisfaction. “We need more women to say they can do it. That’s why I’m happy to put myself forward; to show women who have children that it is possible to run a business – and enjoy their families. Having a work-life balance that, while hectic, does give fulfilment in both personal and business life. Men take this all for granted – so why should we apologise for wanting both too?” n
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individual plots the future Sandy Adam began life on a Morayshire farm, but spread his wings into house-building. He has built Springfield Properties into one of Scotland’s fastest-growing and most respected house builders – with a true commitment to making homes fit for all. He talks to Kenny Kemp about what is important to him Everyone in Scotland should have a decent place to live. That’s the kind of statement you might expect from a Big Issue seller, an earnest anti-capitalist protester camped out in St Andrew Square, or a headline-seeking MSP. But Sandy Adam, chairman of Springfield Properties, is an entrepreneurial housebuilder who not only talks the talk, but is doing something positive about it. This gently-spoken Morayshire man, who is 55, has grown his businesses in Scotland to a turnover of £40m, creating both value-formoney homes and jobs. His company is building hundreds of award-winning, affordable homes that are of high quality and recognised as decent places to live. “I’m not really a house builder,” he says. “I’m trained in agriculture, but I know how to run companies. I’m interested in growth. My question is; how far can this company go and what can we grow it to? That applies to all the companies in the Springfield group. Good people seem to like working with me – I try not to interfere too much. People are capable of doing a lot more than they think they can if you just tell them they can do it – and encourage them.” So when he says everyone deserves a good home, it’s not because he’s joined the Militant Tendency, it’s his viewpoint and method of working. Springfield Properties might not be one of the largest mass-market builder but it has built a strong reputation with
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housing associations as well as with private home owners. So, what are the qualities of a good new home in Scotland? “The first thing is location,” says Adam who is sitting in the board room of his new Larbert office. “Then it’s the attractiveness of the street scene. Then it’s the design and the space in the house and the quality of the build. Then it’s the quality of the after-sales. You have to be good at all of these things. “The public are right to be demanding because this is the largest purchase they are going to make – or are ever going to make. They are going to be staying in it every day – and we should give them a good quality product.” He is committed to quality, whether it is private or local authority. “If you walked into some of the housing we are building for local authorities right now, you would be amazed by the standard. In some cases, they are a far higher standard than we build for private clients, because of the specification that we are required to build homes with special needs. And you could not tell the difference between a council house and a private house. On some estates they are mixed together, and, unless you specifically knew, you could not tell the difference.” Sandy Adam was born in Elgin and raised on a farm on the south side of town. It was a mixed farm of cattle and crops, a fertile area, and as
he grew up he learned how to undertake the farming chores, including driving a tractor. It instilled in him a practical work ethic of getting things done – and fixing things when they didn’t work. His grandfather also owned a local market garden called Springfield, which had been established in 1956, long before the arrival of Bart Simpson and his family! Sandy went to New Elgin Primary School, was sent to Strathallan in Perthshire, and took an HND in agriculture at Aberdeen College. After a gap year touring the world and working on farms in New Zealand, he returned to Morayshire in 1979 and moved into a small rented farm of 150 acres in the Elgin area. After three years, with the help of his family, he bought a 700-acre upland farm, just outside Craigellachie, near the river Spey. It is a beautiful hillside spot in one of the most fertile parts of Scotland, but taking on the debt for the farm proved to be a massive burden for Sandy Adam, an early lesson for later years. The interest rates were punishing and he struggled for many years. “We didn’t have a lot of excess cash to spend or to live on,” he says. “It was a mixed farm of cattle, sheep and crops. It was a tough time.” He married Anne, then a teacher, in 1983 and they started a family. “Gradually, we started to move into property and we sold a couple of sites on the farm,” he says. “I enjoyed the experience of putting it through local planning with Moray Council.
I was always interested in quality and giving people space to live – and value for money. The density of our housing is much less than with the major builders
We sold the sites, then our market garden became uneconomic and ceased operating. A new Asda store opened up nearby and the cost of goods from overseas was rising. The 10-acre site was zoned for housing and we tried to sell it to a local builder – but it didn’t work.” So Adam decided to develop it himself – and this became the foundation of Springfield Properties. “I was always working on my own – my father, Duncan Adam, was a very strong character, like myself, but we would never have worked in the same business. It was better that we had separate businesses.” There was a need for a lot of new homes in Moray – which was the heartland of the Speyside whisky industry; home to the air bases at Lossiemouth and Kinloss, and with a rich farming pedigree which supported a number of food and drinks-based companies. So Adam built 100 homes on the 10-acre site – and sold them all. He says: “I enjoyed it and it seemed to be successful, so we started buying other bits of land. After a few years, I was spending most of my time running around architects’ firms, getting plans and I decided it was time to take on an architect myself and open an office in Elgin.” In 1996, he took John Main, a newlygraduated architect, and between the two they built Springfield Properties up to about 300 employees with a turnover of £20m. “I was always interested in quality and giving people space to live – and value for money,” says Adam. “The density of our housing on plots is much less than with the major listed house builders. We did various projects but all in the Moray area. Through the first ten years we went through a booming time in the house building industry in Scotland. We were very successful.” Then, in October 2006, Adam and Main sensed that something was amiss in the wider markets. “Our strategy had been ‘Grow, grow, grow!’ We decided that there was a bubble forming in the property market, there were various signs that we could tell this was happening.” When they announced they were releasing another phase, people were queuing for >>
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ENTREPRENEUR three days to buy their houses and blocks of flats were selling out within an hour. It was an ominous sign for a canny farmer who had once been burdened with debt. “Some of our customers were able to get 125% mortgages,” he recalls. “The price of development land was spiralling out of control and banks were throwing money at anything that was property related.” Springfield Properties was banking with HBOS, who had a massive exposure to property across the UK and they were desperately keen to keep lending to Adam’s business. “Alarm bells were ringing and we decided to have a change of strategy,” he says. “We tried to put the business on a footing that would survive the inevitable downturn. But we could never have foreseen just how deep and long that downturn would be.” Springfield stopped buying expensive land; sold a third of its existing land bank, and built homes to order. “We tied up missives tighter and we ran the company for cash,” he says. “Fairly quickly we were in a cash-positive situation. One of the other things we did was move into affordable housing in a big way. It was government money and we could tie up longer-term contracts.” Adam was even accused by his bank manager of not borrowing much money. “I thought it was strange and I remember replying: ‘When I want to borrow, you won’t want to lend.’ That’s the situation we have now.” What does he put his foresight down to? “I had seen a crash before in the early 1990s. I was involved in the property market at the time and I saw how difficult it was then. And I remembered how hard it was when inflation was in double-figures. Since our farming days, when we had five really hard years, I’ve always been cautious.” Springfield Properties had never borrowed large amounts from the banks. Once the company was on this better footing, not much happened throughout early 2007. “However, we began to look a bit foolish,” he says. “And we began to wonder if we had done the right thing. We stood firm though and conserved our cash. The crisis with Northern Rock, then with Lehman Brothers’
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The motor car industry has moved on a lot since Henry Ford said you can have any colour as long as it’s black. The car industry has changed but not the house industry
collapse in 2008 led to property prices stabilising, then falling, and the terrible situation with HBOS, Lloyds and RBS and government bailout for the banks. We found ourselves in a very unusual position in the Scottish house building industry in that our business was relatively safe and not beholden to the banks.” Three years into the crash, Springfield Properties turnover was still growing because of all the affordable housing contracts. It was the fastest-growing independent Scottish house builder and in May 2011 announced results of £40m, up from £34m, and profits of £2.5m, up from £1.8m. “Because we had moved into affordable housing early, housing associations were comfortable dealing with us,” he says. “We got more and more projects and this helped our turnover grow. We began to realise that with the tightening of government funding, affordable housing was an easy target for cuts. A lot of the funding on the housing has dried up. If we wanted to protect the size of our business, we couldn’t afford to rely anymore on affordable housing. We needed another strategy before the contracts ran out, so we decided to spread our geographical area.” In January 2010, John Main, still only 37, announced his decision to leave and start up
his own company, with Sandy Adam expressing regret at his departure. Springfield Properties took on Sandy Anderson, who was the former managing director and chairman of Bett Homes. He was a highly-regarded housing professional who had grown Bett Homes from 200 to 1,500 houses a year. He was appointed managing director in February 2010, with the remit to grow the company in Central Scotland from a rented office in Stirling. Springfield Properties, now with finance from HSBC, managed to secure around half-adozen sites in Central Scotland – including some in Edinburgh, Broxburn, West Linton, and Blairgowrie, and then came an opportunity that was too hard to resist. “We were going well and then Redrow announced in the newspapers that they were planning to sell their Scottish division,” says Adam. “At first I thought it was going to be too big for us, but encouraged by the directors we put in a bid which was structured, so we didn’t have to borrow any more at all.” The offer was for £49m, with a £5m deposit, and the rest payable when the houses were sold. This was attractive to Redrow, who didn’t want to sell to any of their major UK competitors, and it gave Springfield Properties a bigger footprint in Central Scotland. “We were able to tie up a deal and we’re now working on eight Redrow sites in Scotland, six in the west and two in the east – a total of 831 houses,” says Adam. The amalgamation has meant a few redundancies and Springfield is working hard to instil its own ways of working. “We believe we should build the house that the customer wants – not the customer having to buy what we want to produce,” says Adam. “This is basic business for us. The motor car industry has moved on a lot since Henry Ford said you can have any colour as long as it’s black. The car industry has changed, but not the house-building industry. The choice should be same for a house. We’re building bespoke houses.” Springfield is aiming to build 400-500 a year with every one being different. “We always like to be a step ahead of building control regulations. On energy efficiency and carbon footprint, we have been looking in-house at this. Our team has decided that
air-source heat pumps and under-floor heating is the best way to go.” An air source heat pump – or ASHP – is like an air-condition unit on the side of the house and works in the opposite way to a refrigerator, extracting ambient heat from the outside air, even when the temperature is less than -20°C. Adam says: “The housing associations have really embraced this technology; one association in Elgin has 250 houses, all with air source heat pumps. But the best way to conserve heat is to ensure that there is enough insulation. “The houses are mainly timber-framed – drier Canadian and Scandinavian wood is shipped in because it is better for housing than wet Scottish pine. An old ‘tatty’ shed on the farm now makes the timber kits, employing four people. That land has been zoned for housing, so we’ve bought another ‘tatty’ shed.” What is the biggest issue for Springfield Properties? “The main issue is our customers getting mortgages. The UK’s financial guys haven’t got themselves sorted out yet. The sooner that happens, the sooner we can get back to normal. We have huge shortages of houses in Scotland.” The Scottish Government aims to increase the number of new homes built in Scotland each year to 35,000 by 2015. Last year the figure for the private sector was a meagre 11,000, which means there is a massive amount of pent-up demand. Housing production in Scotland is now at its lowest level since 1931. “We have been one of the pioneers of the Resonance scheme, which was developed by Retties in Edinburgh. It provides affordable housing with a model where we will sell houses to the housing association at a reduced price; they keep a percentage of the homes in perpetuity and we have the right to buy the rest of them back at the same price any time within 10 years. From a housing association’s point of view, they get an affordable house for up to 10 years for a client and they collect the rent, which pays the interest on their loan. The loan is repaid when Springfield buys back the property.” This scheme has recently won a UK award for Springfield, Retties and Dunedin Canmore from the Chartered Institute of Housing for
excellence in housing finance. In the last financial year, Springfield’s turnover has been 60-70% through affordable housing for housing associations. “The other difficulty we have in Scotland is planning,” says Adam. “There has been a change in the last few years from the most go-ahead councils, who have changed the outlook of their planners from ‘control and restrict’ and more to ‘encourage and enable’. We now see huge differences between some planning authorities and others.” According to Sandy Adam, Edinburgh City Council, East Lothian and Highland are among the ‘good’ guys, and all pro-active in encouraging development. “They tend to take the hurdle out of your way, instead of putting them in your way. I’m in the position where I can invest my money in any area of Scotland that I want. I’m more encouraged to go to areas where the planning authorities are more encouraging.” But that’s not necessarily the areas that need the houses. The Springfield board includes the two Sandys; Sandy Adam and Sandy Anderson, who was awarded an OBE in 2004 for services to construction in Scotland. Finance director Innes Smith, a former KPMG-trained accountant who is from Moray, has been with the firm for seven years.
“He jealously guards the company’s money, which is exactly what you want a finance director to do,” says Adam. Bob MacLeod is in charge of all the civil engineering works. “Everything above the ground is a totally known cost – you can quantify it,” says Adam. “Anything under the ground is an unknown quantity, so an essential aspect of our business is civil engineering with sewers and roads. Bob’s a key member of the team.” Also on the board is Sandy’s brother, James and his wife Anne, who represent the family shareholders and two non executive directors, Roger Eddie, a former HBOS banker and now with HSBC, and Matthew Benson from Retties. Another key figure for Springfield’s is Colin Murchison, formerly with Redrow, who has become the commercial director, although this is not a board position. Springfield Properties employs 250 directly, with up to 600 people including contractors, many of them regulars. For example, Elgin plumber Neil Hadden began working with Springfield in the 1990s and his business has grown alongside it. Adam is an on-the-go serial entrepreneur with 14 other business interests. While he’s given up farming – and Springfield Properties is by far his largest company – he has invested in a variety of other companies and their people. He has an asbestos surveying company called Northern Asbestos Services and run by Mark Watkins. There is also Planet BBK, a bathroom retailer in Aberdeen and Elgin, which was going through a tough time. He also has two companies in Berlin, Spree Properties and Elgin Properties. Sandy Adam relaxes with a game of golf on Sunday mornings at Elgin & Moray Golf Club. “Golf is a game for everybody in Scotland, so some of my joiners and labourer are members of the golf club as well,” he says. Elgin and Moray has a distinct local identity with strong networks so when he goes to a business dinner he meets senior figures from Walkers of Aberlour, Johnstons of Elgin, Baxters of Fochabers and Gordon & MacPhail, all well-run family businesses, embedded in the area. Springfield Properties is in this mould, but with expansion in the Central Belt, more people are likely to hear about the ethos and values of Sandy Adam. n
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BIT OF A CHAT
with Jock Yuler >> Job creators in Largs Chris and Colin Weir, the lucky blighters who scooped £161m in the EuroMillions in July, have given £1m to the SNP. Let’s hope the Weir’s can use some of that money to help some of the local youngsters in Largs where they live get a foot on the employment ladder. Now, that would be an exceedingly good cause.
Foundation, who have all been inducted into the Entrepreneurial Exchange Hall of Fame. It means they’ll get their pictures taken – and perhaps the newly-reopened Scottish Portrait Gallery will display their famous faces. Well done also to Colin Robertson, chief executive of Alexander Dennis, the bus and coach makers in Falkirk, who was named Entrepreneur of the Year at the annual awards dinner. Since taking the reins at Alexander Dennis in 2007 Robertson has steered the company through the downturn with its UK market share almost doubling to over 50%, turnover increasing to £360m, and profits are set to rise significantly this year and next. I even saw their newest buses in Hong Kong a few weeks ago and felt a tinge of pride. I agree with the fair-minded Jim Boyle, awards judge and Deloitte fella, when he says: “Colin has demonstrated fantastic entrepreneurial instinct in his ability to identify and capitalise on an opportunity in a tough economic climate.” Here! Here! Also awarded on the night was Emerging Entrepreneur of the Year, Keith Wight, founder and chief executive of sensor design and manufacturing company SST Sensing. His business is certainly one I will be telling the BQ Scotland editor more about.
>> Help, I’m under attack! Sounds good: Ivor Tiefenbrun
>> The all of fame It’s over to the sparkly Hilton ballroom in Glasgow and hearty congratulations to Ivor Tiefenbrun, the brilliant founder of Linn Products; and also to James Milne, founder of the Balmoral Group, in Aberdeen, and dear Gerald and Vera Weisfeld, founders of What Everyone Wants and the Weisfeld
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Is this a real threat – or are we being panicked? Is the Office of Cyber Security doing enough to protect small businesses? Dave Waterson at Sentrybay, says: “Basic anti-virus software is struggling to cope in the battle against cybercrime. In fact, the vast majority of companies in the UK already have comprehensive anti-virus software and firewalls in place, but still the
attacks are getting through these relatively ineffective measures.” Virus detection rates are steadily reducing due to the rising use by cybercrime syndicates of virus attack kits, polymorphic (automatically changing) viruses, and the hiring of botnets to spread and hide the source of the key loggers. Standard defences are no longer enough, he says.
>> Jim’s Good to Great The Economist asks why Jim Collins’s books have been at the top of the management best-seller list. Answer: Because they are good, well-written and packed with great info. I must say I’ve had a secret admiration for Mr Collins books since I read Built To Last in the late 1990s. I haven’t read Great By Choice, his new tome, so anyone thinking of a pressie for me can put that on the list. I also admire some of his business buzzwords – which include having “big hair audacious goals”, the “hedgehog concept”, the “flywheel effect” and my favourite – the “level-five leader”, who is all about subsuming his ego for the greater benefit of the business. There’s a neat little book out called Charisma, by Andrew Leigh (Pearson, £10.99), which actually talks about how to make a lasting impression – without putting the boot in, I imagine. I love the bit about personal grooming which advises us to ensure that our breath is fresh, hair is washed (if you have any), teeth are clean, there is no hair coming out of your nose or ears, your nails are clean, and there is no evidence of dandruff on your collar. And one that they missed, putting on clean shirt and underwear and getting to work on time!
>> And a parting shot on… another war Since 2001, the West has spent a massive amount on Afghanistan – the US alone has forked out $440bn. By New Year 2012, 400 British soldiers will have died in the conflict. What a sad waste.
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8 Thrive for Energy and Services. Royal Scots Club, Edinburgh, 5pm7pm. After-work drinks with Vattenfall and Aquamarine Power. Contact: Anna, 0131 526 3104 or firstname.lastname@example.org 13 Thrive for Technology & Services. Corinthian Club, Glasgow. 5pm7pm After-work drinks with Linn Products and Funky Moves. Contact: Anna, 0131 526 3104 or email@example.com 14 Edinburgh Chamber of Commerce: New members evening. Capital House, Festival Square, Edinburgh. 15 Power Lunch Club with Michelle Rodger CCO and Amanda Boyle, CEO of Bloom VC. bto Solicitors, 48 St. Vincent Street Glasgow G2 5HS. 12:00noon-02:00pm. Contact firstname.lastname@example.org 19 Thrive for Property and Services, Royal Scots Club, Edinburgh. 12noon-2pm Lunch with Miller Developments and Balfour Beatty. Contact: Ola, 0131 526 3104 or email@example.com
12 Power Lunch Club with TBC. HSBC Corporate, Hobart House, Hanover Street, Edinburgh, EH2 1EL. 12noon-02:00pm. Contact firstname.lastname@example.org 13 Thrive for Services, Royal Scots Club, Edinburgh. 8am-10am. Breakfast with House of Frasers/Jenners. Contact: Anna, 0131 526 3104 or email@example.com 17 National Association of Pension Funds, Trustee conference 2012, Ernst & Young, George Square, Glasgow. Speaker: Greg McClymont, Shadow Pensions Minister. Contact: napf.co.uk 17 Thrive for Property, Royal Scots Club, Edinburgh. 8am-10am. Breakfast with Weslo Housing Management Contact: Ola, 0131 526 3104 or firstname.lastname@example.org 19 Power Lunch Club with John Anderson, chief executive of Entrepreneurial Exchange. bto Solicitors, 48 St. Vincent Street Glasgow G2 5HS. 12noon-2pm. Contact email@example.com 19 Celtic Connections. The award-winning music festival that runs until 5 February in Glasgow, with hundreds of events, including the Average White Band, Ally Bain, Jerry Douglas, An Moura and a tribute to Gerry Rafferty. www.celticconnections.com 20 Thrive for Services. Corinthian Club, Glasgow 8am-10am. Breakfast with G1 Group and Allied Vehicles Contact: Ola, 0131 526 3104 or firstname.lastname@example.org 25 Thrive for Services. Scotch Malt Whisky Society, Edinburgh. 12noon-2pm Lunch with Company Creators and PSYBT. Contact: Anna, 0131 526 3104 or email@example.com 27 Thrive for Energy. Marriot Dalmahoy, Kirknewton, Edinburgh. 8am-10am. Breakfast with McCraig Renewables. Contact: Amanda, 0131 526 3104 or firstname.lastname@example.org 27 Thrive for Property. Corinthian Club, Glasgow. 12noon-2pm. Lunch with Ecosse Regeneration and British Waterways. Contact: Ola, 0131 526 3104 or email@example.com 31-1 FEBRUARY Offshore Wind and Supply Chain Conference and Exhibition 2012. 500 delegates will attend Scotland’s biggest offshore wind event. AECC, Aberdeen. 31 West Lothian Chamber of Commerce: Social Media for Business. West Lothian Civic Centre, Livingston, 9am-12. Contact: bgatewary.com/events
1 Thrive for Services. Blythswood Square Hotel, Glasgow. 12noon-2pm Lunch with Scottish Premier League. Contact: Ola, 0131 526 3104 or firstname.lastname@example.org
BUSINESS QUARTER | WINTER 11
2 Power Lunch Club with Dave Bradley, CEO of Quality Scotland. HSBC Corporate, Hobart House, Hanover Street, Edinburgh, EH2 1EL. 12:00noon-02:00pm. Contact email@example.com 3 February Scottish Oil Club, 34th annual event at Sheraton Grand Hotel and Spa, Edinburgh. 7 The Hospitality Industry Trust (HIT) Scotland. Conference looking at tourism and the Olympics. Glasgow Science Centre. Katherine Grainger, Olympic rower, will speak at the conference. 7 Thrive for Services. Royal Scots Club, Edinburgh. 8am-10am. Breakfast Event. Contact: Anna, 0131 526 3104 or firstname.lastname@example.org 10 Thrive for Technology. The Corinthian Club, Glasgow. 8.30am10.30am Breakfast Event. Contact: Anna, 0131 526 3104 or email@example.com 14 Thrive for Property. Royal Scots Club, Edinburgh. 8am-10am Breakfast Event Contact: Ola, 0131 526 3104 or firstname.lastname@example.org 15 Thrive for Services. Scotch Malt Whisky Society, Edinburgh. 12noon2pm Lunch with Royal Botanic Garden, Edinburgh. Contact: Anna, 0131 526 3104 or email@example.com 16 Power Lunch Club with Willie Young, Chairman of Brechin Tindal Oatts. bto Solicitors, 48 St. Vincent Street Glasgow G2 5HS. 12noon2:00pm. Contactinfor@powerlunchclub.co.uk 20 Thrive Round Table. Discussion: Raising Finance. Royal Scots Club, Edinburgh. 5pm-7pm Contact: Amanda, 0131 526 3104 or firstname.lastname@example.org 22 Thrive for Property. Blythswood Square Hotel, Glasgow. 12noon-2pm. Lunch with BAM Properties Contact: Ola, 0131 526 3104 or email@example.com 24 Thrive for Energy. Marriot Dalmahoy, Kirknewton, Edinburgh, 8am-10am. Breakfast with Pelamis Wave Power. Contact: Amanda, 0131 526 3104 or firstname.lastname@example.org 27 Thrive Round Table Discussion: Raising Finance 5pm-7pm The Grand Central Hotel, Glasgow Contact: Amanda, 0131 526 3104 or info@ thriveforbusiness.co.uk 28 Thrive for Hospitality. Corinthian Club, Glasgow. 8.30am-10.30am Breakfast Event. Contact: Alex, 0131 526 3104 or email@example.com
MARCH 1 Power Lunch Club with Richard Marsham, Group Managing Partner of The Leith Agency. HSBC Corporate, Hobart House, Hanover Street, Edinburgh, EH2 1EL. 12noon-02:00pm. Contact firstname.lastname@example.org 2 Ayrshire Chamber of Commerce Annual Dinner 2012. Fred MacAulay hosts evening at Ayr Racecourse. 6.45pm. Contact: Yvonne on 01292 678666. 15 Power Lunch Club with Sandy Kennedy, CEO of The Saltire Foundation. bto Solicitors, 48 St. Vincent Street Glasgow G2 5HS. 12noon-2:00pm. Contact email@example.com Please check with the contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above e-mail address of any changes or cancellations as soon as they know of them.
Benvenuti a casa.*
*Welcome home. Surround sofa.
Surround sofa as shown from
Natuzzi Store Glasgow, 130 St Vincent Street (200 yards from Central Station), Glasgow, G2 5HF. T - 0141 222 2400 E - firstname.lastname@example.org
Published on Mar 6, 2012
Scotland's leading business lifestyle magazine. Published quarterly BQ Scotland is full of indepth interviews with leading business people a...