Bq SCOTLAND issue 5

www.bq-magazine.co.uk

ISSUE FIVE: AUTUMN 2011

a ticket to park The journey from airport parking to self-storage hart of the matter How a dean’s vision in education and research on a world scale is adding value to enterprise

taking baby steps Travel highchair success took even its inventor by surprise The show’s on the road Tosca, The Barber of Seville, and the drama of Scottish Opera

howie did it ISSUE FIVE: AUTUMN 2011: SCOTLAND EDITION

The entrepreneur who developed an iconic Scottish brand on a handshake, but managed to keep his wellies on the ground BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

SCOTLAND EDITION

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WELCOME

BUSINESS QUARTER: AUTUMN 11: issue FIVE Welcome to our fifth edition of Business Quarter Scotland. Thank you for your support and good wishes, and we hope that you continue to find something of interest when you spend your valuable time with this magazine.

When we launched we knew it was tough out there in the real world. But we had no idea how hard it is for so many businesses in Scotland. We’ve witnessed some well-known companies fall by the wayside, so our job at BQ Scotland is to try and reflect on the more positive stories, to see how entrepreneurs and business people have been able to pull through when times are so grim.

In this latest edition, there is a common thread running through all of our interviews; it is one of resilience and the flexibility to change. Yes, there are still huge issues about funding from the banks – that’s something we all have to live with and accept – and we now face the unknown territory of swathes of our public sector facing real cutbacks. This will have a detrimental impact on services and our lives in Scotland. It will mean uncertainty for those looking for work. There is the real prospect of a general strike and national disruption, perhaps even more civil strife. We hear the politicians and policy experts talk about “growth” and creating new channels of enterprise, yet often they are powerless to suggest anything other than the Keynesian method of borrowing more to stimulate demand. But that’s too vague and scatter-gun.

And besides, John Maynard Keynes was a “between-the-wars” economist in the 1930s who died in 1946, long before our connected, digital global economy. National stimuli can easily evaporate as orders intended to help the UK disappear overseas.

We need to understand the remedies and the drivers closer to home. We need sustainable growth in Scotland and at more local and regional levels. We have to play to our obvious strengths. We need a pro-active economic

development agency supporting future winners. We need to understand the psyche of success as opposed to the fear of failure – and what makes the entrepreneurial mind tick.

BQ Scotland hopes to play a small part in this.

We try to offer a balance of different people and their business stories with their own experiences and journeys. It’s not easy running a successful business – if it was, the country would be booming – so we should place as much store in the real-life lessons learned in business than in the roomfuls of armchair economists who can seldom agree on anything.

If you’re new to BQ – and we’re getting more converts as the word spreads – welcome to you, too. We now have a subscription service where you can order the issues at a nominal fee. We’re always keen to get feedback, comments and hear of bold Scottish businesses and their successes, so keep sending your emails to editor@bq-scotland.co.uk. They all get opened and read, although we can’t always guarantee a reply!

Kenny Kemp Editor, BQ Scotland

CONTACTS room501 ltd Christopher March Managing Director e: chris@room501.co.uk George Cheung Director e: george@room501.co.uk Euan Underwood Director e: euan@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk Mark Anderson Director e: mark@room501.co.uk EditorIAL Kenny Kemp Editor e: editor@bq-scotland.co.uk Alastair Gilmour Sub-editor Gillian Law Editorial Design & production room501 e: studio@room501.co.uk Photography KG Photography e: info@kgphotography.co.uk Chris Auld e: chris@chrisauldphotography.com advertising For advertising call 0191 537 5731 or email sales@bq-magazine.co.uk

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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, September 2011.

SCOTLAND EDITION

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BQ Magazine is published quarterly by room501 Ltd.

BUSINESS QUARTER |AUTUMN 11

CONTE BUSINESS QUARTER: AUTUMN 11 john mCglynn

Features

44 craggy outlook Financing wind power to be a world leader in renewables

24 entrepreneur Airlink chairman John McGlynn has a ticket to park and thrive

30 success story Alex Reedijk, Scottish Opera, and a balancing act that’s working

34 joint venture Simon Howie is a businessman from the Scottish mould of entrepreneurs

BUSINESS QUARTER | AUTUMN 11

48 baby steps

24 rachel jones

Rachel Jones sits down to talk about the development of the Totseat

72 hart of the matter A woman with a remarkable vision for business, teaching and research

76 Eye of a storm Iain Mercer is his own man in commercial reality

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48

TENTS SCOTLAND EDITION

nick price

40 COMMERCIAL PROPERTY

The landmark developments creating our enterprising landscape

52 BUSINESS LUNCH

Regulars

Nick Price turns Bright Purple and talks scallops and pork belly

56 FASHION Shoes that are ‘quirky with a twist’

60 equipment The difference a watch makes

6 ON THE RECORD Scotland’s producers: Food for thought

12 NEWS Who’s doing what, when, where and why, here in Scotland

22 AS I SEE IT Craig McKenna is in with the in-crowd

52 iain mercer

66 MOTORS The initials say ED but what do they mean? Lawyer George Frier finds out

70 WINE George Morris’s glass goes with a swing

80 Jock Yuler Gripping gossip from our backroom boy

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76 BUSINESS QUARTER | AUTUMN 11

ON THE RECORD

AUTUMN 11

>> Here’s to Scotland’s HGDP – Home Grown Domestic Products Our food and drink industry – with a sector turnover of £11.9bn in Scotland – is helping to pull the country out of the doldrums. Karen Peattie looks at the prospect and selects her ten companies to watch It’s a key business driver for Scotland, up there with energy, life sciences, financial services and tourism, so why is it that Scotland’s food and drink tends to command fewer column inches than some other sectors?

Even with an impressive one in five people in manufacturing working in the sector, food and drink doesn’t have quite the same appeal as other “sexier” sectors, despite its massive contribution to the Scottish economy. (BQ Scotland profiles Simon Howie in this edition on pages 34-39). But take a leisurely Saturday morning stroll around a local farmers’ market, peruse the menu more carefully next time you’re out for dinner, or simply make the effort to look for Scottish produce while doing the weekly supermarket shop and you might be surprised.

Provenance is the current buzzword and Scotland has it in abundance – just ask Scotland Food & Drink, organiser of the recent Scottish Food & Drink Fortnight, the annual food-fest that brings together restaurants, visitor attractions, festivals and retailers – big and small – to celebrate the rich pickings to be found in Scotland’s larder.

Scotland Food & Drink, an industry-led organisation working closely with both the Scottish Government and Scottish Enterprise, aims to grow the value of our food and drink sector to £12.5bn by 2017. But with rising fuel prices and the high cost of raw material pushing up food prices at the checkout, Scottish producers are blatantly aware that they can no longer rely on a misty-eyed whisky, haggis and shortbread view of the world if they are to aspire to this ambitious figure.

So this autumn’s news that sustained growth has helped the Scottish food and drink industry hit record highs with turnover reaching £11.9bn is a clear sign that things are moving

BUSINESS QUARTER | AUTUMN 11

Royal approval: Glenmorangie Company’s state-of-the-art whisky bottling facility at the Alba Business Park in Livingston was opened by the Duke of York on September 7 2011. A cask of Special Reserve, laid down by the Duke at a visit to the Tain distillery 14 years ago, is being bottled to mark the occasion.

in the right direction. Our food and drink manufacturing sector also broke the £9bn barrier for the first time, enjoying 8% growth.

The food and drink key sector GVA (gross value added) has increased by 9% and now stands at £4.8bn. It is now the largest manufacturing industry in Scotland – accounting for a third of overall manufacturing GVA. In the lucrative export arena, Scotch whisky grew strongly in the first six months of 2011, defying global economic uncertainty.

Global shipments between January and June reached £1.8bn, up 22% on the £1.47bn achieved in the first half of 2010, according to

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the Scotch Whisky Association.

Scottish farmed salmon, meanwhile – frequently under fire from the anti-fish farming lobby – also continues to show record growth with export figures up 37% at the start of 2011 compared to the same period last year.

A good news story for Scotland, then? Most definitely “yes” if the crowds that flocked to recent foodie events such as EatBute, Savour the Flavours of Dumfries & Galloway, the Dundee Flower and Food Festival, East Renfrewshire Food Festival and Huntly Hairst are anything to go by. The public, it would seem, just can’t get enough of Scotland’s larder with its premium beef, pork and lamb, game, quality fish and seafood, fruit and vegetables and dairy produce very much in demand.

Destination stop-offs, such as House of Bruar on the A9 at Blair Atholl, proved that the formula works for visitors too. Add to the equation the splendid array of fine food and drink products that can be found in farm shops, delicatessens and supermarkets and, of course, our whisky and there’s a recipe for success that few other countries can boast.

Here, Karen Peattie highlights 10 of Scotland’s most innovative and ambitious food and drink companies:

>> St James Smokehouse, Dumfries and Galloway It’s been quite a year for this smoked salmon producer. The Annan-based company has been making a name for itself in a mature market, winning Business of the Year and International Business of the Year in the prestigious Scotland Food & Drink Excellence Awards in May. Debt-free and currently investing around £1 million in a new fresh salmon filleting plant to boost efficiency and operate more cost-

AUTUMN 11

effectively, founder Brendan James Maher has aspirations to be the “Aston Martin of salmon”.

Owner: Brendan Maher

>> Saladworx, Highlands

ON THE RECORD

Scotland Food & Drink Excellence Awards and has secured listings in Harvey Nichols and Jenners as well as delicatessens, independent wine retailers, bars and restaurants, Owners: Jane and Alex Nicol

What’s so special about a bag of salad? Well, this enterprising young producer grows its own leaves in Dornoch in the Highlands, incorporating colourful edible flowers into the mix.

Supplying hotels, restaurants, delicatessens and farm shops, the company has won numerous industry awards and impressed the judges of the Scotland Food & Drink Excellence Awards, winning both Product of the Year and Product Innovation of the Year.

Its products have even been used on BBC’s MasterChef.

Owners: Michelle Bowley and David Harbet

>> Belhaven Fruit Farm, East Lothian

>> Scotty Brand, Lanarkshire

>> Graham’s The Family Dairy, Stirlingshire

A standalone company backed by the high-profile Airdrie-based Albert Bartlett Group, one of the UK’s leading providers of potatoes, Scotty Brand supplies its own branded potatoes to caterers and retailers.

Gearing up for a big marketing push and the launch of new products, Scotty Brand is headed by Paul McLaughlin, former chief executive of Scotland Food & Drink, who sees the brand as an umbrella for great Scottish produce both in Scotland and wider UK markets. Look out for more than just veg in the future as Scotty Brand moves into soft fruit and categories such as beef, salmon, haggis, rapeseed oil, jams and oatcakes.

>> Spencerfield Spirit Co, Fife Another small family-owned enterprise, this one was set up in 2005 by Jane and Alex Nicol, former marketing director at Glenmorangie, working from the space above the garage at their home near Inverkeithing in Fife.

Spencerfield’s Edinburgh Gin, traditionally produced and tapping in to the Edinburgh distilling scene of old, is a “classic big juniper gin with a twist”, batch-distilled in a Jenny, a Scottish copper pot still, using Scottish grain spirit, juniper and botanicals.

Packaged in an Art Deco-style bottle, the product won the drinks category in the

Producer of Thistly Cross cider, the owners of this Dunbar-based farm enterprise launched IceDelight, a fat-free frozen dessert which blends homegrown local fruit with an authentic Italian recipe, earlier this year. Fast gaining retail exposure in farm shops and delicatessens across the country. Tapping into the luxury but guilt-free consumer market, IceDelight is both fat-free and gluten-free, and uses as much fruit as possible from the family farm.

Owner: Mark Rennie

A long-established dairy farmer but fast gaining a reputation for its innovative dairy products, Graham’s inaugurated a new £1.2m butter plant at its Bridge of Allan headquarters this summer and launching its new Scottish Spreadable Butter. The new product bolsters its award-winning portfolio of Scottish Dairy, Graham’s Gold and Organic milks, creams, butters and ice-cream with packaging that reinforces the brand values of family and farming heritage. In May, Graham’s won both the Dairy Product and Marketing Initiative of the Year categories in the Scotland Food & Drink Excellence Awards. In the year to March 2010, Graham’s record results included a 28% jump in pre-tax profits to £1.05m.

Managing director: Robert Graham; marketing director: Carol Graham

>> Macphie of Glenbervie, Aberdeenshire A long-established supplier of food ingredients to the bakery and foodservice sectors, both in the UK and export markets, Macphie made its first foray into the retail market with its DeviliShh range of “posh puds” last year.

Making quite an impact in marketing circles by initially using home parties (along the lines of Ann Summers and Tupperware) to sell the

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range, Macphie is now ramping up the brand via the more conventional retail route with listings in retailers in the UK and Ireland including Waitrose, Dobbies, Superquinn and Lakeland plus independent delis and farm shops. Located on the Glenbervie Estate near Aberdeen, which has been in the Macphie family for over 700 years, the £40 million turnover-plus firm also operates a site at Tannochside, Lanarkshire.

>> Connage Highland Dairy, Highlands This producer of organic, artisan cheeses such as Clava Brie and Crowdie, handmade using traditional techniques on the family dairy farm at Ardersier, near Inverness, has been in business since 2005, diversifying into cheese-making to add value to its milk. Owned and run by Jill and Callum Clark and their family, Connage has experienced a surge demand for its handcrafted cheeses and supplies a diverse range of retail and foodservice customers.

Owners: Jill and Callum Clark

>> Mackintosh of Glendaveny, Aberdeenshire Still in his early twenties, Gregor Mackintosh produces his extra virgin cold pressed rapeseed oil – low in saturated fat and rich in omega oils – on the family farm near Peterhead in Aberdeenshire. A former finalist in both the Shell Livewire Young Entrepreneur of the Year and Prince’s Scottish Youth Business Trust awards, he launched the business in 2009.

Earlier this year, Mackintosh clinched a major deal to supply all Asda stores in Scotland.

Owner: Gregor Mackintosh

>> Stoats, Edinburgh From small beginnings selling fresh porridge at music festivals, Stoats has grown in stature since its launch in 2004. Regular visitors to farmers’ markets in Edinburgh and Glasgow and musical festivals such as T in the Park will be all-too familiar with Stoats innovative range of funky oat-based products. Tapping into the key trends of health and convenience, Stoats supplies it products into a range of retail and foodservice channels.

Founder and managing director: Tony Stone n

BUSINESS QUARTER |AUTUMN 11

ON THE RECORD

AUTUMN 11

>> Bank managers encouraged to go back to basics The banks have taken a bashing – which isn’t surprising considering the state of the UK economy. With many banking experts still poring over the details of John Vickers’ Independent Commission on Banking, BQ Scotland caught up in Glasgow with Chris Sullivan, the chief executive of Royal Bank of Scotland’s Corporate and Business Banking Division in Glasgow. We found him forthright and willing to discuss the issues that are perplexing Scottish business. But he insisted that RBS, which remains 83% owned by the UK taxpayer, must not be pushed into “irresponsible lending” to meet further UK government lending quotas.

He said RBS had exceeded its loans for businesses through Project Merlin, the agreement between the UK government and the major banks, to lend £190bn on new credit to businesses with £76m to SMEs in 2011.

Sullivan said: “If you look at the absolute amount of money that RBS is lending – £15.5bn to SMEs in the first six months, £32.2bn over the year – when you compare it to anyone else and you look at the relative market share, we punch way over our weight in that respect. We are committed to this more than anyone else.”

But he threw in a note of caution over suggestions of a possible “Merlin II”, which might set lending figures again for 2012. So far, there are no plans to continue Project Merlin into next year.

“We shouldn’t be focusing simply on lending, but we should be helping Government on building the economy,” he said. “That’s the over-riding driver.”

RBS’s own impairment figures suggest there are still a lot of firms defaulting on loans and companies collapsing, with a danger sign that a further directive on lending from the UK government could harm Britain’s fragile banks as they rebuild.

“The impairment figures are not pleasant,” he said. “The vast majority of RBS’s impairments were for loans put in place before the banking crisis, so there is still some things to work

BUSINESS QUARTER | AUTUMN 11

We shouldn’t be focusing simply on lending, we should be helping Government build the economy through. I don’t think the Government is asking the bank to lend irresponsibly.

“I hope it wants us to lend as much money as we can to people who have viable businesses with the ability to pay back because if we are lending to people who can’t, it would be wholly irresponsible and the Government would be having an entirely different criticism of us. That would not be good for the economy.”

In the first half of 2011, RBS made £44.2bn of new lending to UK businesses, including £20.3bn to SMEs, £15.5m of new lending and £4.8bn of overdraft renewals. There are no separate figures for Scotland, but RBS lent over £5bn to businesses in Scotland in 2010. RBS’s UK corporate raised £966m in income in the first six months, with impairment charges of £218m. While over the year RBS has reduced its impairment from £1.1bn to £900m, a massive £426m remains from UK retail and corporate division.

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“If you look at the market as a whole, property took an extraordinary hit,” said Chris Sullivan.

At RBS, UK lending to businesses on property assets in 2007 was 70p in every £1; since then commercial property valuations have fallen by 30-40%.

He said: “Property values have fallen dramatically in term of the absolute levels, so proportionally you’ll see us lending to other sectors of business. It’s going to be higher in sectors such as manufacturing. RBS would like to reduce it’s property levels over time but we’re still supporting good property assets.”

Chris Sullivan, who took over his role in August 2009, admits that over the last 15 years banks have lost sight of what they should be doing putting sales before service. He has been spending time visiting chambers of commerce, meeting RBS staff and leading Scottish business figures, such as Stefan King of G1 Group, and says RBS is now trying to get itself back on track.

“The banks lost their way over the last 15 years in terms of their raison d’être and we turned ourselves from a service industry to a sales industry. I’m trying to reverse that.”

Sullivan is committed to putting the old bank manager back on the street but in a modern way.

“It’s about getting the right people in place,” he said. “Bank managers are not managers any more in business banking. I’ve made a promise that all our relationship managers will be accredited bankers. So they are going to be fully trained in cashflow, and they will have to understand businesses.”

For this, Chris Sullivan will be sending his relationship mangers to go out and work at least two full days in Scottish companies over the next few years.

“Our people have to understand what they can bring to help businesses,” he said. “There are three things – we help to make these business more efficient, we help them take costs and risks out of their business, and how do we help them grow their business.

“Scotland is very important to us and I think we are demonstrating that.” n

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ON THE RECORD

>> Deal is a boost for Scottish legal expertise The summer might have been short and sweet for some of Scotland’s dealmakers. But relationships are long. Graeme Bruce, partner at Dundas & Wilson, was the senior legal adviser behind Jim McColl’s Clyde Blowers Capital, the industrial investment fund, which sold Clyde Union Pumps to the SPX Corporation in the United States.

Tunnock’s tea cakes and lashings of Irn-Bru helped fuel what is likely to be one of the ‘Scottish Deals of the Year’, but the high-carb intake obviously alleviated the stress. Graeme Bruce says the deal was straight-forward but put this down to Jim McColl’s team being extremely well-organised and knowing what they wanted from it – and what safeguards would be made for a business that has had an emotional attachment for McColl.

Dundas & Wilson’s corporate team was appointed by Jim McColl, chairman and chief executive officer of Clyde Blowers Capital, in 2007 to work with his organisation through its transformation and international growth. The law firm was lead adviser through milestones for both the Clyde Blowers Capital private equity fund and the creation of Clyde Union Pumps. The first transaction for Clyde Union Pumps was in May 2007 when it acted in the £48m purchase of the former Weir Pumps business in Glasgow from the Weir Group.

Following this, Graeme Bruce and colleagues worked on the establishment of Clyde Blowers Capital, as a private equity fund which became the main investor in Clyde Union Pumps. In September 2008, Clyde Union Pumps bought four separate businesses from Textron as part of a $1bn deal.

The latest deal was announced to the New York Stock Exchange and involved SPX agreeing to acquire Clyde Union for £750m.

On completion, £700m would be sent to Clyde Blowers Capital with a further £50m subject to an earn-out depending on future performance.

Clyde Union will continue to be run as a standalone business with a head office in Glasgow, under the leadership of the same management team.

Graeme Bruce’s relationship also includes

working with InterBulk Group, a dry-cargo, bulk-handling business with operations in China and another of Jim McColl’s interests, where he is a non-executive director. Earlier in May, Bruce and his team were involved with the £18.15m placing of Interbulk shares on the AIM, so that Sinotrans, based in Hong Kong, could take a 35.3% share. The proceeds are to be used by InterBulk to repay an HBOS loan, and revise its banking facilities.

“The Clyde Union Pumps was a huge deal in terms of the numbers of documents,” said Bruce. “Our boardroom table was covered in documentation, primarily driven by the banking legals. There was a lot of debt finance put in place with a syndicate of banks. There was – and there still is – a large amount of paperwork required by the banks.”

Dundas & Wilson co-ordinated all the due diligence on the legal side.

“From Glasgow, we had 80 different lawyers in over 20 jurisdictions because the deal was going for quite a while,” said Bruce. “We were co-ordinating them all.”

The deal was done in the US, but a lot of discussions were done through conference calls and the shifting of documentation digitally. Bruce didn’t even have to get on a plane to sort out the US end McquireWoods, a major US legal firm, were very good at handling the US diligence, he said.

“It is brilliant to see a UK business with such strong fundamentals attracting international investment of this kind. Clyde Union Pumps has generated significant levels of interest since its formation.”

He added that it had been a pleasure to have worked with Jim McColl and his team over the last four years, which included head of legal Shauna Powell and Keith Gibson, from the

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original acquisition of the Weir Pumps business through to the launching of the Clyde Blowers Capital and the acquisition of various businesses from Textron.

“It’s a great morale boost for Scottish legal expertise and the rest of the law firm. Everyone played their part, including those who keep us going with teas, coffees and Tunnock’s! The transaction showcases Dundas & Wilson’s expertise and our ability to work with a major industrial sector client on an international scale. Our proposition is predicated on the belief that significant value can be created for companies who engage experienced advisers who are dedicated to working with their clients in delivering projects on time with minimum disruption to their businesses.”

Jim McColl agrees: “This was a very complex deal with a number of challenges and we are delighted with the result,” he said. “Dundas & Wilson have been at our side all the way and we greatly value their support through both the creation of our fund and execution of its various deals.”

SPX is a publicly-traded multi-industry global engineering solutions company with annual revenues of $5.5bn, employing more than 15,000 people in 35 countries. The company is headquartered in North Carolina. n

This was a very complex deal with a number of challenges and we are delighted with the result BUSINESS QUARTER |AUTUMN 11

BUSINESS GATEWAY

AUTUMN 11

Up for the challenges ahead The economy might be in a fragile state, but there are ways for Scottish companies to grow and prosper with help and advice from Business Gateway Every year Business Gateway, Scotland’s expert advisory service for developing new companies, and its network of advisers provide support to help businesses grow and prosper in many different industry sectors across Scotland.

“We know from talking to thousands of ambitious Scottish companies every year that growing a business is an exciting and challenging time but when it comes to the planning process, there’s no simple template that applies to everyone,” says Hugh Lightbody from Business Gateway.

He says deciding you want to grow your business is just the first, important step.

“Making it happen is more difficult, however, taking advantage of expert support and advice will make those next steps feel a lot easier.”

“Our expert advisory teams work across every sector supporting clients with ambitions to grow on a wide range of relevant topics. It might be exporting or marketing or it could be helping source finance or exploring new markets, online and offline.”

One business that has seen the benefits of working with Business Gateway is Edinburghbased Technology Consult. Launched in 2008 by entrepreneur Robin Mehta, the software company has grown rapidly and in the last six months alone has generated 30 new business wins. The business has also been awarded top 100 agency status by the Recommended Agency Register, and picked up the accolade of “Most Innovative Business” at last year’s Winning Entrepreneurs award ceremony.

“Without Business Gateway I can safely say the business would not have grown as it has, and my business adviser has been instrumental to that success,” says Mehta. “The mentoring scheme I was placed on was amazing and changed the way I thought about my company. My mentor gave me the confidence to take on my first employee after seven months of trading and taught me a lot about

BUSINESS QUARTER | AUTUMN 11

the technology business which has helped me get to where I am today.”

There is no doubt that growing any business requires a great deal of effort from key members of staff but it is also important to draw in help and advice from a wider group of individuals and organisations, as Hugh explains.

Photograph courtesy of Marshall Porter Photography

“Having intimate knowledge of local marketplaces and networks is vital,” he says.

“Business Gateway advisers have close working relationships with local authorities, Scottish Enterprise, Highlands and Islands Enterprise and Scottish Development International – all of which can contribute to the growth of a business. They all have links to various other support organisations too, which is ideal for supporting the range of growth opportunities available to Scottish businesses.”

Robin found Business Gateway’s support invaluable but for Glasgow-based business, Ocean Marine Training (OMT), it was a combination of support from Business Gateway, Scottish Development International and others that really helped to get the venture off the ground.

Run by 29-year-old businessman, Martin White, OMT specialises in the provision of health and safety and survival training for a number of industry sectors, including oil and

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gas, marine shipping, aviation and renewables.

“We have developed a number of partnerships in Finland and Denmark, which are proving to be extremely productive,” says White. “In addition, Business Gateway put us in touch with Scottish Development International (SDI) which resulted in funding towards a trip to Australia. As a consequence we are now looking to launch a Western Australia division later in the year.”

Utilising their extensive experience and contacts in the oil and gas industry, Martin and his business partner, entrepreneur Alaster Morrison, have now identified a number of other commercial opportunities including the sub Sahara’s first introductory drilling course in Namibia.

This combination of support services has been particularly important in the difficult economic conditions that have prevailed over the past few years, as Fife business PDMD Electrical Services discovered. When the Dunfermlinebased business started to feel the effects of the economic downturn, managing director Paul McDonnell decided it was time for the company to diversify. Thirteen months on, and with help from Business Gateway, PDMD is now racing ahead with its growing renewable energy work underpinned by their core electrical contracting expertise work.

McDonnell says: “We spent a lot of time to secure the necessary accreditations to allow us to operate in the renewables sector and we are now seeing an increase in customers looking for solar panel, low energy lighting and other environmentally friendly installations.

“Business Gateway has been fantastic and provided a sales and marketing adviser to help me put my strategy together and learn some new techniques to help the company secure more business and grow within this sector.”

More about Business Gateway at www.bgateway.com or call 0845 609 6611. n

How did a water engineering firm fill up their new business pipeline?

With the support of Business Gateway.

Waterfront Engineering, designers, manufacturers and installers of water flow control products.

With the help of our team of industry-experienced business advisers, a website dedicated to practical tools and resources plus access to information and networks, we’re your gateway to growing your business.

Grow your business with our support.

Visit www.bgateway.com or call 0845 609 6611.

your gateway to business expertise Business Gateway services are delivered by Local Authorities, Scottish Enterprise and Scottish Government with the support of associated partner organisations.

Maximum call charge from BT landline is 3p per minute.

NEWS

AUTUMN 11

Young creatives are honoured, a dram of Drambuie goes down well as Johnnie Walker hits the number one slot, trademark profits increase, there’s gold in them thar hills, and Menzies does the billion >> Gold in them thar hills

Plans to develop Scotland’s first commercial gold and silver mine at Cononish, near Tyndrum, have received a major boost following support for the proposed development during the consultation period.

A range of national and local organisations, as well as individuals including local residents, politicians, jewellers and academia, have given their support to the planning application for the delivery of Scotland’s first commercial gold mine. This follows the lodging of the application with Loch Lomond and the Trossachs National Park Authority in July.

The mine is expected to produce 20,000 ounces of gold and 80,000 ounces of silver per year, of which 5,000 ounces of gold will be extracted as unrefined gold bars and identifiable as Scottish Gold, attracting a premium for jewellers and goldsmiths due to its scarcity value.

Professor David Bell of Stirling University estimates an extra £80m in additional economic activity will be generated in Scotland through the wider supply chain.

BUSINESS QUARTER | AUTUMN 11

>> On to the next level One of the most significant deals of the summer was the £750m agreement by Clyde Blowers Capital, the industrial investment fund based in East Kilbride, to sell its Glasgow-based Clyde Union Pumps group to Fortune 500 company SPX Corporation.

It is a personal achievement for Scottish entrepreneur Jim McColl, chairman and chief executive officer of Clyde Blowers Capital, who has led Clyde Blowers Capital. Clyde Union will continue as a stand-alone business with its head office in Glasgow, under the same management team.

The deal was announced to the New York Stock Exchange and involved SPX agreeing to acquire Clyde Union for a headline price of £750m, £700m of which will be in cash at completion and the remaining £50m subject to an earn-out dependant on future performance.

SPX is multi-industry global engineering solutions company with annual revenues of $5.5bn, employing more than 15,000 people in 35 countries. It is headquartered in North Carolina.

Clyde Pumps was formed in May 2007 when Weir Pumps (Glasgow) was acquired from the Weir Group plc for £48m. Its roots go back to Glasgow in 1871. Union Pumps, founded in 1885 in Michigan, was acquired through the Textron deal with Clyde Blowers Captial.

Jim McColl, who started his career at Weir Pumps as a 16-year-old apprentice, said: “This is about more than money. I went to America to meet the chairman and chief executive personally and to satisfy myself that they were committed to growing Clyde Union, and that was a key part of my due diligence.

“I told them I had strong emotional investment, and I genuinely wanted to see the business and the employees go on and prosper.

“I would not have sold Clyde Union to anyone who wouldn’t take the company to the next level. There had to be a long-term

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commitment. When we bought Weir Pumps from the Weir Group and saved it from almost certain closure, we made certain promises, all of which have been kept. I’m proud of that.”

This is about more than money. I went to America to meet the chairman and chief executive personally >> Sur-pies, sur-pies An initiative to provide tax relief to bakers to make new types of pies, rolls and cakes to support manufacturing businesses across the UK is proving popular with bakers in Scotland. Trade association Scottish Bakers has used partner Jumpstart to received tax refunds of £165,000 for members.

John Gall, managing director of Brownings the Bakers in Kilmarnock – home of the famous Killie Pie – said that “until we started using the Scottish Bakers service provided by Jumpstart, we didn’t realise that an R&D tax credits scheme even existed. We have subsequently told many bakers in the industry about these missed opportunities; bakers conduct projects all the time that are eligible under the scheme and when we got the tax refund we were extremely delighted and surprised.”

AUTUMN 11

COMPANY PROFILE

Recent reports of the death of entrepreneurship in Scotland have been exaggerated. Heriot-Watt University’s Converge Challenge provides start-ups with the financial support and business guidance they need to successfully get their idea off the ground and to achieve their business ambitions.

Heriot-Watt University - Supporting Scotland’s Next Generation of Entrepreneurs

H

eriot-Watt University prides itself on the relevance of its teaching and research and of its approach to innovation and commercialisation.

Over the years the University has demonstrated its long standing links with industry and applied nature of its research. Our aim is to grow research and business leaders of tomorrow by providing a rich learning environment for our students and staff and enabling them to develop both technical and commercial skills. Our excellence has now been recognised nationally – Heriot-Watt has won the title of Sunday Times Scottish University of the Year 2011-12.

The Converge ChallengeTM Business Plan competition was launched in 2010 in order to support the next generation of research entrepreneurs and aid the formation of sustainable, highly profitable technology companies in Scotland. With this ambitious aim in mind, in less than two years, Converge ChallengeTM has attracted over 80 applications from across Scotland and provided valuable training for more than 50 budding entrepreneurs.

From the top ten projects last year, two spin-out companies are at incorporation and two start-ups have been formed.

Converge ChallengeTM is organised by Research and Enterprise Services (RES) at Heriot Watt University and is the brainchild of Dr Olga Kozlova. Having started a biotechnology business herself straight after her PhD, Olga participated in a number of business plan competitions and was keen to come up with an initiative that would provide both viable practical skills to participants and encourage the formation of sustainable companies and address the broader issues of developing entrepreneurial skills in Scotland.

Focusing on these key goals, Converge ChallengeTM

Dr. Olga Kozlova, enterprise creation manager has become a rigorous four-stage process that requires participants to hone their skills at writing an all important executive summary, deliver a one minute elevator pitch, develop a business plan and experience a Dragons Den style investor presentation. The process lasts seven months and requires the applicants to excel further at each stage.

And the efforts are well worth it. With a cash prize of £25K and £20K worth of in-kind support from the great and the good of the Scottish Entrepreneurial community, Converge ChallengeTM is one of the top enterprise competitions in the UK. The external expert panel who judge the final business plans and pitches consists of experienced entrepreneurs, investors and business advisors.

It is their task to choose a winner from truly novel and exciting projects. The ideas range from innovative techniques for discovering antibiotics to wideband sonars based on dolphins; from

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unique advertising techniques to new generation diagnostics.

Dr Kozlova says, “We are lucky to have a very significant cash prize in this competition but our primary aim is to make sure that participants have the best chance of putting this funding to good use. That’s why, for the 12 months after the competition, the winners have a high calibre group of advisors working with them on every aspect of the business, including finance, legals, intellectual property and the most importantly, sales & marketing.”

In addition to the generation of profitable high technology companies in Scotland, Heriot-Watt University views Converge ChallengeTM as a tool to developing the research and industry leaders of tomorrow.

Gillian McFadzean, Director of RES, says “As a University, our job is to provide our graduates with the best chance of finding meaningful employment. The Converge ChallengeTM experience can unlock a multitude of employment opportunities for the participants and potentially generate high net worth individuals of tomorrow.“ The third Converge Challenge will launch in March 2012, with even more opportunities for budding entrepreneurs to get involved.

For more information and details on how to enter, go to http://www.hw.ac.uk/ convergechallenge

BUSINESS QUARTER |AUTUMN 11

NEWS

AUTUMN 11

>> Ten of the best Murgitroyd, the European patent and trademark attorney, based in Glasgow, has increased turnover for the 10th year in succession. Turnover increased by 13% to £33.2m, while operating profit increased by 7.2%, with profit before income tax increased by 8.7% to £4m.

There is a total dividend for the year of 10.75p.

Ian Murgitroyd, chairman of Murgitroyd Group, said: “I am pleased that Murgitroyd has performed ahead of expectations in an ever-challenging economic climate.

“We opened two new business development offices in Tokyo and San Francisco and expanded our Munich office. Although the market environment remains volatile we are confident we can continue to generate value for shareholders both organically and, if we can identify suitable opportunities, by acquisition.”

>> Growth is the driver Companies in Scotland will need to assess how Scotland’s Budget and Spending Review will impact on their futures. The SNP administration has had to trim its cloth with a £1.6bn cut in real terms with a budget of £28.25bn for 2012-13. Thousands of SMEs in Scotland depend on government and local authority work for their survival, so there is likely to be substantial pain.

A series of major capital projects is going ahead to stimulate the economy: they include the £1.5bn Forth Replacement Crossing, the £840m Southern General Hospital on a super campus in Glasgow; the new £100m Royal Hospital for Sick Children in Edinburgh, and the £400m Aberdeen Bypass. Other keynote projects include the M8 upgrades from Newhouse to Baillieston; the Dundee Victoria and Albert Museum; improvement of the A82; a new bus link to serve Glasgow; the A96 bridge upgrade at Inveramsay, and other new-build school programmes.

CBI Scotland’s director, Iain McMillan, said: “It is most encouraging that Scottish ministers have sought to protect and where possible enhance capital spending on important infrastructure projects, with welcome announcements on transport projects such as the Forth Crossing, M8, Aberdeen Western Peripheral Route and the Edinburgh/Glasgow rail link, as well as on renewable energy, affordable homes and broadband. These projects will provide much-needed employment in the short term and help to build Scotland’s economy in the longer term.

“Similarly the council tax freeze and the

BUSINESS QUARTER | AUTUMN 11

decision not to use the Scottish Variable Rate are very welcome. The decision to reduce significantly the costs of government is encouraging, as is the proposal to make public sector pensions more affordable just as the private sector has had to do over recent years.

“However, following last year’s removal of transitional rate relief, it is alarming that the Scottish Government is proposing two business tax rises, a business rate levy on large retailers who sell tobacco and alcohol products, and an apparent reduction in empty properties rate relief.”

He said the Scottish Government appears to be in denial with regard to the dire state of the UK public finances. The UK’s structural deficit must be reduced quickly along with the rising annual interest bill on the national debt.

Jenny Stewart, head of public sector at KPMG in Scotland, said: “We now know much more about where the cuts will fall through to 2014-15 – a further £1.6bn over the next three years.

“Each public sector organisation now needs to work out how to meet their own budgets – that will take a lot of hard work and co-ordinated effort to minimise the effect on public services.

“John Swinney has set out the key direction – another pay freeze, more efficiencies and minimising the impact on capital spending – through switching £750m from day-to-day spending to borrowing to fund capital projects in the next three years.

“Promoting capital investment is very welcome but it will be important to prioritise spending, as some projects will create more growth than others. Large projects apart, capital investment

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in IT or other equipment can help make the public sector more productive.”

She said low productivity in both the public and private sectors is a key drag on economic growth and this is an area where Scotland’s economic performance compares poorly with other European countries.

Andy Willox, Scottish convener of the Federation of Small Businesses, said: “In the years ahead, the employment and opportunities which small businesses continue to create will be more important than ever.

Thus, public bodies must not use their local business communities as a pot from which to draw additional income. Debate cannot focus exclusively on public sector difficulties, but how we can drive Scottish business growth and entrepreneurship.”

Debate cannot focus exclusively on public sector difficulties but how we can drive Scottish business growth >> Space for creativity – and bite Emma Little of ExecSpace and James Watt of BrewDog are joint winners of the Junior Chamber International’s most creative young entrepreneurs award. Edinburgh’s Emma Little is founder of ExecSpace, a company specialising in helping sourcing conference and meeting room requirements, while James Watt is co-founder of BrewDog brewery in Aberdeenshire. The CYEA award recognises business people who use imagination and creativity in their business enterprise.

AUTUMN 11

COMPANY PROFILE

The Business & Enterprise Group - a rapidly growing UK-wide company – has been appointed to deliver the Government’s New Enterprise Allowance service in Scotland. NEA is aimed at helping people thinking of starting their own businesses via mentoring and access to funding for start-up costs.

New contract will help kick-start enterprise

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he Business & Enterprise Group, one of the UK’s leading specialists in business improvement, will be working in Scotland to deliver one of the Government’s key initiatives to kick-start the economy - the ‘New Enterprise Allowance’ Loan Service.

The appointment to deliver the Service, with lead partner firm GLE, expands the Business & Enterprise Group’s remit to help Scottish entrepreneurs work for themselves.

And, with NEA high on the Government’s political agenda as its flagship enterprise initiative, Chief Executive of the Business & Enterprise Group Alastair MacColl, says it is great news for those thinking about starting their own business.

“We have developed a comprehensive portfolio of contracts in Scotland - tailored to meet the specific needs of Scottish business - and are delighted to have won this high profile contract.

It helps us to increase our national footprint and adds to a series of recent successes for us.

“This new contract expands our role in Scotland and enables us to help more people who have great ideas for new businesses to get them off the ground, creating economic growth and jobs.

“Our experience in this field is vast and we believe we are the right people to help Scotland get the most out of this scheme designed to promote selfemployment to those who are unemployed.”

The Business & Enterprise Group is a rapidly growing UK-wide company working for household name clients such as Marks and Spencer, Heathrow Airport, United Utilities and NPower and this work on behalf of the Department of Work and Pensions

Alastair MacColl, chief executive of the Business & Enterprise Group

this new contract expands our role in scotland and enables us to help more people who have great ideas for new businesses to get them off the ground, creating economic growth and jobs adds to the list of prestigious clients.

The NEA front end of the Loan Service will be under the remit of the Business & Enterprise

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Group’s Investment Centre which last year alone delivered funding contracts worth just under £12million to more than 3,700 firms.

The Business & Enterprise Group recently acquired Business-to-Business (BtoB) which specialises in creating and delivering business support projects and events. The Group also acquired NDI UK, the commercial arm of Northern Defence Industries, adding to its portfolio and increasing its presence on the national business support stage.

The New Enterprise Allowance is available to those who have been claiming jobseekers allowance for six months or more. It will provide access to business mentoring, financial support and help with capital start-up costs via £1,000 loans.

Applicants will have to be able to demonstrate their business is viable and has potential for growth to be eligible for the NEA loan.

As well as providing excellent service to its clients, the Business & Enterprise Group’s commitment to its staff was recognised recently when it was named as number 52 in the Sunday Times national top 100 best companies to work for list 2010.

For further information about the Business & Enterprise Group visit www.business-enterprise.net or call 0191 426 6100.

BUSINESS QUARTER |AUTUMN 11

NEWS

AUTUMN 11

>> Ten years after Many of Scotland’s senior business women believe it will be at least a decade before female board members become commonplace, according to a survey.

More than 62% said that change would take over ten years, with at least one in four believing it could be 20 years or more before women gain an accepted place in the board room. Scottish companies have been responding to Lord Davies’ report which called for 25% of the boards of public companies to comprise women by 2015. In the survey, conducted by Tods Murray’s Women in Business Network, only 4% believed that the report had made a big difference to attitudes, with 42% suggesting it had made a slight different. Nearly half (46%) said that being accepted in an existing male culture is the biggest hurdle, closely followed by “lack of encouragement” (42%).

>> Hot sell Axzona

>> Read all about it John Menzies, one of Scotland’s largest companies, broke through the £1bn turnover barrier in the first half of 2011. Turnover for the first six months was £1,0005.7m, with underlying profits before tax of £25.1m, up 30%, and earnings per share of 32.4p. Menzies Aviation, which employs 17,000 people, continues to be a highly profitable and well-run organisation, serving dozens of major international airports with its worldwide operations. Menzies Distribution, employing 4,000 people distributing newspaper and magazines, is the other arm of the business established in 1833. It delivers 5.2 million newspapers and 2.4 million magazines every day.

Iain Napier, chairman said: “The group has had a good first six months, underlying profit before tax is up 30% and I am pleased with the performance of both divisions. Menzies Aviation continues to prosper and for the first time was the larger profit contributor. The first half benefited from a large number of contract gains, demonstrating the division’s position as the quality player in its market, and also the reversal of the financial loss relating to the volcanic event that occurred in April 2010. Menzies Distribution continues to perform robustly.”

>> Man with a plan Audit Scotland’s report into the Scottish planning system has met strong criticism from the Federation of Small Business in Scotland.

“It is completely unacceptable for the Scottish planning system to perform so poorly despite years of reform and political attention,” said the Federation’s policy convenor Andy Willox.

“While we understand that further changes are in the pipeline to try and improve the system, it is baffling that despite significantly

BUSINESS QUARTER | AUTUMN 11

fewer applications in recent years, the process is still taking as long.

“In the boom years, the explanation for poor performance was that they were overloaded with work or that the private sector kept pinching their star players. Now we’re finding that the system can’t cope with too few applications either. Our members, both those with occasional and regular contact with the planning system, just want the system to work and are asking when progress will be made.”

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Axzona Limited, a Scottish website monitoring company, has been bought

by NCC Group, provider of escrow and assurance services, for a consideration of up to £1.7m in cash. NCC Group expects to benefit from the monitoring technology developed by Axzona, based in Edinburgh which was set up in 2000

by Sheila McCall and Alan Hughes.

>> Economy in conversation Sustainable recovery is top of the agenda for the first National Business Convention, run by the Federation of Small Businesses (FSB) and the Scottish Council for Development and Industry on Saturday, October 1 at Murrayfield Stadium, Edinburgh.

FSB’s Scottish convener, Andy Willox says: “We all want a sustainable recovery built on the strong, broad foundation of more businesses, doing more business, providing more quality jobs in a wider range of sectors. We need a real conversation about the real economy. And we are kicking that conversation off at the National Business Convention.”

AUTUMN 11

NEWS

>> Fast running Walker

>> Motors running well Scotland’s fourth largest motor group, The John Clark Motor Group, has reported a strong financial performance for the year to December 31, 2010. At £281m, turnover for the motor group was up 10% up on 2009. Pre-tax profit to £3.1m in 2010.

New vehicle sales increased by 5% during 2010 to almost 6,000. Used car sales were down 4% on the previous year, reflecting the market conditions, but margins were improved.

John Clark, chairman and managing director of the John Clark Motor Group, said: “These results build on the achievements of 2009.

We ended 2010 with a record profit for the group and much improved liquidity. This puts us in a strong position for further development in the business. Particularly

against the background of the recession, it was also most encouraging that 2010 was the fifth successive year when turnover growth was achieved across each of our service, body repair and parts operations.“

We ended 2010 with a record profit. This puts us in a strong position for further development in the business

Diageo’s Johnnie Walker is the top-selling global brand in airports and travel retailer, according to the International Wine & Spirit Research’s ranking of the top 100 spirits brands. Travel retail sales of Johnnie Walker grew by nearly 300,000 nine-litre cases in 2010, extending its lead over second-place brand, Absolut, and gaining more than second largest-growing brand Chivas Regal.

Johnnie Walker variant Double Black made a significant contribution to the brand’s strong performance last year, generating an additional 119,000 cases in 2010.

Chivas Regal added more than 200,000 cases in 2010, while Absolut, Ballantine’s and Jack Daniel’s each increased volumes by more than 100,000 cases. Courvoisier was the fastest-growing brand among the top 25 growth brands, increasing sales by 62%.

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The GEL programme ensures that your management talent receives world-class development and training wherever they’re based. We can promise you CPD of the very highest standard that will enhance both organisational performance and your talent retention strategy, through opportunities for: • Off-shore bespoke workshops • Virtual team working • Co-branding of learning materials in your house style • Accruing degree credits through short course completion For further information about how our courses could help your organisation’s employee education and development needs, please contact us at

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BUSINESS QUARTER |AUTUMN 11

NEWS

AUTUMN 11

>> That’s the spirit

>> Into the fast lane

Drambuie’s volumes have risen for a second year in succession by 1% – despite challenging conditions in the traditional markets and the collapse of the Greek economy, Drambuie’s third largest market.

Operating profit at £2.81m is 2% ahead of last year’s £2.75m and the company is continuing to operate on a debt-free basis.

Michael Kennedy became managing director in January this year; however, after the tragic death in June of CEO Phil Parnell, he has taken over as chief executive. Richard Stone returned as chairman.

Michael Kennedy said: “I look forward to building on the great platform that Phil had put in place.

“Our vision for the company remains unchanged. We are a highly focused international brand marketing and distribution company with a clear strategy underpinned by world-class distributor management and financial processes.”

The highlight was the 4% growth in shipments to the US, which remains Drambuie’s most important market. Sales volumes grew across all regions, except southern Europe.

A premium version of Drambuie called The Jacobite Collection – The Spirit of ’45 is the most valuable addition to the range of whiskies infused with the secret elixir handed down from Bonnie Prince Charlie.

BT has announced that another 45,600 homes and businesses in Scotland are set to benefit from super-fast broadband.

Galashiels and Peebles in the Scottish Borders; Perth; Bannockburn in Stirlingshire; Morningside in Edinburgh, and Strathaven in South Lanarkshire are among the places included in the company’s £2.5bn roll-out of fibre broadband. The upgrades are due to be completed by autumn 2012.

Brendan Dick, director of BT Scotland, said: “BT’s roll-out of super-fast broadband is marching on. Our latest investment in these six exchange areas will propel internet users at home and at work into the 21st century fast lane, and marks another milestone in the development of Scotland’s next generation communications.”

Cabinet secretary for infrastructure and capital investment Alex Neil said: “We are clear that the private sector has a significant role to play too, and today’s announcement is a welcome step forward towards achieving our vision. I want Scotland to have access to a fit-for-purpose, 21st century communications network that will bring benefits to business.”

>> Lease kick-start BT has launched a scheme offering start-ups across Scotland the chance to lease up to £15,000 worth of technology and telecommunications.

Under the KickStart Scheme, which runs in conjunction with Shire Leasing, new businesses trading for under three years will be eligible. KickStart offers start-ups the opportunity to purchase products and services including telephone systems, handsets, connection charges, software licences and IT equipment such as laptops. An average £3,000 loan will cost less than £20 per week and can be added to as the business grows.

BUSINESS QUARTER | AUTUMN 11

>> Award reward Ruth Birrell, a manager with Bank of Scotland Private Banking, was crowned the Deloitte Financial Services Rising Star 2011 at a dinner in the National Gallery in Edinburgh. Ruth was awarded first place after impressing the panel with a presentation tackling banking reform and the implications for free banking. The runners up were Aileen Wallace from Clydesdale Bank, Fal Mansoori from Santander, and Alex Kerr from Lloyds Banking Group.

>> Shining light Edinburgh-based online accounting software company FreeAgent, founded by former freelancers Ed Molyneux, Olly Headey and Roan Lavery, have secured over £2m in investment from SM Trust working with Torch partners. It is the fourth round of funding since FreeAgent was set up in 2007.

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>> Long-term deal Sigma, the asset management group, has bought Inpartnership, the distressed large property-related regeneration company, partly owned by Sir Tom Hunter’s West Coast Capital. Inpartnership Limited, which was looking at long-term renewal projects with local authorities, was owned by URWI Limited, a joint investment vehicle controlled by West Coast Capital and HBOS. The acquisition was for £347,000 but under the deal, Sir Tom’s company is eligible for a future pay-out should the assets – which include partnership developments with local authorities in Liverpol, Solihull and Salford – become profitable. Through the deal, Sigma will be entitled to £6.9m and West Coast Capital £3.1m from the first £10m of profits generated. The estimated development value of the partnerships was £2bn.

AUTUMN 11

COMPANY PROFILE

As a triple accredited business school, Strathclyde Business School is continually innovative in the way it works with business and in the way it addresses business education, with some significant new developments this year highlighting its pioneering outlook.

Engage with a world class business school

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ounded in 1947, the University of Strathclyde Business School (SBS) is a pioneering, internationally renowned academic organisation that shapes and develop the business minds of tomorrow. We offer the highest quality business education and management development for both inexperienced graduates and senior managers.

Strathclyde is a triple accredited business school: one of a small percentage worldwide to be triple accredited, holding accreditation from the international bodies, AMBA, AACSB and EQUIS. Strathclyde has a reputation for research excellence. Most recently, in the 2008 Research Assessment Exercise, Strathclyde Business School was rated 7th in the UK for its ‘world leading and internationally excellent’ research.

The triple accreditation, global rankings, internationally acclaimed research and our international expansion via satellite centres – we have 9 plus a new campus in India - have done much to raise the profile of SBS internationally among both its peers and other key stakeholders within the corporate world.

All of this places Strathclyde as one of the leading business schools in the world, but we don’t do complacent. We believe constant engagement with business and society is crucial to our relevance and success, and to the development of the organisations we engage with.

One example of engagement with industry is the launch of a new Executive Masters in Hospitality and Tourism Leadership. This was formulated in partnership with industry leaders via the recently formed International Leadership School in Scotland (ILSS) to provide a challenging, international development experience for the

we believe constant engagement with business and society is crucial to our relevance and success, and to the development of the organisations we engage with hospitality and tourism sector’s leaders of tomorrow. www.htleadership.com.

This year, SBS has developed the MBA 25, a new MBA consortium programme, in partnership with William Grant & Sons, to release potential and create future global leaders within William Grant and across a consortium of like-minded Scottish organisations.

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We are also supporting and partnering the launch in Scotland of the Global Management Challenge, the biggest Strategic Management Competition in the world with more than 375,000 participants from 30 countries. www.worldgmc.com SBS has been involved in developing the business skills of graduates via intensive training as part of the Talent Scotland Graduate Placement Programme. The Hunter Centre for Entrepreneurship was selected to provide the training to help graduates innovate or develop new products and processes in SMEs. www.strath.ac.uk/huntercentre Our latest international venture has seen Strathclyde Business School joining with SKIL Infrastructure Limited to deliver undergraduate and postgraduate management courses at Greater Noida, New Delhi. The first course – Masters in Management - is to be launched as of the 2011-12 academic year.

For further details: University of Strathclyde Business School 199 Cathedral Street Glasgow G4 0QU 0141-553-6118 www.strath.ac.uk/business sbs.admissions@strath.ac.uk

BUSINESS QUARTER |AUTUMN 11

NEWS

AUTUMN 11

>> BQ People on the move Robert Polet has been appointed a non-executive director of William Grant & Sons, the independent family distillers. Polet was chief executive officer and president of the Gucci Group, where he built brands such as Gucci, Stella McCartney, Yves Saint Laurent, Boucheron and Alexander McQueen. He was also president of Unilever’s worldwide ice cream and frozen foods division.

William Grant chairman, Peter Gordon said: “Robert has a special track record of leading and developing luxury brands which will be valuable to our board as we continue our journey to make our brands the envy of the spirits industry.”

a director responsible for identifying and acquiring land and property on behalf of individual investors.

Law firm HBJ Gateley has appointed Frazer Wardhaugh and Anne Struckmeier to

Dr Charles Gamble has also joined

head up the construction team in Scotland.

Wardhaugh, a former civil engineer, will head the construction transactions team and joins from Pinsent Masons, while Anne Struckmeier, a solicitor advocate joins from MacRoberts where she spent nine years. She will lead the construction disputes team based in Edinburgh.

Recruitment specialists Bright Purple Resourcing has announced the appointment of Neil Lafferty as sales director. He joins from RiseRecruitment, part of Murray Capital, where he was group sales director.

One of Scotland’s leading insolvency practitioners has joined Johnston Carmichael.

Donald McNaught has been appointed business recovery and insolvency director and joins the firm’s Glasgow office following a 15-year career in major accountancy practices.

Property Consultancy Knight Frank has appointed Jim Kirkwood as consultant land agent to help build and grow the firm’s land development services across Scotland. Jim joins from Allanvale Land Investments where he was

Capital Partners, has been appointed as investment director.

Rob Kennedy is the new European finance Scottish Widows Investment Partnership has strengthened its UK Equities team with the appointment of Andrew Paisley as investment director. Based in SWIP’s Edinburgh office, he will be involved in the management of SWIP’s UK smaller companies mandates, including research analysis, portfolio management and fund marketing. He brings more than 14 years of experience in asset management to the role and joins from Kempen.

NGenTech, the developer of new generator technology for the wind industry as chief marketing officer. He has considerable experience of the global wind industry and joins from Nordic Windpower.

director of Optos plc, the global retinal imaging company. He was previously director of finance at the University of Dundee.

Sara Caldwell has been appointed as group head of internal audit of Weir Group plc. She joins from PWC.

Don Jacobs is to be the new commercial director of BAA Aberdeen Airport – he joins from his position as country manager for DHL Global Mail in Switzerland and Italy.

Derek Leslie is joining Macduff Shellfish as its new chief financial officer. Macduff, which has recently attracted funding from Change Capital Partners, is a major fish and shellfish processing company. He joins from Independent Living Services.

Andy Neale, formerly of Scottish & Newcastle, is to be the new chief executive of Essential Edinburgh, the city centre management company.

Solway Steel, a division of the Barr Construction Group has appointed Tim Jamieson, from FJ Booth, as its new general manager.

Malcolm Group, the leading logistics and construction group, has appointed David Archer as group finance director. He spent a number of successful years at SMG plc, culminating as managing director of STV Ventures at STV Group plc.

Gray & Adams, the leading manufacturer of temperature controlled and other specialist transport equipment, has appointed Paul Mitchell, formerly of Sparrows Offshore and Stewart Milne Group, as its finance director.

David McMorris has been appointed to

David Bradley, formerly of Jabil Circuits,

head up facilities, maintenance and environmental at Devro plc, the global producer of manufactured casings for the food industry. He was previously with Tennents.

has joined Tritech International, the provider of applications for professional underwater markets, as supply chain director.

Mandy Haeburn-Little has been Business Growth Fund is a major new £2.5bn equity investment capital fund backed by five of the largest banks in the UK. Duncan MacRae, formerly of Dunedin

appointed executive director of not-for-profit body the Scottish Business Crime Centre. She was head of corporate affairs at TIE and has experience in transport and financial services.

If you’d like to include someone on the move, please email editor@bq-scotland.co.uk

BUSINESS QUARTER | AUTUMN 11

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AUTUMN 11

NEWS

triggering your sense of value

>> Stagecoach in bonanza repeat Stagecoach, the international bus and train group based in Perth, is returning approximately £340m to shareholders in a one-off cash payment – equal to 20% of the current market capital.

At the preliminary results on June 29, the company confirmed that it was completing a review of its capital structure. Shareholders each received 47p in respect of each existing ordinary share. The recorded time for this payment is October 7 2011. Stagecoach’s last major return of cash to shareholders was in 2007 when it returned approximately £700m. Revenues for the year to April 30 were £2.389m. The largest recipient of the cash return will be Stagecoach founders Sir Brian Souter and his sister Ann Gloag, who remain major shareholders.

and delivering even more These days, you expect the very best value for your next event. Stirling Management Centre delivers a conference or meeting package with attention to detail and professional support.

This means you can focus on your subject knowing that your individual requirements are in safe hands and at excellent rates.

At the preliminary results, the company confirmed it was completing a review of its capital structure

The Centre offers over 100 bedrooms, all designed and furnished to the highest standard. 33 conference rooms can host everything from a four person meeting to a 400 delegate conference. First-rate cuisine completes the integrated, one-site, cost effective package that always delivers.

>> Apache flying over North Sea reserves Apache, the largest independent oil company in the US, has agreed to buy Exxon Mobil’s North Sea assets – including the Beryl field – for £1.1bn. The fields have current net production of approximately 19,000 barrels of oil and natural gas liquids and 58 million cubic feet of natural gas per day. The transaction is expected to increase Apache’s North Sea production by 54% and proved reserves by 44%.

The assets include the Beryl, Nevis, Ness, Nevis South, Skene and Buckland fields; operating interest in the Beryl/Brae gas pipeline and the SAGE gas plant; non-operating interests in the Maclure, Scott and Telford fields, and Benbecula (West of Shetlands) exploration acreage.

“These major legacy assets will expand Apache’s presence in the North Sea,” said Steven Farris, Apache’s chairman and chief executive officer. “They bring us significant remaining life, high production efficiency and quality reservoirs – the best North Sea assets we’ve evaluated since acquiring the Forties Field in 2003.

“Over the past eight years, Apache has demonstrated the ability to increase the efficiency of mature North Sea assets, find new reserves to extend field life, and operate in a safe and environmentally responsible manner.”

Since acquiring the Forties Field in 2003, Apache has drilled about 100 development wells and invested nearly £3bn, bringing spin-off benefits to the North East of Scotland.

We look forward to making you welcome.

For brochure or bookings, call Becky Queen on 01786 451712.

Visit us at www.smc.stir.ac.uk or email: smc.sales@stir.ac.uk

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BUSINESS QUARTER |AUTUMN 11

AS I SEE IT

AUTUMN 11

In with the In-crowd Craig McKenna says Scottish start-ups searching for cash should try a new method of funding – based on some smart thinking form the past.

Scottish business start-ups are feeling the pinch in the credit-crunch years; forecasts are gloomy and financial spirits are low. But lo,

BUSINESS QUARTER | AUTUMN 11

what happens when the global markets take a dive? Entrepreneurs, new technology and great new ideas start bouncing around, gaining momentum and catching the public and financial imagination.

Crowdfunding is the new kid on the venture capital block, and it’s set to revolutionise the way businesses

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are born and businesses are grown. It’s not such a new idea, though. Crowdfunding’s roots lie in the old co-operative movement where communities clubbed together to invest for mutual benefit. One of the earliest Crowdfunding ventures was the Irish Loan Fund, set up by famous satirist Jonathan Swift in the 1700s to provide loans to low-income families during famine.

Micro-finance evolved from this in the 1970s

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CrowdCube is run by entrepreneurs for entrepreneurs. It’s a solution to the dearth of finance options available to start-ups and small businesses and has been rapidly adopted for social enterprises. For example, Dr Mohammad Yunus was awarded the Nobel Peace Prize in 2006 for transforming a tiny project – giving $27 to each of 42 women – into the Grameen Bank. The bank now has eight million borrowers, with 97% of the money going to women-operated businesses.

Since then, online businesses have seized the opportunity to raise money for social development, niche and creative projects.

Kickstarter, RocketHub and IndieGoGo are just some of the organisations. And in the UK, there is Sponsume, Buzzbnk, Scottish-based Soloco, and Bloom VC. If you ever fancied yourself as a patron of the arts, the range of investment opportunities are enormous.

You can fund artspaces, musicians, documentaries, films, a soap opera exclusively made for smart phones and the archiving of oral folk tales. The scale of investment can start anywhere from £1 to £100,000, depending on your appetite. You can invest as a Cheerleader, Player, Mover, Shaker, Go Getter or as a Heavy Hitter. The benefits or rewards you receive in return are tailored to please – VIP tickets, discounts, signed copies, site visits, acknowledgements in brochures and film credits.

One Melbourne theatre company recently decided to go all-out to secure its funding last

month: “A private show for you and your own invited audience in your own home!!! We will provide pre-show drinks and canapés. After the show, the director and performers will perform more of your favourite songs and write you a keepsake poem to mark the evening.”

Amanda Boyle, founder and CEO of Bloom VC (Venture Catalyst), says: “The phenomenal growth of crowdfunding is due in no small part to the explosion in use of social media, which means people with great business ideas can reach out to their networks and beyond to raise the funds they need.

“With Bloom they can raise large or small amounts of money without giving up equity in their business and can access that money much quicker than going through traditional routes. It’s a simple, alternative route to business finance.”

These novel ways to fund social and creative ventures are breaking the mould of the social business funding model. However, giving for good is one thing, but giving for profit is another. This is why the crowdfunding platform for commercial companies is a completely different model from the social enterprise one.

When it comes to commercial crowdfunding, it truly is about buying shares and equity in the business with full dividend rights.

So, enter CrowdCube, the commercial crowdfunding company regulated by the FSA and which took more than two years to get through the tight financial regulatory framework.

“CrowdCube is run by entrepreneurs for entrepreneurs,” says Darren Westlake, its chief executive. “It’s a solution to the dearth of finance options available to start-ups and small businesses.”

Since launching in February, CrowdCube has signed up over 4,000 investor members, has

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AS I SEE IT

successfully raised £75,000 for “Bubble and Balm” and is close to completing finance deals for several other exciting young businesses.

I believe that CrowdCube and crowdfunding is the future of seed and early stage finance which is why we recently secured a partnership with CrowdCube to launch the Growth Academy CrowdCube and offer companies in Scotland and the North of England the opportunity to look at crowdfunding as an alternative way to source funds.

The Growth Academy helps companies either at the start-up stage or at the point where they are looking to kick on and grow; both of these stages can need a financial injection in order to allow them to perform the right activities. At the moment, finding those funds has been both painful and a distraction.

It is great knowing that we can now offer assistance.

With Growth Academy’s CrowdCube, by attracting lots of investors who invest smaller amounts of money you can bypass the traditional ways of venture finance. I think it is about bringing cutting-edge knowledge and technology to help the people of Scotland.

Emerging and growing businesses will be better equipped to weather the financial storms as well as outperform their peers.

Providing the crowdfunding platform will help remove the frustration so many companies feel at their current inability to access funds through the banks.

Crowdfunding is effectively the next generation of business investment for start-ups and business expansion.

Entrepreneurs can offer investors the opportunity to pre-purchase their products as part of the incentives for investment.

The Growth Academy’s CrowdCube will also allow budding dragons, family and friends to have an easy way to invest in people and companies that they wish to support. It will be interesting to see which businesses get funded now that the power is with the people. Will they be different from the ones banks and VCs chose?

As they say on the ultimate crowdsourced TV show, Big Brother: “Only you can decide.” *Craig McKenna is owner of the Growth Academy which has secured a partnership with CrowdCube. n

BUSINESS QUARTER |AUTUMN 11

ENTREPRENEUR

AUTUMN 11

A ticket to park and thrive While John McGlynn is still a relatively young, self-made entrepreneur, he has a lot of experience to pass on. He is chairman of Airlink Group which began as a low-cost car parking firm at Glasgow Airport and expanded into real estate, and he has recently joined the board of Scottish Enterprise. Here he talks to Kenny Kemp about his admiration for Jim McColl, and taking his business into the fresh territory with a portfolio of property-based asset management and self-storage companies Scotland’s car park king has always been a prolific student of business. Two-and-a-half years ago, John McGlynn realised he knew very little about private equity, so he booked a flight and a hotel in Boston and enrolled at Harvard Business School for a short course. It was £8,000 well spent.

“What I learned was amazing and I made some good friends, including chief executives of sovereign wealth funds, with billions in every continent,” he says. “It was the best money I have ever spent on anything.”

He was exposed to the teaching of Josh Lerner, the Jacob Schiff Professor of investment banking. He is the guru and the top guy in the field of private equity and how it works on a global scale.

“To get the opportunity to be taught by Josh

BUSINESS QUARTER | AUTUMN 11

Lerner is an opportunity you should not give up lightly,” he says. “I want to go back.”

This awakening, along with informal mentoring sessions with Jim McColl, Scotland’s most revered business figure after his recent deal, has led to the transformation of the Airlink Group into an investment property management business. Allied to this new approach is a move from Paisley into central Glasgow – buying, refurbishing and opening a suite of glass-fronted rooms in a first-floor office in Gordon Street, above the trendy Cath Kidston outlet, and nearer to the movers and shakers.

Paisley-born and raised, McGlynn has always been ambitious for his business and for Scotland. He’s not afraid to air his opinions and is a sounding-board for many of

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Scotland’s leading business agencies. He sits on Alex Salmond’s National Economic Forum and is also an ambassador for Business For Scotland. He has been a proponent of business links between Scotland and the Baltic states and was the brains behind setting up Scotland House in Tallinn.

But his passion for professional learning is deep-rooted. As he was doing his accountancy degree at Caledonian University his mates started working in weekend jobs in the NCP car park at Glasgow Airport. He followed suit and started part-time in 1993.

“This was my exposure to the car parking industry,” he says. “I ended up getting a job for one of the other car park firms and that’s what sparked the opportunity for me.” >>

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ENTREPRENEUR

BUSINESS QUARTER |AUTUMN 11

ENTREPRENEUR The prospect of setting up your own business was an alien concept in Paisley, so he went on to Strathclyde University to do a law degree.

He says: “I’d originally wanted to do law but didn’t get the grades at school, so I had to circumnavigate to do it the squeaky, hard way.”

McGlynn was on his first year of the two-year graduate programme when he was driving through Paisley and almost crashed his car into a bus.

On the back of Renfrewshire bus sitting in front of him was an advert: “Want to start your own business? Come and talk to us at Renfrewshire Enterprise on the New Ventures Programme.”

“So being a daft, naive 20-year-old, I traipsed down to the induction evening and signed up for the New Ventures Programme, which was two nights a week,” he says.

It was the offices of Paisley and Renfrewshire Enterprise, one of the local enterprise company backed by Scottish Enterprise (now a full circle for McGlynn as he is serving Scottish Enterprise’s board).

Here was a team of enthusiastic, young consultants who were running a “get-intobusiness” programme, one of the first of its type. For John McGlynn it was a revelation.

“It was absolutely brilliant and one of the guys who took the course was Alex Paterson, then head of small business development and – since 2010 – the chief executive of Highlands & Islands Enterprise,” he says. “So he has done well. He was a fantastic guy responsible for the delivery of the programme.”

Through this, John – who was still at university, – was able to get a funding package, which was a Small Firms Loan Guarantee Scheme from Bank of Scotland, and a grant from Scottish Enterprise. This gave him the ability to get into car parking.

He saw a site of an acre in size, which said: “Land for let, suitable for hotel or car park”, but it wasn’t big enough.

“Once we did the numbers we came across the first rule of business – unless you have scale and quantum, it doesn’t work,” he says.

But it whet the appetite and he began investigating every potential site near the airport, eventually finding Clark Street in

BUSINESS QUARTER | AUTUMN 11

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Paisley. It was leased with an option to buy after three years. This was the embryonic Airlink.

“Whether you make your own luck in business, I’m not sure, but we got a break,” says McGlynn. “A friend came on the phone saying that Kirsty Wark was doing a television programme and looking for a young business person just starting out for a programme on BBC Scotland called Up Front.”

It was a Monday night prime-time programme comparing McGlynn’s new business and a Big Issue seller. He jumped on the opportunity. Both, according to the show, were entrepreneurial.

The publicity was terrific. Meanwhile, McGlynn was on the other channel making a regular “young person” contribution to a current affairs programme called Trial By Night, an STV programme introduced by Bernard Ponsonby and Kay Adams.

“I used to bring along my law school friends and I could talk for Scotland,” he says. “I got to know Bernard quite well and I asked him if he could introduce me to Katie Wood who presented Scottish Passport, the number one holiday programme in Scotland.”

Her researcher got in touch and the show did a news item about his new, low-cost car parking.

“We offered a deal of a £1 off for every Scottish Passport viewer and we got massive publicity,” says McGlynn.

With great exposure for the car park on both BBC and STV, John McGlynn and his semi-retired father – also John – became busy on the site. The pair drove cost-conscious holidaymakers and their luggage to the airport terminal in a shuttle bus, a Ford Transit. It involved dozens of trips a day, and it soon became full-time. McGlynn decided to switch to a part-time law degree so he could build the business, graduating in 1996.

“All my friends thought I was completely bonkers because I didn’t start drinking until I was in my late twenties,” he says. “I’d have one drink on a Thursday night with my university colleagues, but I had to drive the shuttle bus and keep my head clear for that. It was my livelihood. There were huge sacrifices made, but I took the view that if you’ve made a few quid, you can have all the fun in the

26

world. But you’ve got to do it first.”

It’s said there are only two ways to make money – work hard or strike oil.

“Given that we weren’t anything to do with the oil industry, there was only one option,” he jokes.

A strong working relationship between Glasgow Airport and Airlink has been an important factor, with McGlynn asked to become an “airport ambassador” along with Jim McColl and Chris Gorman.

“They have never seen us as a threat,” says McGlynn. “The airport knows that there are two types of customer – those who are not price-sensitive and want convenience will park as near to the front door of the airport and are happy to pay the premium price. And those, probably in holiday mode and much more price sensitive, because every penny counts.

Recently, they see us as a genuine partner because of the money we’ve invested in our sites with check-in technology, proper lighting and fencing and security. We’ve raised the standard in the industry.”

It didn’t take long before the car parking business had traction. Airlink Group is an umbrella brand with a suite of companies including Airport Park & Ride, Direct Parking, Park Safe and CarParks.com, and now asset management. But, most importantly, it was highly cash-generative and John McGlynn began to think how best to diversify. For him, the one industry that always seemed to do well was property.

He says: “People will question this in recent times, but I still take issue with that. Property is still a great sector to be in, notwithstanding all the current difficulties.”

In the late 1990s, Renfrewshire was enjoying a boom. Commercial property in the greater Paisley area became a central tenet of his strategy, with the money used to buy small plots which were improved and then sold on later to house builders. The proximity to Glasgow Airport was also a major factor.

“Glasgow Airport remains Scotland’s gateway to the world,” he says. “And it will do for the future, given that most of the population is in the west rather than the east. Logic dictates it was a good long-term home for us and, 17 years on, that remains good today.”

Paisley, as a former industrial town with >>

AUTUMN 11

its decaying Victorian mills and warehouses, had plenty of redundant and derelict buildings and McGlynn recognised this could all become part of the airport hub for commercial business – but that it would take time.

“We would have a number of trading entities which would allow us to own property and that strategy worked pretty well,” he says. “In recent years we’ve expanded our horizons beyond Renfrewshire. One of our recent purchases was the Clyde Workshops, out at the M74, a seven-and-a-half acre site bought two years ago from Miller Developments. We have about 40 tenants on that site and there are excellent development opportunities because we’re on the wall of the M74. We like sites that the market doesn’t like.”

One of Airlink’s newest sectors is in selfstorage, massive in the US, which he sees as a massive opportunity for “property-based” trading. In November 2006, Airlink bought the Chivas Tower at Linwood, a 17-acre site, where one of Scotland’s finest whiskies, now owned by Pernod Ricard, was once bottled and distributed. Pernod had purchased the site for around £10m a decade earlier, but values had slumped and John McGlynn offered around £4m.

“We thought a quick clean deal was important for them,” he says. “So we bought the site in a matter of weeks. It was a huge acquisition for us.”

The building was ideal for document storage because it already had £4m worth of palletised machinery for the whisky bond.

“We thought, ‘why can’t we store boxes on the pallets in the big warehouses?’,” he says.

“But what we wanted was the parking space for 2,000 cars close to the airport.”

Then the Malcolm Group made them an offer that they could not refuse, allowing Airlink to sell the building but keep the parking. The idea of document and self-storage was firmly embedded though – this was the future.

“We owned the building for a year and we got a fair price when we sold,” he says. “It’s the old scenario – get in and out at the right time. It was good working with the Malcolm Group and we still have the eight-acre car park. You can’t get all emotional about things.

It’s the old Gordon Gecko phrase about not being emotional about stock. Sometimes we

ENTREPRENEUR

>> McGlynn on...

Edinburgh Airport They think that customers are there just as a ‘cattle’ commodity who can be railed through barriers and charged £1 every time. It is shameful conduct what Edinburgh is doing. I wouldn’t be surprised if BAA sells Edinburgh because a private equity group will come in looking for a trophy asset in Scotland’s capital.

>> on... business and politics There’s a golden rule – which I have fallen foul of and learned my lesson. Business people should leave politicians to do politics, and politicians should leave business people to do business. However, the two groups should interact as often as possible because I think business people have a lot to learn from politicians. There is the harsh reality of an elected politician having to do X,Y and Z and politicians should understand the reality of running a business.

The interaction is critical.

>> on... his passion for travelling People who don’t know me think I spend the entire time going on holiday. Recently I was in New York and people looking at my Twitter updates might think I was on vacation because I had a couple of days off. But I was over there to research the storage industry because the US has the most advanced self-storage facilities in the world.

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>> on... the Entrepreneurial Exchange All good things must come to an end. I’ve been on the board for seven years, having been a member since 1999. I spent one year as vice-chairman with Bob Keiller and it was privilege for me working alongside someone of his calibre on the transition. It was sad to stand down, but I was one of the people who voted heavily for a change in the constitution to revitalise the Exchange. It was unanimous. There are new members coming through the Exchange who are extremely bright and talented. For me, it was time to go.

>> on…

Airlink now We see ourselves as an asset management company. The owner of our new Glasgow office is Airlink Asset Management and we see that moving forward.

We have a portfolio of enterprises whether it is: business park, industrial estates, storage or parking, and each of those has to be managed in the way an asset manager or private equity portfolio would do it.

We’re also open to joint venture opportunities.

>> on...

John Swinney, the finance minister He is someone I have a high regard for his talents and abilities.

It’s comforting having someone like that in charge. He’s brilliant.

We know where we are going with him.

BUSINESS QUARTER |AUTUMN 11

ENTREPRENEUR did get too passionate about businesses.”

The learning point was; everything is for sale at the right price, unless it is really strategic.

“My approach in buying assets is what can we do that others can’t do,” he says. “How can we add value? It’s not rocket science and we are still small in comparison to many others.”

Airlink’s market valuation is around £30m, a dip from the heady days of 2006 when property was on a different planet.

“Our ambition is to grow the market capital, so we buy something for £1m and add value to be worth £2m,” he says.

Airlink is embracing the private equity timescales, so if it buys a car park, it wants to remain in that area for at least five years.

“We’re not into buying, doing something cute and then flipping it,” he says. “We don’t plan an exit but we need to add significant value. In a five- to seven-year period, if we were to exit, there would be a good return for investors.”

In 2008, Airlink was forced to make painful decisions to reduce overheads, so fully automated self check-in at the car parks was introduced which meant a reduction in head-count. Another victim of the credit crunch was a mixed-use, £100m masterplan for Paisley Waterfront which was put on ice.

McGlynn has recently had talks with the council to try and resurrect the plans.

His father, who was a great mentor, died in 2005, although his mother, Margaret, is still working with Airlink and has been enjoying the move from their “rabbit-warren of offices” in Paisley into a prime, open-plan location in Glasgow, and its proximity to the retail therapy in Buchanan Street.

“Moving here will be seen as a tipping point for us in five or ten years,” says McGlynn. “We don’t need all the space right now, but it will be a new badge for us as we build for the future. It was as exciting for me moving into this new office as it was the first week opening the car park.”

So what are John McGlynn’s hobbies? Guess what… it’s still continuing education. While he graduated in law he never finished the diploma in legal practice. He never ticked the box of becoming professionally qualified, so it’s back to night classes at Strathclyde. And, who knows, he might even end up devilling to become a non-practising advocate! n

BUSINESS QUARTER | AUTUMN 11

AUTUMN 11

>> McGlynn on...

Scotland

>> on...

Jim McColl

Scotland is a good place to be doing business right now. The unemployment levels are slightly down but there have been no major widescale job losses.

The Scottish government is still extremely pro-business. The majority government – like them or not – offers a period of stability that we haven’t had since the parliament began.

He has been a friend and mentor of mine for a decade.

I’ve watched with interest his amazing success. The help, advice and the vision he has shared has motivated me. He’s been generous with his time, giving me great advice.

I first met him when he set out his strategic vision at the Exchange ten years ago – we sat there and thought, can this possibly happen? It was so clear. He had a portfolio approach to businesses and how you group them together – and creating value between them.

>> on...

Scottish Enterprise It is interesting and challenging.

I was privileged to be selected.

It is great thing to be involved in and I really love it. It’s ironic that in 1994 if I hadn’t been looking at the advert on the back of the bus and seeing the New Ventures programme, the Airlink Group would be an idea and I’d be practicing law somewhere.

To serve on the board of the country’s economic agency is privilege for me.

>> on... the global economy We have to try and be positive.

The biggest fear is negativity; it creates havoc in the economy.

Yes, there’s lot of bad news but people are working harder to grow their businesses. People ask me, ‘When do I think we’ll be out of the woods?’ My honest reply is the woods are still a long way off and we’re not in the woods.

We shouldn’t be depressed, but realistic. There has been a major press of the reset button and this is the way it is.

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>> on... bank funding We used to get funding from the banks that will not return. 60% is the new 90%. And 2.5 over base is the new one over base.

>> on...

Glasgow Airport “We are now strategic partners with the airport. It is fair to say, the current management team at Glasgow Airport are brilliant.

Amanda Macmillan and her team are the best management team I’ve ever experienced at the airport. They have a clear vision of what they want to achieve and they execute it well. They treat their customers with courtesy and respect – they put passengers first. You can tell that by the way they have invested. It might be stainless steel bollards but they are amazing. Frankly, it’s never been in better hands.

AUTUMN 11

INTERVIEW

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LIFE IS A COLLECTION OF EXPERIENCES LET US BE YOUR GUIDE BUSINESS QUARTER |AUTUMN 11

SUCCESS STORY

AUTUMN 11

Let’s get this show on the road

Scottish Opera is an unlikely industrial operation – but from its divas and orchestral musicians, through to its costume-makers, set designers and rehearsal halls, it is a major undertaking. With core funding from the Scottish Government, it relies on the excellence of its touring performances and a cohort of generous patrons to keep the art form alive – and exciting new audiences. Kenny Kemp meets the man who savours this balancing act

BUSINESS QUARTER | AUTUMN 11

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AUTUMN 11

Alex Reedijk has a starring part to play in Scotland’s cultural life – but his directions are off-stage. He is the New Zealand-born General Director of Scottish Opera, a national jewel of a company founded by Sir Alexander Gibson 50 years ago.

Last season the opera company enjoyed one of its best ever years with audience numbers dramatically up, more under 26-year-olds dipping their toes into the music, an “Emerging Artists” programme with young Scots performers in partnership with the Royal Conservatoire – and even a debut at T in the Park. So what’s this got to do with hard-nosed business?

Well, Scotland’s creative industries, in all their guises of music, film, theatre, drama and that ilk, support 60,000 jobs and generate a staggering £5.2bn for Scotland each year. So leaving the running of any major cultural organisation in Scotland to part-time luvvies and well-meaning amateurs is no longer applicable. If Scotland’s major creative organisations are to survive, they require rigorous business organisation – which is where Alex Reedijk fits in.

He arrived to run Scottish Opera in 2006. It was an organisation that – it is fair to say – was in financial disarray with intractable personnel issues. It urgently required a strong dose of business reality and firm handling.

Reedijk’s task was to deliver this, without destroying the inherent cultural fabric of a top flight organisation – a tough balancing act.

He was no stranger to Scotland. In 1990, he was a twentysomething Kiwi working at the Assembly Rooms at the Edinburgh Festival Fringe. His friend, Chris Doig, director of the New Zealand Festival, told him it was his “duty” to return home and help the festival.

He went on to became chief executive, re-establishing its status. He was headhunted

by NZ Opera, which was in the process of

SUCCESS STORY

All the world’s a stage, and all the men and women merely players: They have their exits and entrances; any one man in his time plays many parts.

William Shakespeare, As You Like It.

being reformed and so he became general director of NZ Opera. He attracted attention and was then approached by Scottish Opera.

“Never, in my wildest dreams, did I think I would get an invitation to run one of the five major opera companies in the UK,” says Reedijk, a six-footer who now loves family life in Glasgow’s West End. “But I was encouraged to apply because of my experience working at government level and I was seen as someone with entrepreneurial experience.”

He stepped off the plane in February 2006.

“I arrived at an organisation that was demoralised by the restructuring but its heartbeat was still strong and true,” he says.

“Tony Hall at the Royal Opera House in London declared his aim was to take the opera out of the news for the dumb stuff, I thought this is what I should do in Scotland – take us out of the news for all the negative dumb stuff unrelated to our artistic work.”

“We had to take responsibility for ourselves, delivering as much value as we could for the taxpayer and try and excite and delight our audiences,” he says. “My job is to deliver as many opera adventures as possible.”

Up until 2004, Scottish Opera had spent 15 years accumulating debt. It was running at a regular deficit. But it hit the buffers in 2004, when all hell broke loose. It was fuelled by a culture of entitlement that said, ‘We’re a national opera company, and we need more

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money’. There were numerous heated debates about why Scottish Opera deserved such a huge proportion of Scotland’s cultural budget.

There was a full-time chorus that wasn’t fully employed, so this needed to change. It was painful, but it was necessary.

“You are always going to need the appropriate level of investment for a national opera company. The problem was that it was being funded by the Scottish Arts Council and our funding was a high proportion of their overall funding, which led to certain pressures.”

In April 2007 Scottish Opera moved to being directly funded by the Scottish Government and Reedijk says: “I think the whole thing has settled down enormously.”

He has instilled a culture of “living within its means”. He admits this might have been a mundane perspective for a grand opera company but he points to Sir Alexander Gibson’s vision to set up the opera in 1962, when its inaugural production was Madame Butterfly at the King’s Theatre in Glasgow. It was after this that Elmbank Crescent became the head office. He sees his role as a custodian to ensure its survival. In 1974 Scottish Opera bought the Theatre Royal in Glasgow which became its home, and is now about to be renovated and improved thanks to a neat property deal when Andy McKinlay from Ediston Properties agreed to help the opera.

“My job is to mind the ship that Alex Gibson set on course 50 years ago. All those folks around Scotland, who have invested, through being our Friends, benefactors and patrons and our loyal audiences, coming to our shows, need to know that we will continue to produce great operas. My job is not to bugger it up for them. My job is to listen to what they want from us and deliver that. At the same time, we must be financially coherent.”

This meant turning fixed costs into variable costs. In an increasingly tougher financial >>

BUSINESS QUARTER |AUTUMN 11

SUCCESS STORY climate, Scottish Opera had to mind its money.

It has also meant utilising the specialist skills in sets and scenery making, in custom design to bring in extra streams of revenues from other companies and productions. This has allowed the workshops to offer full-time work and bring on a new generation of Scots with vital back-stage theatre skills.

Scotland’s five national performing companies: Scottish Opera, Scottish Ballet, the National Theatre of Scotland, the Royal Scottish National Orchestra and the Scottish Chamber Orchestra, between them get £24.5m a year, with opera getting £8.7m of this pot. This is core funding to produce four main-stage operas per year to be toured to the four major Scottish cities, wider touring on a smaller scale, and education and outreach.

“It meant that all five companies had stable leadership and their balance sheets tidied up,” says Reedijk. “This was the 21st century and the question was how were we going to live in it and behave in it?”

It wasn’t purely about the money. There was a culture within Scottish Opera which was highly corrosive and elitist. That has changed. Alex Reedijk says Scottish Opera has come the furthest in collaborating with the other Scottish national companies – and is instrumental in the creation of a creative hub in Maryhill, where the National Theatre of Scotland is now close by. He points to the Emerging Artists programme, which include Marie Claire Breen, Ross McInroy and Shuna Scott Sendall, as talent that has been nurtured in partnership with the Royal Scottish Academy of Music and Drama, now the Royal Conservatoire of Scotland.

“This has given young singers an avenue to join a major professional touring company and gain the vital experience to take them to the next level of their careers. That wasn’t happening a few years ago.”

Does Scottish Opera now see itself as more business aware? With its board of directors including several prominent business figures, including chairman Colin McClatchie, former head of News International in Scotland, this was increasingly likely.

“Working with creative and artistic people is probably no different to working in a factory or a bank,” he says. “Yes, in many respects

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people are highly creative, but as an opera company where everything has to be organised so far in advance, we are a ‘quietly organised’ organisation. One that is quietly organised is one that is financially stable.”

He says the more last-minute decisions are taken, the less you are in control and the more liable to incur unexpected costs. Long-term planning is at the heart of the opera.

“Generally speaking, we just tick along.”

If Alex Reedijk and his music director Francesco

What I have done is to provoke in people the willingness to be more flexible Corti asks someone such as Scotland’s singing star Thomas Walker to be Count Almaviva in the forthcoming The Barber of Seville production, this involves ten weeks of work: five weeks in rehearsal, then performances in Edinburgh, Glasgow, Inverness and Aberdeen.

Asking a sought-after performer to clear their diary for such a spell means that booking them well in advance is vital.

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“There is every chance that a top performer could be booked two years down the line for an uninterrupted ten-week run,” he says. “We have to book far in advance because we want the people but we also want the theatres to be available.”

Opera projects also involve research and development, with sets, scenery, costumes, props, and are large-scale – involving up to 70 people on tour – so it can’t be rushed. “You have to take your time. Unpick the project.

You’ve got to sit down and figure out if you can afford it. Then put it all back together again and get on with it.”

Each major production costs between half a million and £1.2m to put on and take around Scotland, depending on chorus and orchestra size. The annual turnover is around £11m with £8m from the public purse.

It is a mechanistic and, at times, industrial process, with four or five projects all at different stages of development. A tour of the Edington Street Production Studios at Maryhill gives a fascinating insight into the grand scale.

Upstairs, John Liddell, head of costume, himself a former suit maker, has his academic work room crammed with books, pictures and costumes, and works alongside his team of costume makers and wardrobe supervisors, with their sewing machines and massive scissors; while downstairs Mark Harrod, the workshop manager, is directing the design for a massive one-off prop, including a carpenter finishing a stage clock which chimes on the hour with a skeleton for The Rake’s Progress.

Next door in a large hall, Kelvin Guy is the head scenic artist, painting a vast backdrop of canvas covering the whole floor, ready for the forthcoming production. Everything is tailor-made. Add to this the technical operations, electricians and lighting people, and the opera planners who manage the touring and arrange the transport, and it feels like a medium sized enterprise at work.

But Reedijk also wanted to change the artistic offering. He began his career as a stage hand working for New Zealand Opera in the 1980s.

“They went bust because they were putting the wrong repertoire in front of the audiences,” he says. “This was a seminal thing for me. You have to have a ‘balanced basket’ of the favourites, with two of the four core

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productions from the top 15 of operas. But you can’t do all Rossini or Mozart.”

So the works are recycled on a seven-year cycle, which means the top 15 will be covered; this season it’s The Barber of Seville and Tosca.

One other per season is a well-known composer and a lesser-known work – such as Stravinsky’s The Rake’s Progress – and the other a lesser known composer and work, such as Engelbert Humperdinck’s Hansel and Gretel. This remains the rationale.

Reedijk wants Scottish Opera to try out as many good ideas as possible, but he felt that there was a need to look beyond the obvious.

He felt he required some external support. So when Accenture, the global consulting and technology company, knocked at his door inviting Scottish Opera to pitch, Reedijk was keen to hear how the two organisations could work together.

“We got the opportunity to present to them in July 2007 but I was off on holiday. But my one little idea was that we needed to present to them in the Festival Theatre in Edinburgh. They needed to see what our core business was. But I thought we should surprise them with some singing, because that’s what we do best.”

So in the middle of vice chairman John McCormick’s presentation the door opened and one of the stars stepped into the room and does an aria from the Barber of Seville.

Reedijk says: “It’s my understanding that this blew them away, but what I was trying to do was demonstrate our versatility and our ability to surprise and delight.”

While Accenture has over 200,000 people working worldwide in 120 countries, it had a low profile in Scotland, so working together was of mutual benefit.

A sponsorship deal with Scottish Opera first began in 2007 with the initial investment involving a mixture of cash and in kind support over three years. The project operated under Accenture’s “intelligent funding” model, the sponsorship pioneered a new kind of partnership between an arts organisation and sponsor in Scotland.

Scottish Opera’s ambition was to function as a 21st century sustainable arts organisation, in parallel to growing artistically, and this has been actively supported by a close relationship with Accenture.

SUCCESS STORY

Accenture has injected its expertise to redesign the website, and assist the opera company with high level strategic business planning. For Accenture, the sponsorship marked the beginning of a period of growth for the management consulting, technology services and outsourcing company.

“The sponsorship of Scottish Opera was identified as a high profile means to demonstrate Accenture’s commitment to Scotland and it has been extremely successful

Where to catch Scottish Opera this season n Orpheus in the Underworld, on tour across Scotland until 22nd October. n The Barber of Seville, Theatre Royal, Glasgow, from 21st October (five performances); Eden Court, Inverness, 3rd November (two performances); His Majesty’s Theatre, Aberdeen, 10th November (two performances); Festival Theatre, Edinburgh, 15th November (three performances). n Hansel and Gretel, Theatre Royal, Glasgow, from 4 February, (four performance); Festival Theatre, Edinburgh, 14 February (three performances). n The Rake’s Progress, Theatre Royal, Glasgow, 17 March (four performances), Edinburgh Festival Theatre, 27 March, (three performances). n Tosca, Theatre Royal, Glasgow, 3 May (five performance); Eden Court, Inverness, 17 May, (two performances); Festival Theatre, Edinburgh, 23 May (five performance); His Majesty’s Theatre, Aberdeen, 7 June (two performances).

for us,” says Bill McDonald, managing director of Accenture in Scotland.

“By directly supporting Five: 15 Operas Made in Scotland, Accenture enabled the artistic development of the company through the creation of new opera, presenting a 21st century face to its audiences and helping to build opera muscles amongst practitioners in Scotland.”

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Reedijk acknowledges that the format of Five:15, which is five newly written operas, each delivered in 15 minutes, has given new talent a platform.

“With Accenture, we felt there was a lot of mutual strength that we could get from each other,” he says. “They have helped us massively with the redevelopment of our website and our revised brand identity. But there is the mentoring that Trevor Hatton and Bill McDonald have provided to our senior team. It’s been a happy and symbiotic relationship.”

McDonald agrees, saying: “Scottish Opera has proved itself to be innovative and willing to listen and learn from business enterprise. For us, it has been a very rewarding partnership and it is extremely satisfying seeing Scottish Opera going from strength to strength, knowing that even in some small way we have helped.

“Our staff and clients have also seen some fantastic opera productions – an experience which many may not have otherwise enjoyed.”

Reedijk is keen not to overstep the mark and cross into the artistic realm.

“In some respects, I don’t think I’ve made any changes here at all, except what I have done is provoke in people the willingness to be more flexible. We made great shows before we went bust, we just couldn’t figure out how to pay for them. Now we make great shows and we know how to pay for them.”

Scottish Opera, under Reedijk’s direction, appears a place more at ease with itself. The drama is now firmly back on the stage – and not in the opinion columns. The season ahead looks exciting with productions of The Barber of Seville, Hansel and Gretel, The Rake’s Progress and Tosca; visits to Aberdeen, Edinburgh, and Inverness, and Orpheus in the Underworld touring to smaller venues all over Scotland. The A-listed Theatre Royal is to receive a stunning new extension to improve its front-of-house and public spaces in an £11m project in time for the Commonwealth Games in Glasgow in 2014.

So what is Reedijk’s favourite opera? Is he a Rossini or a Mozart man? Diplomatically, he says: “My favourite opera is the one that we have on stage that night.” n

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ENTREPRENEUR

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‘and away I went’

Simon Howie is an iconic Scottish brand. While his fillet steaks and prime beef are well-known in supermarket chill cabinets, he is also a serial entrepreneur, immersed in a range of businesses, many connected to his farming roots. Kenny Kemp travelled to his base at Dunning in rural Perthshire to meet him >>

BUSINESS QUARTER | AUTUMN 11

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ENTREPRENEUR

I played the accordiaon from an early age. It wasn’t just for fun. I take it very seriously. It gave me a more rounded approach to my business

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BUSINESS QUARTER |AUTUMN 11

ENTREPRENEUR

In farming parlance, Simon Howie is best of breed across a number of classes. In his business life he is one of Scotland’s most prodigious business figures, but he’s also fiercely proud of his rural Perthshire family roots and is one of the country’s leading Scottish dance band musicians.

He is a tall, quietly-spoken Scotsman, who displays a certain reserve and seriousness when talking about his multiple business enterprises, but lightens up and relaxes more when talking about accordion music and the great names of Scottish dance music such as Mickey Ainsworth, Jim Johnstone, Ian Powrie, Jimmy Blue, Bobby McLeod and Jimmy Shand.

But while dance music is his passion with its myriad jigs, reels, marches and waltzes, Simon Howie is far better known as an awardwinning Scottish entrepreneur who is – if you excuse the awful pun – outstanding in his field.

The picturesque Perthshire village of Dunning has just celebrated its 500th anniversary as a Scottish Burgh of Barony. Nine miles from Perth and five miles from Gleneagles Hotel, it is a tight-knit and prosperous community steeped in its history and its symbiotic connection to farming, trading and the land.

This ingrained sense of place might explain

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something about the success of Simon Howie, whose immaculate home farm at Findony – with his personal helicopter in a fallow field – is on the outskirts of town. Howie was born in neighbouring Millhouse farm, a smaller 130-acre mixed farm run by his father, Angus Howie.

In December 1986, 19-year-old Howie was learning his trade in Rattray & Son shop in Perth.

“I was working as an apprentice butcher and decided that I wanted to start my own business,” he says. “So I got cracking with that. I bought a small old Co-operative shop in Dunning and set up.”

The shop cost £2,400 and he kitted out with £2,000 that he had saved in the bank. Then Howie uses one of his catch phrases: “And away I went.”

He was given a week’s credit from a meat wholesaler, which he paid the following Monday, and got some more meat.

“That’s how Simon Howie the Scottish Butcher started,” he says.

Today his various business interests have a combined turnover of around £40m.

His first employee, Jim Park, who started in May 1987, is still with the company today, a fact of which he remains very proud. The tiny

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butcher’s shop then started supplying hotels and restaurants. However, the holy grail locally was getting a foothold into the internationally renowned Gleneagles Hotel.

“I knocked on their door many, many times, but I was always turned away,” says Howie.

“They didn’t see the need for a ‘local yokel’.

One night I was going back home to my folks’ farm and there was a guy trying to get the wheel off his car.”

Simon Howie, now 44, is a practical, sleeves-rolled up kind of person. So he stopped, offered to help and went back to the farm for the right tools.

“It turned out he was Colin Bussey, the head chef at Gleneagles.”

A few days later he went and knocked on his door again. The result; for the next 23 years he supplied Gleneagles with all their meat. It was a fortuitous meeting because Bussey eventually worked with Howie helping to change the way luxury hotels source their cuts of meat.

“That’s how we got in the door,” he says. “As the chefs at Gleneagles moved around I picked up other hotels such as the Old Course in St Andrews and the Turnberry. Away we went!”

The village shop model was working well, so Howie bought another shop in Auchterarder and one in Dunkeld, and eventually had four shops which he described as “concentric” growth, with the shop supplying the local hotels and restaurants. But the Simon Howie story is all about grabbing relevant opportunities when they present themselves, so he bought a laminated panels business in 1991 which undertook shop-fitting.

“I was buying panels for my shops and I felt it would be better if I could make them myself. So I started a company called Shore Laminates.”

The fledgling company rented a dingy old factory in Perth and kitted it out.

“Away we went! Business went from strength to strength. We have about 50 people working there now.”

There was a lot of rebuilding work in the 1990s. The Scottish Office in Leith, the refurbishment of international terminals at Glasgow and Edinburgh Airports, new offices at Scottish Provident and Standard Life – all these companies required fit-outs and Shore

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ENTREPRENEUR

Within 15 minutes of seeing our shops, Sainsbury’s said, Go ahead and take Simon Howie into all of our Scottish stores was well placed. The laminated products were sold to companies doing the fit-out.

“We were fabricators of the product and companies, such as Havelock Europa, or Thomas Johnston would buy from us,” says Howie. “It was the same way as a baker makes pies.”

The laminated business was split into commercial, with schools, hospital and hotels, and domestic – bathrooms, wall panelling – under two brands. It would remain an important part of the Howie business empire.

In 1995, he bought Rattray & Co in Perth, where he began as an apprentice. It went on to become the top butchers in Scotland for three years running, then the best in Britain.

According to Howie, the key to this was one special individual called Gary Conacher.

“He is absolutely brilliant,” he says. “There is a common thread through my whole business career there are certain individuals and events that have happened. They have completely and utterly changed the course of my business. Gary came to my food business and took it by storm. He’s helped me grow the business to where it is today. He’s a brilliant individual and a great motivator.”

Scotland’s top-class hotels were building their international reputations for the quality of

their food, and this brought an interesting change in chefs’ ways of working. Instead of spending hours preparing cuts of meat, they were spending more time cooking and improving the quality of their menus.

This presented Simon Howie with a new opportunity.

He says: “We looked further down the value chain and decided to concentrate our efforts on to pre-prepared, chef-ready products, rather than selling them whole chunks of meat that they would prepare themselves in-house.”

For Simon Howie – now supplying 200 hotels and restaurants on a daily basis – the ready-to-eat, ready-to-cook range of products became a significant part of the story.

In 1995, he bought the 400-acre Findony Farm in Dunning, knocked down the old steading and built a factory for state-of-the-art meat production. The carcases arrive from selected abattoirs around Scotland, and they are cut, trimmed and every part of the animal is used for consumption. He increased the factory size to 60,000sq ft with two divisions; chefprepared products and red meat.

“We asked ourselves how we could leverage this,” he says. “We have this factory based in this very nice rural location; how do we ramp that up and make it really stand out

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from just another run-of-the-mill food preparation company?”

“During the process of building the new factory I started up a company called Rossco Properties and Greenfield Homes, one to do commercial property and the other housebuilding. All the money I was making in my laminate business and food production I was ploughing back into buying brownfield sites. They were pretty poor sub-prime sites where I could build bog-standard basic sheds.

I was buying land that I could invest in once I’d bought it.”

Again Howie’s hunch worked. He found a niche in the market for smaller businesses which wanted cheap property at £3-£5 a square foot – workspace that was basically something to keep the rain off. He now has 1.5 million square feet of basic, low-rental leased space across the UK, including Manchester and the North-West of England, and 300,000sq ft at Grangemouth docks which is used as a whisky bond.

“We’re debt free on this,” he says.

Greenfield Homes built more than 100 houses before Howie made the decision that house building wasn’t going to be part of his continuing portfolio. He admits he found it too much of a hassle.

“We built a lot of nice houses, but it’s definitely not for me,” he says. “In the same way that commercial vehicle dealers don’t sell cars, customers are very fickle. They complained about things that weren’t important to me and I felt I wasn’t on the same page as the customer. I made a decision to work with commercial users, rather than domestic home-owners.”

Back on the food front, a major breakthrough came in 1999 when Sainsbury’s ran a supplier development programme with a dinner in Edinburgh on the final day. By chance, Simon Howie ended up sitting next to the chief executive Peter Davis and alongside his deputy Stuart Mitchell, who later became managing director of the supermarket chain. Howie grabbed his opportunity.

“Your meat counters are not as good as they should be for such a leading supermarket group,” he told the pair. They nodded their heads in agreement but said they were struggling to know what exactly to do >>

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ENTREPRENEUR with it. Simon invited them to see his shops.

“I said, ‘If you give me the meat counters to run, I’ll make them better – by a long shot.’

“Fair play to them, the following Saturday they flew up from their Holborn HQ and I picked them up at the airport. Within 15 minutes of seeing our shops they said, ‘Go ahead and take your Simon Howie brand into all of our Scottish stores.’ There was no real contract; just a handshake.”

This was a watershed deal for the business and he recalls hearing of the World Trade Centre attacks on September 11 2001, while arranging the cuts of sirloin as he set up the “Simon Howie” branded butcher’s counter in Blackhall in Edinburgh.

“We doubled the meat turnover overnight, supplying all the meat products over the counter,” he says. “It let Sainsbury’s and ourselves realise how big a prize there was in this sector. We worked well together.

Sainsbury’s were very entrepreneurial and eventually they said, ‘Thanks a lot, we can do this on our own now.’ I moved on too.”

For Simon Howie the brand, it raised the profile among the competing supermarkets which realised they too had to improve their presentation and display at the meat counters.

Now Howie could engage with Tesco, Asda and Morrisons and they knew and understood what he was doing.

“It took us into a different league,” he says.

“We realised that the way to sell food in the UK to the masses was to pre-pack and get it on the shelves. Getting onto Sainsbury’s counters allowed us to get into this market – without that we would not be where we are today as a food company.”

For Simon Howie it was all about relationships with multiple retailers who had heavy footfall and building a brand, which was developed in-house by marketing graduate Emma Loftus – still with Howie. The brand tools were; tone of voice, the look and feel of the product and the colour scheme for packaging.

“We worked very hard to get this right,” he says. “We built a perception that the business was perhaps an artisan small food producer, with a 100-year old heritage that stretched back to my grandfather, who started it all.

Actually, we are none of those.”

This brand building was transferable and

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Howie turned his attention back to the laminate business.

“We wanted to push this so that other people could sell our products in either specialist bathroom showrooms or in the mainstream DIY chains, such and B&Q,” he reasons.

“While you give some of the margin away, the opportunity to grow the business is bigger.”

WetWall – the biggest selling shower panelling product in the UK – and Splashwall, while essentially the same product, were both created to serve different segments of the bathroom market. Recently Mermaid Panels, where Howie is chairman, invested a further £1.5m in production line technology for waterproof wall panels.

When he pulled out of house-building in 2001, he created Shore Recycling. It was a chance meeting with the fridge engineer who told him he needed to do something about CFC gases in the fridges because there would be a problem getting rid of them.

“The fridge engineers keep my fridges going in the factory,” he says. “I asked what was going to be done about domestic fridges and he said: ‘No-one really knows.’ I looked into it and found that the UK government had signed up for an EU directive to prevent CFC gases going to landfill – but found out there was no solution.”

Simon Howie went to Leipzig, Berlin and Munich searching for a recycling machine that could deal with the gases. He found one, ordered it and started speaking to Scotland’s local authorities, signing up 31 of the 32 councils into long-term contracts. The fridges

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started to arrive en masse. By the time the first machine arrived from Germany, he had it paid off and £600,000 in the bank.

“It was like winning the lottery,” he says. “We had 50 people working in the plant in Perth.”

Two key individuals arrived – Tom Liddell and Malcolm Todd, a former marketing director from Glenmorangie who became managing director and ran it like a marketing business.

“I decided that the business was making £3m a year profit in the second year. I wanted to sell it but there was no appetite to buy, so I got RBS to help Tom and Malcolm buy a good slice of the business. Over the period of the next four years, the guys paid down the debt and we ended up with the company debt-free.”

A fire was a major setback but the insurance payout helped rebuild one of the best recycling plants for fridges and televisions (taking in 10,000 monitors a month) in Europe. More stringent EU directives meant anything with a plug and battery had to be recycled – which turned waste into a lucrative business. It all went into a massive food-type blender which separated the parts and turned the raw materials into a mulch. Shore Recycling was eventually sold to Viridor Waste Management, part of the Pennon Group, for £23m in March 2008.

“There were a number of reasons why it was good to sell,” says Howie. “We were all in the mood for a sale at that point. It had been a very intense and tricky five years, but enjoyable. Viridor have gone on from strength to strength, so it was a good buy for them.”

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Simon Howie then bought two more laminate businesses which were major competitors at the time and purchased Calport, a shipping and handling stevedoring business at Perth harbour, which he runs with brother Angus, who runs the local haulage and distribution company.

“We bring in bulk cargoes and store them, including animal feed, fertilisers and salts,” says Howie. “We take timber from Scandinavia. There are not many inland ports like Perth so it’s an opportunity to bring goods in.”

He also bought a 500-acre farm in Tain which also helped in the supply of animals for premium beef. With such success, did he ever consider taking on bank debt to grow the business?

“If I took the truth drug, there was the chance that I could have geared up and done a bigger deal during the good times,” he admits. “And I might have been sitting here saying, ‘Why did I do that?’”

In 2008, Howie also created Shore Energy with three sites going through local planning, turning waste into energy. At times, this has been contentious in places such as Monklands.

“It’s a process of stripping the waste and taking the bio-mass out and converting the bio-mass to energy,” he says. “It’s a pyroliser which turns the waste into a gas. There is no combustion; it is not an incinerator, as some

ENTREPRENEUR

campaigners have claimed. It’s a clean, proven process called gasification.”

Howie’s wife and family are an integral aspect of his life in Perthshire. His grandfather was one of a family of 13, born in 1886, and went off to Canada, worked on the Hudson’s Bay trading company and made enough money to come back and buy the farm. Simon’s father and mother Dorothy instilled in him a conservative work ethic, although they were entrepreneurial.

“I was lucky to have parents who spoke to us,” he says. “I have two brothers, Angus and Norman, and we are a good working unit.

They have their own careers and I’ve done my own thing from an early age. But our parents, crucially, spoke to us and told us about the workings of a business as well as life in general. We watched how they went about their lives in terms of speaking to people – how they treated staff and colleagues, how they dealt with finance, their reluctance to take on debt. All of these things are inherent good business principles.”

Howie’s mother was a nursing sister and the family had some holiday cottages in the village let during the summer to visitors.

“She would finish her work and then in the evening go and clean and tidy the houses for the holiday lets,” he recalls. “She would spend the evenings writing confirmation letters to Holland and Belgium for the guests. In one

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year she was able to earn enough to buy a brand-new baler for the farm!”

Farming was Simon Howie’s love, but it was obvious three brothers were not going to get a living out of a 130-acre farm.

“The adage was; if you’re not going to be a lawyer or a doctor, go and get a trade,” he says. “The meat trade suited me and it was easy for me to be a butcher.

“What I remember about my training was the camaraderie and the fun I had as an apprentice in a shop with 15 people. It was a fantastic part of my early life; I was the young lad in the shop. I was well looked after.”

It would be remiss not to come back to his music. In the early years he made 50% of his income as a Scottish dance band leader, playing ceilidhs, weddings, and appearing on the BBC Scotland’s Take The Floor radio show.

He has family connections with the legendary Ian Powrie, who now lives in Australia and is in his 80s.

“He was the Govn’r in my eyes,” says Howie.

“He took the music by storm in the 1960s. I played the accordion from an early age. It wasn’t just for fun, I take it very seriously.

I was travelling the country and abroad and getting a wider appreciation of what was going on. It gave me more of a rounded approach to my business.”

He says it was about being in the right place and often appearing bigger than he actually was in the early days. He started-up companies because he didn’t have the cash to buy them.

He acknowledges he’s had a lot of advice and informal mentoring, and his involvement with the Entrepreneurial Exchange has given him access to some of Scotland’s best business brains. He’s also keen to help others who are starting out.

“I’ve had 25 years’ experience, in hand-tohand combat,” he says. “Even today I’m much more comfortable with start-ups than writing people big cheques to take on their business.”

Today Simon Howie’s food business employs 120 people in Perthshire, the laminate firm has 150 staff, while among the other businesses there are another 50 employees. Simon Howie has done all this with remarkable energy, passion for his products and commitment to quality. He is certainly one of a rare breed of enterprising Scots. n

BUSINESS QUARTER |AUTUMN 11

COMMERCIAL PROPERTY

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Offers for deaf school listened to, Mint Hotels worth... a mint, oral contracts get official, property performance weakens, brewery site on the market and Loch Lomond is attractive to developers

>> Architectural icon close to purchase deal Buyers are closing in on one of Scotland’s finest buildings – the former Donaldson’s Hospital for the Deaf site at Haymarket in Edinburgh. The fabulous A-listed building – designed by William Playfair and completed in 1851 for Sir James Donaldson – is one of the capital’s most iconic buildings, but it has been empty for some years, a victim of the credit crunch. Now Savills, the selling agents, are close to securing a deal – likely to be in the £40-60m bracket – to turn it into luxury apartments. But at the time of going to press with BQ they were unable to give any further details.

>> Hotels worth a Mint Good mid-range hotels look to be back in vogue – especially in the UK’s hottest tourist destination cities. Mint Hotels, the eight-strong chain founded by Sandy and David Orr and Donald MacDonald, has been sold to private equity company Blackstone.

The sum was not disclosed, but reports have suggested that Mint was expecting to achieve a price tag of around £600m for the business.

The deal is one of the biggest in the hotels market in Europe since 2007 and a feather in the cap for the seasoned Scottish trio of Sandy and David Orr and Donald MacDonald. Sandy and Donald set up as City Inn in 1995 with Bill Crerar, with the first hotel opening in Bristol in 1999.

BUSINESS QUARTER | AUTUMN 11

The hotels were all new-build properties developed by the company and most were jointly financed in a deal with Uberior Ventures, which was part of the Bank of Scotland (now Lloyds Banking Group). Some £450m worth of loans from Lloyds Banking Group were due to expire next year.

David Orr, co founder and chief executive of Mint Hotel, said: “After nearly 16 years spent building Mint into the brand that it now is, a transaction has been agreed that gives the business a new future. We have a fantastic team of more than 1,500 employees who have worked tirelessly to deliver the outstanding level of service that our customers deserve.”

“In Blackstone, the business now has a global investor with a strong and expansive track

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record in the hospitality sector. We feel confident that they will continue to manage the hotels in a manner that is true to its business identity.

Executive chairman Sandy Orr said: “Despite the headwinds in the economy and turmoil in the financial markets we have created from scratch a substantial business that has created many jobs and returned exceptional results to our former financial partners.

“We have cherished this business since its inception and we wish everyone well going forward.”

Nigel Moss, managing director of Uberior Ventures, said: “This large-scale transaction marks a great outcome for stakeholders reflecting a highly successful and market changing rollout strategy. Everyone at Lloyds Banking Group wishes the founders of Mint, the employees and Blackstone well as the business moves on.”

>> Fit for purpose The Gym Group has announced plans to open a flagship gym in the heart of Glasgow’s city centre. The low-cost gym operator which offers low-cost memberships, is to launch its first Scottish operation at 167-201 Argyle Street in part of the building formerly occupied

by Woolworths.

The Glasgow gym is likely to open in early 2012 and will be open 24 hours a day, seven days a week, kitted out with 170 pieces of state-of-the-art gym equipment, changing rooms, lockers, toilets and shower facilities.

Stuart Moncur, at Cushman & Wakefield, acted for the landlord Redevco, said: “The Gym Group has been seeking to acquire a number of flagship locations across Scotland and this building on Argyle Street in Glasgow meets its specific criteria.”

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INTERVIEW

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FOR BUSINESS

• Grade A office space in a prime location

• A mix of conversion and cutting-edge new build apartments

• Stunning retail space available from 378 to 4,779 sqft

• Striking foster + partners design

• 1 to 4 bed properties including breathtaking penthouses

• Situated in the heart of a thriving development

• Prices start from just £180k

• Already home to Sainsbury’s, Pure Gym, Peter’s Yard and Starbucks

• Pre-letting incentives available • High specifications tailored to your needs

With its unrivalled city centre location and a mix of commercial, residential and retail space, Quartermile is more than just an exciting new development. It’s the new heart of the city.

Find out all the possibilities Quartermile offers today

0845 000 2525 www.qmile.com Visit Lauriston Place Marketing Centre EH3 9AU – open 7 days

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BUSINESS QUARTER |AUTUMN 11

COMMERCIAL PROPERTY

AUTUMN 11

>> Act clear on oral contracts

>> Central Quay unlocks city potential

A striking vision of a prestigious riverside business park has been unveiled in Glasgow.

Goodman, the UK’s leading business park developer, has launched its masterplan for the next phases of office development at the Central Quay Business Park on the banks of the Clyde.

Located within Glasgow’s International Financial Services District, near to the Kingston Bridge, Central Quay combines all the advantages of a high quality business park with a city centre location.

Goodman appointed architectural practice Keppie Design to review the masterplan and development proposals at Central Quay last year.

The result is a flexible masterplan, offering

>> Buy yon bonny banks Walker Group has announced the conditional sale of a further 11 acres of land at the £100m Lomondgate mixed-use development near Loch Lomond in West Dunbartonshire.

Taylor Wimpey has agreed to acquire the parcel of land and has lodged a planning application with West Dunbartonshire

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large floorplate buildings which could range from 30,000 to 250,000sq ft and suited for medium to large companies moving to new-build offices in the city.

The 11-acre business park, which is owned by the Arlington Business Parks Partnership, and managed by Goodman, is already home to Association of Chartered Certified Accountants; GE International; NHS Scotland and the Scottish Daily Record and Sunday Mail.

Joint letting agents at Central Quay Business Park are Ryden and DTZ. Ewan Cameron, Managing Partner at Ryden, said: “Central Quay has fantastic potential for occupiers looking to relocate to an exceptional central location.”

Council to build 110 family homes at the development which is one of Scotland’s most ambitious regeneration projects. The national housebuilder plans to build a range of two, three and four-bedroom homes at Lomondgate. If planning is successful, Taylor Wimpey will join Walker Residential and Persimmon Homes on the site late this year.

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The construction industry must take heed of changes to the Construction Act coming into effect in November. Paul Wilson of DLA Piper Scotland’s Engineering and Construction Team says contractors, consultants, property developers, investors and lenders need to understand the ramifications.

Those involved will need to decide how best to update contractual arrangements – and get on top of amendments to industry standard form documents – and ensure that contract managers understand the changes and manage the risks of disputes arising and improve internal dispute management systems.

A major amendment will see informal “oral contracts” being given the same weighting as written ones.

Paul Wilson said: “The key change is to extend the application of the Act to oral and semi-oral agreements. This is of great importance to the construction industry where a significant number of jobs are never committed to a formal written contract – particularly as you move down from employers and contractors to contractors and their sub-contractors.

Disputes over oral contracts will be dealt with through an adjudication process which is much quicker and cheaper than going to court and means more companies operating in the construction industry will be open to adjudication claims.”

>> Victorian classic Aberdeen boutique hotel The Carmelite is to be redeveloped in a project which will bring total investment in the past five years to more than £3m. The independently-owned Carmelite, with 50 bedrooms, is believed to be the oldest “hotel” in Aberdeen – a classic B-listed Victorian building with stained glass windows – dating back to 1821. Formerly the Grampian Hotel, it was bought by its current owners in 2006 and relaunched as The Carmelite.

Managing director Gary Atkinson said: “This is a second stage of our planned continuation to redevelop a very complex historical building.

We continue to strive to provide a lounge bar, restaurant and a unique quirky boutique hotel in the heart of historic Aberdeen.”

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>> Business organisation to operate at The Hub The Hub, one of the buildings in the Aberdeen Energy & Innovation Parks, has been let to the Aberdeen and Grampian Chamber of Commerce on behalf of Buccleuch Property.

The letting, arranged by CB Richard Ellis (Scotland), comes after Buccleuch Property unveiled the first phase of its development at the Aberdeen Energy & Innovation Parks. The Chamber has acquired 4,800sq ft of space within The Hub, a high-quality, low-carbon building comprising a total of 13,500sq ft. The property is the first joint venture agreement between Scottish Enterprise and Buccleuch Property.

>> Office gap widens The overall property performance in Scotland weakened in the second half of 2011. After a decline from 2.1% to 1.9% in Q1 2011, all property returns in Scotland were 1.2% for the second quarter of the year, according to the CB Richard Ellis’s Scottish Property Quarterly report.

However, the industrial sector maintained its strong performance relative to other sectors with a total return of 2.1%. Rental levels remained constant over the quarter which is consistent with the long-term trend of flat rental growth. The industrial sector was unique as it saw capital values grow by a tiny 0.3%.

For the fourth consecutive quarter, total returns from the retail sector remained positive at 1.4%. This represents a small decline from Q1, but is still a good performance when compared with the all-Scottish property total return.

Total returns for offices fell from 1.4% to 0.4%, representing the worst performance for the sector the negative territory between third quarter of 2007 and second quarter of 2009.

This was caused by both negative capital growth and a continued fall in rental values.

The gap between UK and Scottish office returns has widened further, in part due to the relative strength of the central London office market.

COMMERCIAL PROPERTY

Aileen Knox, director, CB Richard Ellis (Scotland), said: “Overall, the property market in Scotland remained subdued in Q2 2011, and there is little in external indicators to suggest any dramatic improvement in the short-term future. Quality stock is in short supply and will attract good investor support but secondary and tertiary markets demonstrate continued weakness.”

There is little in external indicators to suggest any dramatic improvement in the short-term future

>> Funding eases acquistion plans Clydesdale Bank has agreed a £2m funding package with Edinburgh-based property investment firm the Afton Group.

The company, which owns commercial and residential properties throughout Edinburgh, Glasgow and London, has used the funds to renew existing debt facilities and to acquire two commercial properties at Braid Road in Edinburgh’s Morningside area.

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>> Fountain Quay ready to flow Site clearing goes on at the former Scottish & Newcastle Brewery site in Edinburgh city centre placed on the market by Lloyds Banking Group.

The 13-acre Fountain Quay development site, which is located next to Edinburgh’s Exchange district, secured planning permission earlier this year for a mixed-use development to include retail, leisure, hotel and student accommodation.

Lloyds has an agreement to sell two acres of the site to Napier University and, as part of the first phase of development which will see several new areas of public realm, a park will be constructed in the centre of the scheme.

CB Richard Ellis Scotland director, Stewart Taylor, said: “This is one of the last large city centre brownfield sites in Edinburgh and with the flexible consent in place it offers developers the opportunity to deliver a truly mixed-use scheme, minutes from established prime commercial and residential districts.”

Nigel Waring, asset management director at Lloyds Banking Group, said: “We have worked closely with the City of Edinburgh Council to secure a planning consent for Fountain Quay which reflects their aspirations for regeneration of the site and the canal, while also being commercially viable for a developer.”

BUSINESS QUARTER |AUTUMN 11

INTERVIEW

AUTUMN 11

Tales from a craggy outlook Rob Cormie is the head of Quayle Munro in Scotland. After weathering the economic storm, the finance house is focusing on wind-powered renewable energy as one of its five key sectors. He talks to Kenny Kemp about the nation becoming a dominant global player Even on a damp and misty September afternoon, one of the finest new vistas of Edinburgh’s volcanic “Crag and Tail” is from the shiny board room of Quayle Munro, a finance house stoked with an entrepreneurial spirit. The setting even impressed the BBC who used the adjoining empty office to host their Edinburgh Festival coverage against the impressive backdrop of Edinburgh Castle.

The finance house has moved from its 8 Charlotte Square residency to the sixth floor of a new block in the West Port, originally intended as the home for Kenmore Properties, which became an unfortunate victim of the banking collapse. This modern and airy location gives Rob Cormie, the board member in Scotland, the opportunity to set a different style and tone for Quayle Munro.

“We are trying to position ourselves as a top Scottish corporate finance house, in the way Noble Grossart used to be many years ago,” says Cormie. “We want to be seen as the local ‘go-too’ firm with local knowledge and networks in Scotland and strong connection to the City of London. If you want Goldman Sachs or Deloitte, that’s fine, but if you want someone around the corner, who understands and cares, we want people to come to us.”

One of his tasks has been to raise awareness so that clients selling their businesses understand there is a serious option in Edinburgh. Certainly, the spectacular views will help. Meanwhile, in the last 15 months, Quayle Munro (QM) has sharpened its focus

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on five sectors; energy and renewables, media, retail, financial institutions and infrastructure.

“While traditionally QM has been involved with PFI infrastructure, and still have a PFI project team, the growth is elsewhere,” he says.

If the political imperative is to make Scotland a world leader in low-carbon energy, then finance houses such as QM are likely to score.

Already Cormie and his team have been involved in a number of energy and renewables transactions, including advising on the sale of wind farms in Caithness with Baillie Wind Farm in Argyll with Green Power and Beinn Ghlas, and in Inverness-shire for Eneco.

In recent weeks it has advised Barclays Infrastructure Fund on its first investment in the wind sector through an acquisition from RES. “We’ve worked with the majority shareholders in a major wind farm in Caithness and off the back of this there are more inquiries, and have recently been appointed on a similar project in Wales,” says Cormie. “People are buying us because we know what we’re talking about and we’re around the corner and it helps.

There are a now a remarkable number of renewable development businesses in Edinburgh. They might have a London office but they are likely to be here because the projects are up the road. A lot of them prefer to see us rather than four bankers in a suit arriving on a plane from Heathrow who can be seen to be more threatening

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than independent.”

Offshore is the next stage and QM is currently working on some projects which remain early stage and under wraps.

He says: “In the next few years these projects will come to fruition and they will need financing because the amount of capital required is vast, even for the utilities. This is a big boys’ game.

“There are huge opportunities for Scotland and Alex Salmond and John Swinney are recognising this. It would be a tragedy for Scotland not to become a dominant player in the market, including the export of our knowledge.”

Cormie cites Glasgow-based SgurrEnergy, the independent engineering consultancy set up

by Ian Irvine and Steve McDonald in 2002, which is already working on projects around the globe.

QM’s changes are reflected in its recent results with revenue of £14.7m compared with £15.7m for 2010, which had been boosted by the sale of its stake in Cath Kidston and £7.1m from Submersible Technology Services. Profit before tax was £3m which was down slightly, while statutory profit before tax – including the impact of share awards, bonus payments and impairment charges – was £200,000.

When the economic history of the UK’s turbulent banking years is written, Quayle Munro will be more than an interesting footnote. For many years, AIM-listed QM was run by the urbane Ian Jones, a veteran >>

AUTUMN 11

INTERVIEW

There are huge opportunities for Scotland and Alex Salmond and John Swinney are recognising this

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BUSINESS QUARTER |AUTUMN 11

INTERVIEW

AUTUMN 11

Scottish banker and corporate financier. It was a conservative, generalist business with a pin-stripe backbone. Ian Jones and Jo Elliot – the first professionals employed when QM was set up in 1983 – had built up the boutique merchant bank with the help of Bank of Scotland one of the largest shareholders.

Then, in 2007, the casually-dressed and controversial Peter Norris arrived and QM started to shed its more sedate demeanour.

Norris had just been made head of investment banking at Barings Bank in 1995 at the time of Nick Lesson’s rogue derivative trades which resulted in its collapse. It took time for Norris to be rehabilitated but he became a special adviser to Sir Richard Branson. His consultancy, New Boathouse Capital, was merged with Quayle Munro and Norris was appointed chief executive. He was quite a contrast to Ian Jones and Jo Eliott. In September 2007 when Northern Rock collapsed, Jayne-Anne Gadhia of Virgin Money and Virgin Group’s Stephen Murphy appointed James Lupton of Greenhill to look at buying the Newcastle-based bank.

Peter Norris was then given a call, along with Andrew Balheimer of law firm Allen & Overy, and they built a team which became a heavyweight consortium to bid for Northern Rock, which included Wilbur Ross, First Eastern Investment and Toscafund, chaired by Sir George Mathewson.

It was an audacious move and nearly succeeded until the then Chancellor Alistair Darling decided to nationalise Northern Rock instead. What it did was give Virgin Money the appetite to become one of the UK’s new banking players. And Quayle Munro went on to advise Virgin Money, now with headquarters in Edinburgh, on the takeover of Church House Trust, a regional private bank in Somerset, which has given Virgin the banking licence it requires to operate.

This wasn’t the only high profile brand. QM also advised the shareholders of trendy retail brand Cath Kidston on a sale of global private equity firm TA Associates. Over the last year QM has also advised Lloyds Development Capital, Tesco, RES, Telereal Trilium, TDR Capital and Barclays Infrastructure Fund.

In 2008, QM bought the Van Tulleken Company, an international mergers and acquisitions advisory founded by Kit Van

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Tulleken, with interests in the media, publishing and technology. It was involved with all the big main media companies such as Pearson, owners of the FT, Springer, Hearst Publishing, and Nielsen.

Cormie says a typical deal is high-value, financial technology, or FinTech, where people provide real-time data or software services for the structured finance community, with QM being advisers to New Energy Finance, a renewable energy analysis business sold to Bloomberg.

But QM needed reconditioning and Cormie describes his task as streamlining the business.

“We had four cultures in three different locations,” he says.

First they had to ride out the storm when the markets were horrendous. From late 2008, for the next 12 months, it was a matter of “battening down the hatches” to see how the good ship QM might emerge.

He says: “I’ve been around long enough to see bad things happen before, whether it was the Russian or South American crisis, or Enron – and I was in New York when they blew up the Twin Towers – so you become battle-hardened by the whole thing.”

An architect, who studied at Edinburgh College of Art, before moving into finance, Cormie remains self-assured.

“I knew we were good at what we did so I knew, no matter what, we were going to survive.”

Cormie, now 46, spent six years studying architecture, leaving Edinburgh in 1990 and went to work in London with a small

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architecture practice, but was made redundant during the property slump. While his closest friend went out to Hong Kong working on the Norman Foster-designed Chek Lap Kok airport, he decided to move into financing and went to Cranfield School of Management to study for an MBA. “I went with no firm view of what would happen at the end of it,” he says. “I knew that I was good at maths so, at business school, the accounting and financing parts were where I focused and did well. I was less interested in marketing and human resources, which didn’t suit my personality, although I did the courses and got the qualification.”

Armed with the MBA, he found a way into the emerging discipline of project finance, which combined the skills of architecture and financial aptitude. He worked for a Japanese bank expanding in the Middle East and in free-market Hungary, when power plants were being privatised. His career accelerated with a job with Commerzbank and then CIBC World Markets in investment banking, which included work in the US. He returned to the UK, spending six years with KPMG Corporate Finance. He was appointed to QM in September 2008.

“It was pretty clear early on that things need to change,” he says. “Peter Norris had hired me and I’ve a lot of respect for him. We were all employed and we had to crack on.”

The trigger point was Norris leaving in November 2009 to become chairman of the Virgin Group, the holding company of Sir Richard Branson’s brands such as Virgin Atlantic and Virgin Rail.

“Peter’s departure caused a sufficient degree of upset that something had to happen,” says Cormie. “Andrew Tuckey took up the cudgel as chairman to lead us to the next phase. He’s done a great job. He’s been around a very long time and is well-known in the City.”

Tuckey recognised that for Quayle Munro to prosper they needed to bring in enough business for the key revenue generators to hang around.

“We were too top heavy, so we spent time inverting the pyramid,” he says. “Even in the last few months we’ve found it easier to attract people as we’ve become more well-known.”

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He points out that good investment talent, who are perhaps disillusioned with working in a big bank, now have QM on the radar.

“We are always looking for high quality people,” he says.

Board changes included the retirement of Ian Jones, who still holds around 15% of the business, while several board members including Kit Van Tulleken and Jo Elliot, stood down. Quayle Munro now has two Andrews – Tuckey and Adams – and Cormie on its executive board. Andrew Adams is managing director of the London office.

“Andrew and I run the advisory,” says Cormie.

“We all came from bigger places where decisions take for ever. We have a degree of focus. We want to be the best corporate advisory firm in Scotland.”

Scotland is critical and Cormie feels QM has much to offer.

“Independence in the banks is in short supply.

Our mantra is, you get senior people to help you and we know what we are talking about.

We will be very honest for two reasons. It will be the right thing to do, and two, you can’t afford not to tell the truth.”

He says QM cannot afford to take on mandates that are going to fail, because that wastes everyone’s time.

“If we don’t make any money, we can’t pay the bills,” he says bluntly.

“I think governments and people should stop meddling. As long as there is clarity and transparency about what’s going on. There are winners and losers. As soon as someone knows that something is being propped up artificially then the markets can play around with that. There’s an arbitrage and a differential risk which is not the real market price – that makes things difficult. The people who are working on the trading floors are quant mathematicians who are seriously bright people. These are people who are trying to make serious money, not for some altruistic good. Hedge funds have made a spectacular amount of money – and are now picking on the weakest countries – but that’s their job.”

In November last year, QM added a debt advisory arm with Stuart Roberts joining from RBS where he was head of the structured finance teams in Glasgow and Aberdeen.

INTERVIEW

Three or four years ago the banks were falling over themselves to put money into businesses, but now they are not.

People don’t know how to find money Increasingly, companies find it hard to access the debt market so someone with Roberts’ expertise helps.

“Three or four years ago the banks were falling over themselves to put money into businesses, but now they are not,” says Cormie. “People don’t know how to find the money – and then how to negotiate it. It’s early days, but there is an increasing amount of traction. In our chosen sectors, I haven’t seen any slow-down. On the energy sector, it’s increasing.”

Certainly the list of transactions completed, including work with Eurus Energy in Norway, and Charlesfield Biomass in the Borders, confirms this activity. There isn’t a large pool of capital, but there is cash on the balance sheet to make an equity investment, although Rob Cormie says this is sporadic.

“We might put the last dollar in to help a deal – but not the first dollar. But it is a good way of enhancing returns and giving us more interests.”

The Cath Kidston deal is a good example where part of QM’s fees was exchanged for equity – and shows its interest in retail.

“It is extraordinary,” says Cormie. “It’s not a

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narrow brand like SuperDry or White Stuff.

No-one could have seen how successful it would become; its ability to have teenage girls buying purses and mobile phone covers while mother is buying household goods and grandmother’s buying tea-towels and handbags. And it has cracked Japan.”

Quayle Munro’s exit was worth £7.1m, while it also advised on the buy-out of DFS, the high-profile furniture group which has wall-to-wall television advertising its sofas and couches. It is also working in higher education with universities around the UK, helping with private sector funding for new student residencies and campus improvements.

“We work with a lot of entrepreneurial business, such as Kath Kidston and Monsoon,” says Cormie. “This suits our own culture where we can be flexible about our working arrangement and fee structures. We’d definitely like to see more Scottish business coming to see us.”

That sounds like an open invitation. So a potential client finding their way up in the lift might well find more than a craggy outlook to savour – if they tap into Rob Cormie and his QM team in Scotland. n

BUSINESS QUARTER |AUTUMN 11

ENTREPRENEUR

AUTUMN 11

Rachel’s hot seat There are precious few people in Scotland who have built an international children’s brand. Rachel Jones is one of them. She moved from a career in environmental marketing and public relations determined to build Totseat. She reveals to Kenny Kemp what the business journey has taught her

Rachel Jones had a simple idea. She’d run off a few fabric baby seats on her sewing machine for her 18-month-old daughter and, encouraged by the mums from her baby group, she bought a cheap train ticket to London. Then she talked her way into an appointment with some John Lewis Partnership’ buyers.

Business success doesn’t usually happen this way. But, in January 2005, the buyers heard

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Jones’ pitch and loved the idea. She was told: “If you can make them, we’ll sell them.”

Still spinning, she stepped back out into London’s bustling Victoria Street after the head office meeting.

“I wasn’t expecting it at all, and I had no idea what to do next,” she recalls.

Over the following seven-and-a-half years, Jones has been on a switchback journey, held on course by her determination, imagination

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and resourcefulness. She looks remarkably unwrinkled too by her many sleepless nights, nursing both her daughter Freya and the Totseat travel highchair, a clever way of holding a small child safely and hygienically in any type of adult chair.

At times, it looked as if the Totseat business might totter off the rails, but the business is now making good profits after five years.

Turnover hit £500,000 last year and in the first

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six months of this year profits have doubled.

“Today we have the most respected travel highchair in the world – and we know that,” she says, leaning forward at the table in the Edinburgh basement office. “There are copies but Totseat is ‘the’ one that is charging ahead and recognised as the premier version.”

Totseat is a Scottish-designed product now exporting to 45 countries. It won Gift of the Year in 2009, awarded by the Giftware Association, which propelled Totseat out of the babyware ghetto into the giftware market, which has not been so bashed by the recession. Totseat recently won ‘The Tots To Travel’ award for Best Feeding product and won a gold medal in the Practical Parenting awards, beating major brand competitors along the way. Totseat has also picked up the Scottish Design Award’s Grand Prix for product design, and has landed plaudits from many international baby magazines.

But, back in early 2005, sitting on the train home from her John Lewis meeting with a comfortable job working in marketing and public relations in her own company Great Circle, she pondered her future.

“I really went to see the John Lewis Partnership for a reality check because everyone had told me I could turn Totseat into a business,” she says. “I was going to say, I’ll stick to my day-job, park the baby seat idea and say, it’s been really useful experience.”

Life doesn’t work that way: Totseat would become an all-consuming, compulsive product with Jones, a global-trotting business woman in her late thirties, embarking on her greatest adventure to date.

She says: “When someone such as John Lewis Partnership says they can sell your product, you think ‘fantastic’ but you can’t properly think about what is to come. I then had the most incredible learning curve, because I’ve never manufactured anything.”

For Rachel Jones, it has turned up some wider home truths about the underlying state of manufacturing in the UK; the lack of support and knowledge in Scotland for ideas in the baby sector; and some out-of-date advice from business angels advising her to look at UK markets before exporting. But she had to find out even the basics of the business.

Months before her date with John Lewis,

ENTREPRENEUR

I was going to say, I’ll stick to my dayjob, park the baby seat idea and say it’s been a really useful experience

Jones, husband Mike and daughter Freya were living in the Marchmont area of Edinburgh.

“I had three week’s maternity leave, as you do when you’re self-employed,” she says. “I was desperate to get out and about. When Freya was a bit older, we discovered that every time we went out and there wasn’t a clean high chair, I would take my jumper off and strap her into the chair using the arms of the jumper.”

It wasn’t until January 2004 that she tackled the problem. It was cold and wet and Jones wanted to take out Freya – now one-and-ahalf. She ripped up the only bit of fabric she had, the lining of her wedding dress.

“I took it to a friend the next day and she helped me sew it,” she says. “It was cotton, not terribly robust, but I just used it and it was brilliant when I was out and about.”

This was to become the first Totseat.

Here a group of NCT – National Childbirth Trust – friends become a major part of this story. For many mums and dads, an NCT group can become the basis of life-long friendship with similar-aged toddlers.

“Can we have one?” they asked. So Rachel

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got busy, refining the design as she went along. She bought fabric from Remnant Kings in Newington and enrolled her friends to help.

In all, 29 families were involved.

“I had a whole bunch of prototypes, all slightly different shapes and sizes that work in different ways,” she says. “At this stage I still had no idea that I wanted to turn it into a business. It was just something that made our lives easier.”

There had been a product in the 1950s that was anchored on a chair but it only worked on one in ten modern chairs.

“I wanted Totseat to fit any type of chair that we came across,” says Jones.

After the date with destiny at John Lewis, the business idea took on a life of its own. One of the first steps was finding appropriate, washable fabric. Jones didn’t want the normal trucks, teddy bears and ducks that epitomised baby goods. She felt that a modern contemporary design on a strong, washable, comfortable poly-cotton material was crucial for parents who were taking their children out.

“I decided I would find a fabric I liked and licence the design,” she says. “I found the fabulous Natasha Marshall in Glasgow who was an interior designer running her own firm, Squigee.”

Natasha Marshall graduated from Glasgow School of Art in 1996 and set her business up with the help of the Prince’s Scottish Youth Business Trust. Since then she has emerged as one of Scotland’s stars of interior design and an entrepreneur in her own right.

“I licensed a fabric design from Natasha, which we still use today; we just keep re-colouring it,” says Jones.

Then she asked another Scottish designer, Sarah Cheyne – originally from Johnston but based in London – to become involved.

“I had two people involved with the design who I could trust to give me good advice on colours,” says Jones. “If I wanted things to sit with High Street trends in terms of colours they helped me with forecasting.”

The prototypes were printed on “graige” or plain polycotton, but Jones needed to find a manufacturer.

“Natasha was extremely helpful,” she says.

“We chose her design and got print screens made in the Midlands. We printed fabric >>

BUSINESS QUARTER |AUTUMN 11

ENTREPRENEUR

for 200 seats, made them, sold them, then printed more fabric all over again.

“I didn’t know how to find a factory. I thought the Scottish Borders are full of defunct factories because of the woollen industry has collapsed and they are used to sewing products. I couldn’t find anyone in Scotland to help.

Eventually, she found a CMT or “cut, make and trim” factory in Rochdale, with Jones having to source everything.

“I naively thought I would go to a factory and say: ‘Will you make this product?’ But a CMT factory means you need to buy all the components, apart from the thread. I had to find fabric I liked, buy binding, buy washable labels, get them printed, find toggles and Velcro.”

She wanted to fulfil the order for 200 for John Lewis, but buying in small quantities made the individual cost of each item hefty.

“It was becoming incredibly difficult to source all the parts and expensive to make 200 Totseats,” she says. “I should never had started by buying all the elements in small quantities, but I didn’t know we would be able to sell 200,000 Totseats. It seemed like a sensible starting point.”

The first batch was picked up on the way to a trade show in Birmingham, which was nerve-wracking. Yet the reaction at the show was “terrific”, so Jones decided it was time to rethink her production.

BUSINESS QUARTER | AUTUMN 11

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The next stage was taking the product to Kind + Jugend in Cologne, one of the world’s biggest trade fairs for the children’s sector. Rachel needed a quick rethink, so it was renamed Mobiseat for the German market, where it has become a major seller.

Within months, the company was on the export trail.

Jones regularly turned to the collection of friends – many with toddlers – seeking advice and suggestions for improvements.

“It was all quite exciting for us, because none of us had done anything like this,” she recalls.

“I had a solid background in old-fashioned marketing and public relations, and we thought it was a good idea to apply this real-time knowledge to ourselves – taking a product to market. Not many people in marketing department ever take a product to market.

“It was a really interesting exercise and was useful for some of our Great Circle clients too.”

But manufacturing soon became a headache.

Totseat was being produced in the UK but the basic costs were too high and the company was operating at losses that were unsustainable.

“We moved factories after about a year to one in Newcastle, which was in a converted hangar. I was adamant that we should keep the manufacturing in the UK for as long as we could. But this was a mistake from my point of

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view. Mike kept saying we needed to go offshore.”

Her dogged commitment to manufacturing in the UK nearly drove the business into the ground.

She says: “My misplaced belief in UK manufacturing was a lesson for me. I was bloody-minded and I was totally wrong. We should never have manufactured in the UK for as long as we did.”

Gordon Wilson, a Bank of Scotland manager at the Morningside branch, was helpful and encouraging.

“Our margins were impossible to survive on,” she says. “He was the manager for Great Circle and one day at a meeting I told him about Totseat. He suggested we apply for a Small Firms Loans Guarantee Scheme, the forerunner to the Enterprise Finance Guarantee, which we did.”

When Gordon Wilson retired, Rachel Jones found it harder dealing with the bank’s call centre until a restructuring led to the introduction of relationship manager Gillian Windever.

“We needed someone who actually understands what the product is and our currency needs – because over 70% of our products are exported and we deal in multiple currencies,” she says. “We now have Gillian, who is very helpful to us.”

Jones’ reasoning on manufacturing was altruistic – she wanted to put the money back into the UK economy, but found that British people did not want to work in the Newcastle factory and it was staffed with people from Eastern Europe.

“I’ve nothing against this but the people in the factory were poorly managed because the people running them didn’t speak Lithuanian or Slovakian,” she says. “And all the money was remitted back to their home countries, so it wasn’t going into the UK economy.”

There was another wake-up call that changed the dynamics of the business. Jones recruited Fiona Marsden who had been working for Castle Blair, and together they found a factory in Shanghai which was better suited for production. Marsden ran the manufacturing and the product testing and stayed for three years as the company continued to grow.

There was a frightening blip when Rachel was

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ENTREPRENEUR

Rachel Jones’ path to Totseat Born and educated in Edinburgh, Rachel Jones headed north to study agriculture at Aberdeen University, specialising in animal science and behaviour.

“My mother Jean came from a farm in the Borders and we spent every weekend and every holiday there during my childhood,” she recalls.

After graduating in 1986, she spent a year travelling around the world on a scholarship looking at different farming systems, before enrolling in a “women returner” course at Stirling University’s Management Centre in 1988.

“I was only 23 at the time, but the economy was in the same shape as it is now,” she says. “It was difficult to get a job.”

She then went off to Durham University Business School and took a post-graduate certificate in export management, which later proved to be highly practical.

“I thought, ‘gosh, what am I doing’, but looking back it was incredibly useful. I love travelling and I thought it might be quite useful.”

She worked for six months in Newcastle for a company making autoclaves for sterilising in the food industry and she was about to go to China when the Tiananmen Square massacres put paid to this opportunity. She returned to her home town and took up a job in marketing at the Scottish Agricultural College, moved to Shrewsbury for an agricultural PR job (“writing about silage”), and landed a job in Edinburgh with Webber Shandwick, the PR agency (“writing about sewage”), where she also did the Crown Estate’s public relations.

Still young, free and single, she headed off to New Zealand, working with an independent engineering company called Beca Carter, setting up the marketing department.

“It was pretty technical, but I’m really interested in how things work,” she says. “It was really interesting working for an engineering company. I learned about computer modelling for runways and shipping traffic.”

She worked for a Burston Marsteller affiliate to head up the Auckland office which was another “incredible” experience and spent time working on a Oregon-owned gold mine in Coromandel Peninsula, on North Island.

“One thing that people don’t know about me is that I’ve been down a gold mine several times,” she says.

In Auckland she met Mike Groves, now her husband, a business confidante and eventually a co-director of Totseat. A geographer by trade, with a PhD in aerial-photographic interpretation, he was an environmental manager looking after the forestry certification schemes for sustainable timber plantations in Indonesia. In 1995, Mount Ruapehu erupted in New Zealand, throwing ash cloud into the air and Mike, who hails from The Wirral, was stranded in Auckland with Rachel and they decided that they should get together. They started a long-distance commuting courtship – across the 8,000 miles from Auckland to Jakarta. But with little prospect of work for her in Indonesia, they both decided to return to the UK, settling in Edinburgh.

“We ended up coming back to the UK and setting up Great Circle, our PR and marketing company, which began specialising in environmental issues.”

Great Circle grew to a team of five with an office in George Street, Edinburgh. Great Circle is now part of College Hill, an international business consultancy.

returning from her early meetings in China; the Newcastle factory went bust with thousands of pounds worth of Totseat stock.

Fiona Marsden borrowed £3,000 from Rachel’s mother Jean and drove a Transit van through the deepening snow to the factory to plead

with the liquidators to release what belonged to Totseat. “It was a horrific time,” she says.

“Everything in the factory was ours – we had 200 metres of fabric, cleats, and miles of Velcro. It was incredibly important to get everything out, but the liquidators

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understood that they were our assets and not the factory’s.”

Production shifted full-time to China, with the business beginning to make some real money.

“I’ve now been to the factory in Shanghai many times and I’m able to say the conditions are fantastic,” says Jones. “I would happily work in these conditions. It’s light and clean.”

Jones’ fundamental ethical approach means she is committed to ensuring that her product is manufactured in humane and decent human conditions –“this matters to me enormously”.

Totseat started exporting in 2005 and has continued ever since. Now she has a group of international distributors who are supplied directly from China which saves transport and storage costs in the UK. In 2008, Totseat started looking for external funding and spent six months pitching to investors with the help of Howard Flint at LINC Scotland, the angel capital association. Exporting was the only way ahead and they gained some support from Scottish Enterprise in researching strategic markets.

On December 31 2008, they settled with Jock Millican, formerly of S&N and former interim chief executive of Scottish Rugby, and Malcolm McDonald, who is financial analyst and property developer, as investors. It was then that Jones finally resigned from Great Circle and became a full-time Totseat employee. Now Totseat exports to 45 countries with the biggest markets in Japan, the US and Germany, shipping product to major retailers and baby, gift and travel specialists.

But with a single product, Rachel Jones knows she is vulnerable and wanted to find something to extend the brand. She now has a cute selection of washable dolls called Oobicoo that fits snugly into the Totseat, and can become a toy when the toddler grows out of the seat. Oobicoo – made from recycled materials – even has a jingle and a song and has already been taken to the Nuremburg Trade Fair. The feedback is encouraging with Oobicoo set to become a children’s phenomenon. Remember Cabbage Patch Dolls? This might be bigger.

Totseat is a lesson for many who attempt to take a product to multiple export markets.

And for Rachel Jones, it will remain her “taught” seat of business. n

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BUSINESS LUNCH

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BUSINESS LUNCH

price is right Professional restlessness led Nick Price into the world of recruitment and a business that doubled turnover last year. Gillian Law talks to him about scallops, mentoring and Bright Purple people Nick Price, managing director of Bright Purple recruitment agency, turns up from his purple-walled offices in a rich-purple striped shirt, and grins. “I thought I might as well ‘live the brand!’”

The ebullient Price runs one of the current stars of the Scottish SME scene. Bright Purple saw turnover of £37m last year, up from £18.6m the previous year, and is on track for over £40m in 2001/12. The firm has just opened its first overseas office, in Singapore, doubled its office space in Edinburgh, and set up an “academy” to train its own staff and to offer training to clients as well.

Price radiates energy. He passes that positivity on, too, and it clearly motivates staff to give their best. I’m sure he sometimes makes them want to run and hide, but it seems to be working. He’s also one to realise when he needs inspiration of his own, and gives a lot of credit to his chairman and mentor Peter Flaherty for giving him the confidence to push for growth in Bright Purple when everyone else is struggling to keep going.

Price moved to Glasgow from Wales in 1977, aged 16, and put the same enthusiasm into his first job sweeping the floors in a tanning factory.

“I just wanted to be liked,” he says. “And to be the best employee they’d ever had.”

Fresh from the Welsh valleys, with a accent “like Max Boyce”, Price says that if he had worked in the Welsh mines like the rest of his family, “I’d have been the happiest miner there was, I’d have dug the best coal”.

“And I loved Glasgow,” he says. “It was a pretty rough time in Glasgow then, but I never saw any of that – I loved the people I worked with and loved the company.”

Price stayed at Andrew Muirhouse tanners for ten years, slowly promoted until he was running a big chunk of the factory, and says he could easily have stayed working there for life. But over time, meeting sales people visiting the factory or travelling from it, his horizons began to expand, and he went on to spend several years in sales. That included a period in food sales which was “interesting, but never for me”.

“Everything was about a penny,” he says.

“If you could sell a container of eggs for five pence less than the other guy…”

It was a period of redundancy from his sales career that finally thrust Price into the new-to-him world of recruitment. He worked for a succession of agencies before finally taking the plunge in 1995 and setting up on his own with a colleague, Alan Smith, to create technology recruitment company CareerCare.

“That was quite a change,” he says. “From company cars to making our own coffee, cleaning our own toilets – and my wife was pregnant with our first son at that point, so we just had to get it going.”

In 2006, after swings of success and failure, and eventually taking over the business himself, Price rebranded, launched Bright Purple – and promptly got kicked out of his lovely offices in St Andrew Square, Edinburgh.

“We had a great, long lease, and then they came along saying they’d promised the building to Harvey Nichols,” he says. “We said no way – they could build it around us, we’d happily work out of the knicker department.”

He hasn’t been back, he says, to see what’s in place where their office was.

“I’m no great fan of Harvey Nicks!”

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Bright Purple is now happily settled on Rose Street with a team of 60 people. It has just taken over a new floor in its building, bringing the floor space to 8,000 square meters. The company is growing fast – in large part due to Price finding his own inspiration in the form of chairman Peter Flaherty.

“I realised that I only had a certain amount of experience, and I needed a mentor, someone to help me grow,” he says. “I think too many people get hung up about asking for help.”

After a couple of false starts – “I made some poor judgement calls” – Price met Flaherty in London. Flaherty had been managing director and a major shareholder in recruitment company MSB International from 1991 to April 2001, growing it from a turnover of £4m to £200m.

Price says: “I wanted someone who had made things happen. And here was a guy who was very humble, who sat and listened. The first time I asked he said he wasn’t interested; he didn’t have any business interests in Scotland, didn’t want to get on the plane to Scotland.”

But several months later Price tried again, and in 2008 Flaherty invested in Bright Purple.

“And he immediately set about doing what he does best, which is inspiring me,” he says.

“I didn’t want Peter to be some sort of super-human for the whole organisation; I just wanted someone to make sure I was on the right track. I felt I had enough drive, ambition and motivation to keep everyone else going – but I needed someone to keep me topped up. I was giving it away and it wasn’t being filled up. And he just made me feel like I could do it from the minute I met him. He asked what I wanted to do, and then said, ‘Not big enough – set your goal higher.’” >>

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BUSINESS LUNCH

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Works of art on plates We were just discussing Nick Price’s artistic side – art and music were his only interests at school, he says – when a work of art appeared on a plate.

Nick had been very gentlemanly and insisted he would choose something else when we both wanted the scallop starter, so that we could taste more of the menu. But when three of the most plump, juicy looking scallops I’ve ever seen turned up, surrounded by splashes and dashes of parsley mayonnaise and tomato jelly squares, he did admit to being more than a bit jealous. Still, he insisted his own parfait duck leg with hot orange jelly was “exceptional” – and beautiful.

Mark Greenaway at No 12 Picardy Place opened early this year and has been creating a bit of a stir with its “smoked cauliflower custard” and other intriguing dishes. Our lunch had started with “espuma of fennel and dill, with truffle oil and red amarynth”, a little glass of fluff on a piece of driftwood that set the tone with an intense flavour and gorgeous presentation.

My halibut main came with a tasty green rectangular carpet – presumably the “herb crust” – and a poached oyster hidden under a wee cloud of star anise “air”, while Nick’s pork belly looked like no pork belly I’ve ever seen, wrapped in a little parcel and tasting “delicious, just mouthwatering”. The plate certainly went back looking licked-clean.

We were too full for dessert, but another piece of driftwood loaded with petit fours arrived with coffee and brought a chorus of “ooh, look at that”. Tiny brownies, white chocolate and lemon balls, biscotti, truffles –and pink grapefruit lollipops ended the meal with a lot of sugar and a lot of laughing. Don’t try to eat a lollipop while asking a serious question, that’s my tip.

We left over-full but happy, with Nick vowing to bring his wife Margita for dinner as soon as possible. Maybe this time he’ll get to have the scallops.

Mark Greenaway Restaurant, 12 Picardy Place, Edinburgh EH1 3JT, 0131 557 0952, info@no12picardyplace.com

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Bright Purple now aims to become a £100m company.

“Peter’s philosophy is simple – there’s a lot of opportunity out there but you have to make it happen,” says Price. “If you’re not hungry to go and get it, it won’t come.”

A move into financial services two years ago has been a success.

He says: “We were working with lots of financial services companies; they were asking if we could help with general recruitment and it became obvious it was no different. And we might look at other routes now, oil and gas, whatever. We’re looking to step on the accelerator.”

The company has also been looking at acquisitions to help it grow. And then there’s Singapore.

“We could see the UK is toiling,” he says.

“We have a plan to reach a big number and we can’t (do that) if the UK stalls and we only work in the UK.” Bright Purple looked around, Price says, and saw that Asia is the one area that’s still growing. So in it went – setting up an office in Singapore with a manager and one local member of staff so far.

“We’re working on projects in Shanghai, Bangkok, Indonesia, Japan,” he says. “I went out in July and all I saw was opportunity everywhere I looked. It’s just massively alive, with the economy growing at 100 miles an hour.”

Other markets are a possibility too – Price seems particularly taken with Lithuania – but Europe and the US are generally struggling at the moment.

Back in Edinburgh, Bright Purple has taken over the floor downstairs from their old office and set up its academy to train “Bright Purple people”.

“A few years ago we had a vision of the company doing different things, different services – and one problem is always people,” he says. “Where do you find Bright Purple people? Finding future leaders is difficult.”

Bright Purple will now be working with leadership school BMC Global to train staff and also offer training and meeting space to clients.

Can leaders really be created like that, in an academy?

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“I think it has to be in you, but it can be expanded,” says Price. “It comes down to desire and passion – so the academy won’t so much teach leadership as allow us to identify leaders and let them express it.”

The academy is also being used for some of Price’s other interests. He is working on a community project with Inspiring Scotland, a “venture philanthropy fund” raising investment for Scotland’s charities.

“Inspiring Scotland is out there on the really hard edge of the world, trying to inspire Scottish children who have all sorts of problems,” he says.

Doesn’t he ever feel like he’s made enough money and it’s time for a rest?

“I haven’t made enough money, that’s the problem,” he says. “The company is having a really successful time, but the money is all being reinvested – building the academy, hiring all this talent, moving into Singapore.

BUSINESS LUNCH

The company is having a really successful time, but the money is all being reinvested – building the academy, hiring all this talent

Have I made enough? No, I haven’t.”

Not that he’s likely to stop working anyway.

Price is on the board of Scotland IS, and chairing a new special interest group called G3, which will look an internationalising Scottish technology companies.

“I love the fact we’re helping the technology industry in Scotland – it’s given me a good life, so I want to do my bit,” he says.

Add a non executive position at a design

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business and a tough regime with Gwen Stefani’s personal trainer and it’s clear Price isn’t one for taking the easy path.

“I think the guys who are successful are the hungry ones,” he says. “Hunger, desire, passion – all those old fashioned things are what got me here today, from a little Welsh valley to running a successful SME. That’s what we look for at Bright Purple. I say, ‘My job’s up for grabs, come and get it’. And it really is!” n

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FASHION

sweeney shod ‘Proper’ footwear doesn’t have to be dull, brown and boring – it can also be ‘quirky with a twist’ as Chris Porter discovers on easing himself into a pair of Oliver Sweeney shoes

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“It’s not a guilty pleasure at all,” says Tim Cooper. “I think trainers are fantastic, especially in terms of their styling, and I think more and more people are fascinated by them.

If I’m deciding what to wear in the morning it would normally have been between a 20-year-old pair of Edward Green brogues that I adore, or a pair of Tiger Onitsuka trainers.

I’ve got about 20 pairs.”

That Cooper should be such a fan of the soft and sporty is surprising given his job. Since 2009 he has been managing director and co-owner of Oliver Sweeney, one of the UK’s more established contemporary brands of “proper” shoes – English-made brogues and Italian-made loafers, with the gamut of other styles made in Spain and the Far East. Easy sneakers these are not.

Indeed, if fashion is seeing an appreciation for the heavy, Goodyear-welted shoe – a shock to the feet of generations that have grown up in instantly comfortable if short-lived sneakers – then the company might claim to have been ahead of its time.

When, aged 15, the company’s eponymous founder walked into Alan McAffe’s, a bespoke shoemakers in London, and asked for a job, eventually launching his own line of solid men’s footwear in 1989, the trainer craze was becoming a phenomenon. But perhaps Sweeney spotted that there was a demand among men for shoes that would have been recognised as such by their grandfathers, but that their grandfathers would have considered too modern to wear.

Cleverly, Sweeney – who sold up to Cooper and left the business two years ago – did not ignore the comfort factor either. He had devised his own signature and trademarked Anatomical Last, better mimicking the foot’s actual shape, sculpted to support the arch and reduce rolling to the outside of the foot.

A combination of this ease of wear and a British quirkiness in styling: “A bit less conventional, the old idea of classic with a twist,” has, Cooper suggests, given the brand a loyal following that has allowed it to survive downturns, historic management problems and administration, but also to retain great potential. Indeed, since 2009, Oliver Sweeney has seen like-for-like retail sales increase 38%, and rapid expansion into other products, >>

BUSINESS QUARTER |AUTUMN 11

FASHION with this summer alone seeing the launch of sunglasses, blazers, sports jackets and an extended range of bags and small leather goods. A selection of outerwear has already been launched and more products are likely to slowly follow. Could Oliver Sweeney have the makings of a more comprehensive menswear label?

“Shoes will always be the core of what we do,” says Cooper, himself a third generation shoemaker, with management experience at the likes of Bata when it was the world’s biggest shoe manufacturer.

“And I think men are becoming more and more interested in shoes, if not to the slightly obsessive extent that women often are. Not only are they more interested in shoes, but in less traditional ones too – as the male wardrobe has broadened beyond the suit, men have looked for footwear to go with it. It’s a product of media, celebrity and a general increase in style-awareness. But Oliver Sweeney is becoming more a men’s lifestyle brand now. I very much admire Paul Smith’s business – and would certainly like one like that...”

Perhaps in readiness, the diversity of the footwear that Oliver Sweeney sells – from international accounts, six stores across the UK and, increasingly, on-line – has grown over the last two years, giving it a broad customer base, albeit one focused around the affluent 30- to 50-somethings happy to spend as much as £350 on a pair.

Goodyear-welted brogues, tassel loafers, whole-cuts (made seamlessly from a single piece of leather), Chelsea boots and biker boots – often with a signature sweeping, streamlined shape – sit next to crocodile-print and even deep red eel-skin sneakers.

This latter shoe, with its unexpected choice of materials and colour a typical Sweeney creation, is a revisiting of the brand’s more creative heyday a decade ago, when in 2003, Sweeney designed his Chelsea shoe, a square-toed, monk lace-up on a squarebacked heel, one of the company’s best-sellers and certainly the one that put its name on the map.

Other distinctive but wearable styles followed, often in limited editions – a shoe in stingray, for example; the Venice, with its elongated

BUSINESS QUARTER | AUTUMN 11

I think men are becoming more and more interested in shoes, if not to the slightly obsessive extent that women often are – and in less traditional ones

shape and two seams running to the toe, or – suggesting that the company does not take the naming of its styles too seriously – the Ravioli, a pointy-toed loafer that any Italian hipster might well appreciate.

Some shoes have simply been show-stoppers.

There have been, for example, the cricket ball-inspired shoes – in the same red leather, with the same heavy contrast stitching, and complete with the signatures of the 2005 Ashes-winning England team etched into the uppers – which the company launched to raise money for the Everyman male cancer charity.

And in 2007 Sweeney produced Londinium, a style released in strict limited edition, if only because the heel block contained wood from the first London Bridge, dating to 63AD. For those who want a shoe more unusual still, the company still runs its custom service, through which a customer can select from a range of colours and skins – including 24 exotic skins in gold, green and baby blue, to cite just three of the bolder shades – and then pick details from piping to lining and lacing in order to make a Sweeney style more their own. It is a long way from Cooper’s love for a good sneaker.

“Of course, mostly what I wear these days are Oliver Sweeney shoes,” he adds quickly.

“That’s because, like many of our customers, I really appreciate the British style of our shoes, the solidity of them, and a quality in British designed-products that is harder to define. We may make all over the world, but British design is what we’re about. Our designers are British and the company’s roots are very much here.

Oliver Sweeney’s is a British sensibility.” n

BUSINESS QUARTER |AUTUMN 11

EQUIPMENT

AUTUMN 11

in association with

inspiring a radical movement Some watchmaking companies are more than 200 years old, but that doesn’t hinder innovation and constant evaluation, writes Josh Sims. It’s how they survive When this month, Jaeger LeCoultre appeared at the Venice International Film Festival to launch its latest haute joallerie piece – that’s watch industry speak for be-jewelled – the movie star on-lookers could not have been more fitting. The show-stopper made even the glitziest red carpet affair look dowdy. After all, the Reverso Squadra Art Ice comes complete with 1,300 diamonds and 1,755 sapphires.

Connoisseurs of watch-making however – those more excited by the action under the dial – were more interested in the fact the rocks covered a Reverso, arguably Jaeger LeCoultre’s most iconic timepiece, with its characteristic swivel case originally designed to protect the dial during a game of polo but appealing as much for the chance to engrave the back with something self-expressive. The Reverso celebrates its 80th birthday this year, in part with the launch of an on-line customisation service.

“The Reverso is a classic of watch-making

BUSINESS QUARTER | AUTUMN 11

because it shows that you can make a very simple watch that’s still distinctive, one that you can identify from a distance,” suggests Stephan Belmont, Jaeger LeCoultre’s head of product design. “Really, the more simple a watch is, the harder it is to design – you can’t make any mistake in the proportions or the setting of the hour markers, for example. With a complicated watch the dial can look so crowded the details become less important.

That’s not the case for the Reverso.”

Most watch brands would be happy to have one classic in the canon of timepiece design greats, but Jaeger LeCoultre arguably has three; its mesmeric, marvellous Atmos mantle clock, for example, remains the official state gift of the Swiss government and has been given a new lease of life thanks to its being re-worked by Australian design star Marc Newson – while its Memovox, a line launched in 1956, was the first automatic watch with an alarm. >>

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Take time and you find that there are huge differences between watches that are superficially alike. That’s not particular to watchmaking, but also to cigars, wine, anything that has subtle appeal

In fact, as Belmont argues, it is one of the few watch brands that have been eclipsed by its own products – Reverso is perhaps a bigger name than Jaeger LeCoultre. It is why the company has a history less of launching revolutionary new lines as building on those already long established. And, while Belmont concedes that some trends – such as that for oversized watches, or the current shift towards ultra-classicism – are so huge as to be unignorable, it has been in no rush to do that either.

“We’re not a fashion watch brand, in which one element of a design strikes you immediately,” says Belmont. “We don’t go for watches with a wow factor. Instead, you really need time to create a Jaeger LeCoultre watch and time to discover its appeal.

“Take the time and you find that there are huge differences between watches that are superficially alike. That’s not particular to watchmaking but also to cigars, wine, anything that has subtle appeal. You don’t find the best of those in Duty Free at the airport.”

Neither issue however is a cause for panic.

After all, the company can claim to be one of the grand dames of the industry, longestablished and unusual in still making its watches in their entirety in-house. The company finds its origins some 175 years ago with Antoine LeCoultre setting up his workshop in Le Sentier in the Swiss Vallee de Joux and creating a company that can now claim 350 patents and 500 complicated calibres, including a recent spherical tourbillon and the Master Compressor Extreme LAB, a movement designed to operate entirely without lubricant yet without deterioration to parts and performance.

Most famous of all is the Calibre 101, the world’s smallest mechanical movement. As Belmont notes, “a very thin watch of the kind such a movement allows is more than an aesthetic choice – it’s a distinction, because so few brands have the technical capabilities to do it”. Check the new Grande Reverso Ultra Thin for a case in point. It is just 2.94mm deep.

Getting that quality message out there in an industry dominated by mega-bucks power marketing is not an easy one. But Jaeger >>

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INTERVIEW

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EQUIPMENT

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LeCoultre has played that cleverly. The brand can claim to be a pioneer for a whole new category of watch – the collaboration, with co-branded and co-designed watches being the product of tie-ins between prestige makers and, most typically, prestige car companies.

Jaeger’s ongoing work with Aston Martin has, like the Reverso before it, effectively created a brand in its own right.

“Watches at the top end are a specialist interest but it’s an interest that can be woken up in some people by reaching them through other products that tend to arouse passions – cars, for example,” explains Belmont.

“Watches have particularities that make them interesting in the same way that cars can be interesting. A collaboration is a way of bringing the two worlds together.”

It has also led to innovation, thanks to the fizz generated between two disparate design teams. It led, for example, to a driving watch whose functions can be operated without push buttons, leaving hands on the wheel.

Indeed, for all that Jaeger LeCoultre may be on its way to two centuries old, innovation is no dirty word. Belmont argues that innovation – finding new and better ways to maintain a mechanical watch’s accuracy, or improving its functionality through the exploration of the latest techniques and materials – is what the high-end watch industry used to do before the advent of Quartz movements during the 1980s which all-but killed the mechanical watch.

“But since then, so many old companies have reverted to the traditional just to be distinct from Quartz watches, making the same traditional look over and over again, being too dependent on heritage,” he says. “The more established companies have been scared of innovation, leaving that to new companies – and that fear has only abated over the last ten years. But I think that’s something Jaeger LeCoultre has always been able to combine.

It has never been stuck on its heritage, fine as it is. It has always added to that, been inventive enough to keep its watchmaking feeling alive.” n Available exclusively at Eric N Smith Diamonds and Design, 193-201 Ayr Road, Newton Mearns, Glasgow G77 6AE, 0141 639 3344, www.ericnsmith.co.uk

BUSINESS QUARTER | AUTUMN 11

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T HERE ARE STORIES THAT DESERVE TO BE CAPTURED FOREVER.

Whether it’s a transatlantic crossing on a sailboat with friends, or the birth of a child, there are precious, life-changing moments that deserve to be recorded forever. What will yours be? Let our engraving, enamelling and gemsetting artists immortalise your legend. A Reverso just for you.

GRANDE REVERSO ULTRA THIN. Jaeger-LeCoultre Calibre 822. Patent 111/398.

YOU DESERVE A REAL WATCH.

197-201 Ayr Road , Newton Mearns, Glasgow, Scotland, G77 6AE , Tel 0141 639 3344

MOTORING

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MOTORING

pure tax avoidance

Lawyer George Frier was presented with a few questions when he took the new BMW 320ED to the roads. But he found out one thing – Efficient Dynamics lives up to its initial promise

OK, other cars, other BMWs, might do it a wee bit faster, but in reality does it matter to anyone other than Jeremy Clarkson?

Corporate lawyer plus BMW equals cliché.

Smooth, hard driven, pricey but high quality and reliable. But what about the car? I am at BMW dealer Douglas Park to do due diligence and report on the new 320ED saloon retailing at £27,900. As one on his fifth BMW, currently driving a 5 series Touring (petrol, automatic) which is great but thirstier around town than a Geordie on a stag night, how will I react to a diesel boasting 68mpg average? Yes, 68mpg in a BMW. Usually this is only possible if you switch off at the top of a hill and coast to your destination.

So what is ED? It stands for “Efficient Dynamics”. It could easily be Elegant Design – the test car sparkles in Alpine White, white being the new silver. The silhouette is one of the best known, given that it is a top ten seller across the UK. BMW has always been synonymous with driving pleasure, so is this about Engineering Design?

They are one of the few makers to stick with rear wheel drive to provide the optimum 50/50 front/rear weight distribution. With this model, however, have the accountants been put in charge? With a CO2 emission of 109 grams/ km, annual road tax of £20 and a class-leading benefit in kind (BIK) charge of only 13% (beating its slower, thirstier rivals, the Audi A4 and Mercedes C220), has the Ultimate Driving Machine been emasculated? Does ED mean Economical but Dull?

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First impressions are: Usual BMW. Understated cockpit design, high quality finish. The driving position and ergonomics are excellent. The cabin could be a problem for Scotland rugby star Richie Gray who might need a convertible, but it is more than comfortable for a six-footer, although the back seat would not be comfortable for three adults.

The engine starts with a muted burble. Both inside and outside you would know it is a diesel from the slightly obvious vibration on tickover. I am heading to Edinburgh and at the first lights I get hooted at by the car behind (a BMW, naturally) for not moving off on the green. The fuel saving automatic stop/start has kicked in, restarting only when you depress the clutch. You quickly get used to it.

The transition from slip road to outside lane is smooth through the six-speed gearbox which is a delight to use. The engine has a surprising eagerness that causes me to ease off lest I attract the attention of Plod. There is no difficulty keeping up with the traffic (a heavy flywheel apparently helps) or indulging in traditional BMW pastimes such as tailgating traffic which has the temerity to be in the (my) outside lane.

Tyre rumble from the low-resistance tyres is a little bit intrusive but wind noise is not. On motorway gradients or passing slower traffic, you rarely need to drop a cog such is the torque (low‑end pulling power) of the >>

BUSINESS QUARTER |AUTUMN 11

MOTORING

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Facts CAR: BMW 320ED PRICE: £27900 OTR INSURANCE GROUP: 29 C02 EMISSIONS: 109g/km POWER/TORQUE: 163ps PERFORMANCE: 0-60mph/8 seconds FUEL CONSUMPTION: 68.9mpg STANDARD SAFETY FEATURES: 6 airbags Stiff ocupant cell 5 star N Cap crash tested Run flat tyres.

diesel even in eco-friendly guise. And if you forget to use the right gear, an illuminated numeral shows when you should change up or down to the optimum gear for engine flexibility and economy. Damn their Teutonic efficiency!

Stop-start around Edinburgh is as tedious as anywhere but with the consolation that I am using less fuel than those around me. The gauge has barely moved since Glasgow, and it must be contributing to cleaner air around town. Well, the trams aren’t.

Meetings over, I take the scenic route home via West Linton and across to Lanark – a loop through the Borders to try it on a mixed A-class road. It does not disappoint. Cornering is supremely composed, and a high average cross country pace is comfortably achieved.

OK, other cars, other BMWs, might do it a wee bit faster, but in reality does it matter to anyone other than Jeremy Clarkson? It is more than powerful enough, but more importantly the diesel engine is extremely flexible. Once home, I check the mpg and despite my best efforts to be uneconomical it has delivered about 58 mpg. Astounding!

So this is a car which delivers 98% of usual BMW qualities coupled with a Calvinist distaste for drinking. Faced with an Engineering Dilemma of how to beat the Chancellor’s CO2/km threshold, the result could have been Extremely Disappointing.

It is not.

You should never do a deal just for the tax breaks. It still has to be a good deal. So is this a corporate acquisition I would recommend?

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Exceptional Drive: George Frier is impressed with the BMW 320ED Well, it depends on what you want. At these emission levels its exhaust is peppermint fresh.

Collectors of Shell points will lose out, given the 900-plus mile range between refills. The Chancellor’s deficit reduction plans will be in disarray as savvy fleet buyers take advantage of the 100% first year capital allowances, low leasing costs, and 13% BIK liability to slash the tax charge.

Would I buy one? It’s a bit small for my family needs, but the 520 ED due later this year will be very tempting if the engine copes with the larger body and still beats the threshold.

Is it still the Ultimate Driving Machine? Not quite, but it is probably the Ultimate Combination of Great Driving Machine in a

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Highly Tax Efficient Package. ( I know that’s pretty wordy, but then I am a lawyer.) “Tax avoidance can still be fun” would be one description. If you or your company are in the market for a compact executive saloon, and you do a lot of (especially) motorway miles, the question is – why wouldn’t you want one?

It’s a no-brainer. n George Frier Head of Corporate Law, McClure Naismith LLP gfrier@mcclurenaismith.com Thanks to Douglas Park BMW, Glasgow for provision of the test car.

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320d eD Saloon

68.9mpg 163hp

Official fuel economy figures for the BMW range: Extra Urban 26.2-78.5mpg (10.8-3.6l/100km). Urban: 14.6-56.5mpg (19.3-5.0l/100km).

Combined: 20.3-68.9mpg (13.9-4.1l/100km). CO2 emissions 325-109g/km. *offers available to business users only, figures exclude VAT. Participating dealers only. Not available in conjunction with any other offer. Figures include service maintenance and repair for the duration of the contract. Hiring examples are based on 36 month BMW Corporate Finance agreements for the model shown, a BMW 320d EfficientDynamics Saloon, a deposit of £1,065.00 followed by 35 monthly rentals of £355.00, mileage charge in excess of contract mileage 8.68 per mile. All agreements are based on a contract mileage of 30,000 miles and are inclusive of metallic paintwork. Vehicle condition charges may apply at the end of your agreement. Figures are correct at time of publishing and are subject to change without notice. All hiring is subject to status and available to over 18s in the UK only (excluding the Channel Islands).

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MORRIS ON WINE

Par for the main course The invitation to review wines made by his golfing heroes suited George Morris to a tee I’m always suspicious of extending a brand into unlikely territory. Call me old-fashioned, but I’m not sure about all the celebrity endorsement of food and drink products. I’ve always been wary of Paul Newman’s barbecue sauces, Linda McCartney’s vegetarian pies, and Lloyd Grossman’s pasta products.

So when the editor at BQ asked me how I felt about trying some wine produced by some of the world’s greatest golfers, my first reaction was to look at the calendar and make sure it wasn’t early April. Not that I am immune to a decent glass of Merlot, as chairman of Morris & Spottiswood, a third-generation family business with a turnover of £80m and with 500 employees, I have done my fair share of wine imbibing, often in the interests of business development and relationship building.

Then when I heard that the esteemed Turnberry Hotel was involved with this, I began to sit up and pay some attention. The hotel has launched a new selection of wines created by famous golfers. I found out that John Daly, Retief Goosen and Arnold Palmer have all branched out into winemaking and Ralph Porciani, director of operations at the hotel, thought it would be good idea to try them out. Well, if Francis Ford Coppolla and Cliff Richard can own vineyards, then why not Arnie? But, John Daly with his “grip it and rip it” philosophy... I wasn’t so sure.

If you’re a fan of Arnold Palmer – and who

isn’t – then sitting in the 1906 Restaurant overlooking the 18th green of the Ailsa course and opening a bottle of his Cabernet Sauvignon is a personal act of homage to the grand master. Was I convinced? Actually, his Cabernet Sauvignon 2007 had the initial satisfaction of a long, straight drive up the fairway. Finished off with 10% Merlot grapes, I found it nicely balanced and surprisingly drinkable. The Santa Barbara Chardonnay had all the taste of a nice 25-foot putt going straight into the cup on a sunny afternoon.

Moving on, Retief Goosen’s “The Goose” Sauvignon Blanc 2008 was another tantalising white with championship potential, while his Expression Cabernet/Shiraz 2007, had a zest and steeliness that tested my tastebuds.

I approached John Daly’s offering with obvious trepidation, but his Lion’s Chardonnay from Western Cape, South Africa, was rich in colour and – like the man – it was roaring with great character. There was the dusty taste of South Africa in there. Hands up, I was surprised how well these wines worked. The wines at the hotel start at £36 a bottle.

In my early life I was a lawyer with Macroberts in Glasgow before undertaking an MBA. Then I joined the family business 15 years ago and we’ve grown significantly since then.

I’ve always been interested in how our brand values dedicated to customer service win business and repeat custom. And, while sipping Arnie’s tipple, my thoughts turned

to our own brand extension. Wouldn’t it be fun for Morris & Spottiswood to have our own vineyards making a few bottles of vintage wines to be enjoyed by our customers?

But our chief executive Chris Sexton need not worry. I soon regained my faculties and think we should stick to what we are great at – serving our own customers as shopfitting and fitout contractors and facilities managers. For me, a must safer bet than wine-making. n

If Francis Ford Coppolla and Cliff Richard can own vineyards, then why not Arnie?

His Cabernet Sauvignon 2007 had the satisfaction of a long, straight drive

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INTERVIEW

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Hart of the matter Scotland’s business schools are competing in an increasingly tough global market place. Susan Hart, the Dean of Strathclyde Business School, talks to Kenny Kemp about her own academic path, her vision for the school, and how teaching and research can add value to businesses on a world stage The opening up of an inquiring mind is certainly one of Scotland’s greatest strengths.

Our universities and research institutions are increasingly recognised not only as the combustion engines of value creation but big businesses in their own right employing thousands.

And the sub-set called “post-graduate business education” – often eyed with suspicion by condescending liberal arts intellectuals – is not only a valuable earner but a matter of national economic significance.

Commerce remains the heartbeat of Glasgow, so you would expect the city to have a vibrant business school – and it does.

Strathclyde Business School – in the centre of the city – is a place of “useful learning” where tens of thousands have had time out to reflect on the world of management. The dean is Professor Susan Hart, a very compelling academic who firmly places her footing on the planks of that shaky rope-ladder bridge which divides academia and everyday business.

“We pride ourselves in our status,” she says, sitting in her book-lined Cathedral Street office. “We have built up our contacts with commerce and industry and enjoy close partnerships. That’s the way to go. There is a lot of added value in our programmes. It’s to

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do with management education, including learning material from industry. We have industry practitioners delivering modules on learning. This is all supported by our teaching and research staff.

“To be a successful manager, there is ‘knowing’ and then there is the skillset that you have, which is the ‘doing’, then there is also the awareness of being a manager; that’s the ‘being’ part. We are very much about helping the individual explore this.”

Scotland’s business schools are attached to our seats of learning, which makes them a different kind of beast to INSEAD, IMD or IE Madrid which are discrete and privately well-funded organisations.

“We are very clear on what other business schools are doing,” says Hart. “We keep our eyes and ears open regarding the ‘competitors’ and the international competitors. We have to know what are the norms in the places that are ranked the best.”

If Strathclyde Business School was a standalone company it would have an annual turnover of around £30m, with its single biggest outlay being the intellectual capital inside the brains of its teachers and researchers. While Susan Hart is primarily an academic, she is also the managing director of

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a “business” which requires leadership and direction.

It is interesting to track the path of the professor and see how she ended up running our top business school. Indeed, her academic life has come full circle. A pupil at Bearsden Academy, she arrived at the Rottenrow campus, gaining a degree in French and Marketing from the arts faculty. After graduation, she went to work in France, working at the Universite de Technologie de Compiegne (UTC), 45 minutes by train north-east of Paris, and where the First World War Armistice was signed in a train carriage in 1918. She worked as a translator working on several engineering projects which helped build her technical perspective – and vocabulary. Hart had gone to work with a colleague who was introducing a novel approach to teaching English, based on a more experiential and natural acquisition of language, rather than the deeply-dull ways of plodding through grammar. This style of teaching was then sold to schools and colleges in France.

But a job working for Procter & Gamble as a sales representative based in Glasgow, lured her back to the UK. This was the tumble and spin of real business – selling laundry products

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Value creation: Strathclyde Business School in Glasgow city centre

We have built up our contacts with commerce and industry and enjoy close partnerships. That’s the way to go. There is a lot of added value in our programmes

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such as Ariel, Daz, Surf and Lenor to the supermarkets, with Asda emerging as a major force in the UK, and Safeway still owned by the Americans. It gave her an insight into how brands were sold.

Susan Hart enjoyed the sales life but, in the mid-1980s, saw an interesting opportunity back in academia working on a research project about “product deletion”. She was reunited with a former tutor, now at the Athens School of Economics and Business Science, and her research led to a PhD and then a lecturing job at Strathclyde.

She explains: “This was to do with how companies might improve their ‘deletion’ process, because typically companies build up their product portfolios and they innovate and introduce new products and new lines, but they are generally poor at getting rid of the older products.”

One of the big barriers for business was the lack of accurate data to make informed decisions.

“This has been transformed with computer technology today and the data that we collect,” she says. “In the mid-1980s, I was working with Honeywell on some airconditioning lines. They were bringing in new air-conditioning and air-cleaning units for hotels, restaurants and cafes in Europe. But there was an issue of timing. Once you start bringing in new products, you had to downsize the supply chain, yet there were major customers who might be dependent on the older products – this might have been a lifeline to that customer.”

“Honeywell, in common with the other companies I had previously researched, had difficulty making this decision and then implementing it.”

“Logically, you had to clear out the portfolio to be able to make space for new products, including managerial time to market your new products,” she says. “But there are practical barriers to doing this.”

While the global fast moving consumer goods companies (FMCG) – such as Nestles, Unilever, P&G, Heineken – have managed to tier their product categories and the way they market these categories into “super”, “national” and “regional” brands and then resource the marketing, it is always much more difficult >>

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INTERVIEW

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in business-to-business markets where the markets are narrower and fragmented.

“They have much more in the way of small clusters of key buyers,” says Hart. “Whenever you take out a product from your range, the issue is that the overheads of that product have contributed to the bottom line, and this is now split among the ones that are left. This can reduce the profitability of a business.”

She recalls conducting practical research for a UK sweet manufacturer which was cutting back on several well-known chocolate bars.

One of the stumbling blocks was that they were all made on the same production line.

“The problem was that none were particularly big sellers, but if you took one off the production line, the others would become less profitable because the overheads would be shared across two products instead of three.”

Decisions to kill off a product were delayed – and because they weren’t being resourced, the problems got worse. Even choosing to delete the wrong product can jeopardise a whole business, such as Coca-Cola with its New Coke in 1985. This was a devastating example of how “product deletion” can backfire when the customers don’t want the change.

“While this has been overcome in FMCG and mass market, it is less so in business to business and remains an issue for companies today,” says Hart. “I’ve recently been working inside firms where it is apparent they have unwieldy product ranges.”

Prof Hart has also looked at product life cycles and how the consumer is regularly being encouraged, cajoled and even bounced into purchasing the latest gizmos.

“Product life cycles across all kinds of categories have been shrinking for years, but so too have product development cycles. For example, it might have taken 24 months to bring a new digital printer from concept to market, now it’s taking 12 weeks, and that’s not a new statistic.”

For companies, she explains, it is a matter of keeping the product lines manageable and not just allowing a proliferation of products because it is possible and easy to do so.

“From my time at P&G, product proliferation was astonishing. You can go to a supermarket shelf and look at the laundry products. There are 25-30 brands, but essentially there are two

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or three major companies making it. The big companies are offering different products for what they say are different segments of the market. Taking the laundry products, there are many brands on the shelves and all the different markets segments are perceived to be covered. But the theoretical question for me, as an academic interested in marketing, is: ‘Are they all truly targeted at different segments and to what extent do organisations proliferate products to cover all kinds of eventualities? And what is the cost of that if the segments are not distinct and are all of the new products better or just different?’”

Most FMCG businesses now have a version of sales and operations planning (S&OP) which helps improve sales and marketing capabilities by deploying across-the-business teams from various departments in unified operations. This can improve top-line growth by 7-15% and increase the success of new product launches by 25%. These are exactly the kind of issues that a busy business leader doesn’t have time to consider; and this is where a business school scores.

“Reflection is important for us,” says Hart.

“We have a suite of modules that we teach that are called ‘The Reflective Practitioner’. It is constant questioning of what you are doing and not simply accepting the way things have been or the way they will be in the future.”

Susan Hart went to America and worked as a lecturer in Penn State University teaching marketing and doing post-doctoral work in the 1990s, before taking up international appointments in Australia at Griffith University in Brisbane and Murcia, Spain. After returning to Glasgow for a while she was offered a professorship at Heriot-Watt University in Edinburgh.

“Everyone was very keen to look at research assessments,” she says. “The first big assessment exercise in Scotland happened at the end of 1992 and everyone was very keen on publications and I had a lot of publications because I was focused on my research. I had been doing my teaching and work with executive education programmes. In the early 90’s, the academic world was focusing on research assessment, so people with a strong track record in research were much in demand.” This, coupled with the applied and

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practical nature of Hart’s research, meant a lot of work came her way.

She remained at Heriot-Watt for three years, playing a part in the creation of the Edinburgh Business School, linking its full-time MBA to the distance learning offering, which was selling fast. She was then offered another position at the University of Stirling’s Faculty of Management, travelling from her home in Glasgow.

She says: “I was very briefly head of department but in 1998 I was expecting my second child, Allan, and a job became available at Strathclyde. I was very happy at Stirling. It was a very strong and active place, and we were very productive in the marketing department. But with two young children I wanted to be nearer to home.”

She arrived back at Strathclyde in 1999 when the business world was in the grip of the dotcom explosion. There had been an MBA programme at Strathclyde since 1966, and it was recognised as being one of the oldest in the UK. “I joined the department along with a number of others and it was extremely well-run,” she says. “But I stood for election as vice-dean on the research side, because I felt we could be doing more to promote the school’s collective research. I knew people from across the business school and I felt we weren’t making the most of our ability to promote the totality of what we were doing as a collection of researchers.”

Strathclyde has a wealth of expertise in accounting and finance, economics, management science, human resources and marketing. Prof Hart felt there was a depth that was not being properly presented to the outside world. This was at a time when it was clear that business at large needed a more converged understanding of business principles. Her inaugural lecture was about marketing metrics and how to evaluate the success of spending on bringing products to market.

“As a Business School, we were now able to look at performance management from a number of different academic perspectives and that was significant,” she says. “Then we had the Hunter Centre for Entrepreneurship, funded by Sir Tom Hunter, but

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entrepreneurship doesn’t just happen in one department. The centre was spearheading research and the dynamics of behaviour and results but we had others looking at it from the perspective of financing for entrepreneurs.

You can’t be an entrepreneur without understanding your marketing, so they have to be closely related.”

By 2005, there was increasing confusion about the positioning of Strathclyde Business School and the Graduate School of Business founded in the 1990s which ran the part-time and international MBAs programmes. The solution was one front door – which is the University of Strathclyde Business School – offering MBAs and masters qualifications. Professor Hart became the Dean of the School in 2008.

“An MBA is a good product for a university to have,” she admits. “It brings in post-graduate experience and links to business and industry.

There are loads of excellent leaders and managers who don’t have MBAs, but on the other hand, those with the qualification have become more prevalent in the corporate and business world.”

Strathclyde’s full-time MBA is international with 18 different nationalities in nine international centres, including Hong Kong, Singapore, Malaysia, Switzerland, Greece, Bahrain, Dubai, Oman and Abu Dhabi, with a new development now being rolled out in India. The fees for an MBA are variable.

London Business School is now charging £53,000 for a two-year programme, while Strathclyde Business School charges £23,500 for a one-year, full-time MBA programme. The school is also launching a new MBA - the MBA 25 - which has been designed and will be delivered in collaboration with William Grant and other Scottish businesses. Then there are the specialist masters programmes, which at the business school are all “premium” products including an MSc in marketing, international management, and business information technology, all at £12,000 for a one year course.

Strathclyde Business School has around 600 postgraduate students from overseas every year with a further 1,200 in centres around the world.

“It is a very internationalising experience,” says Hart. “People tend to focus on one or

Business leader: Professor Susan Hart

An MBA gives a more general perspective of all the elements that are intertwined with managing a business two areas of business, like accounting or sales and marketing, human resources or general management, and detail of a business doesn’t get properly absorbed. What an MBA does is give a more general perspective of all the elements that are intertwined with managing a business.”

Prof Hart says Strathclyde’s focus it to help people become better managers. “It’s about learning to manage and learning to lead. For this there are two important elements – you need to understand the nature of the business you are in; and what are the competitive and distinctive advantages that you have, and it’s about how you interact with people to make the most of that and to exploit it across the

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markets. It is a personal learning programme that people have to go through.”

Strathclyde’s MBA students have also introduced the MBA Oath, which was pioneered at Harvard University.

“We are very focused on sustainability and social responsibility,” says Hart. “Within Strathclyde Business School, in every department there are researchers and academics who are looking at an interrogation of the status quo all the time. They are not passive observers of what happens in business without the capacity and the voice to criticise and that is important for our teaching and research.”

“Partnerships are important for commercial organisations and really we run the business school as if it is a commercial organisation.

“I’m running a business here. I’m also running it as part of Strathclyde University where I sit on the executive board. The principal Jim McDonald is the big boss, and the four deans sit with him, the Vice Principal and the other senior administrators on the executive team.”

All decisions have to be approved by the University Court, the external monitoring body, and the Senate, which represents the academic interests.

Meanwhile, Prof Hart’s colleagues have been sifting through candidates for the International Leadership School in Scotland which begins its first programme in January. A decision to close the Scottish Hotel School several years ago was controversial, so the ILSS is an ideal partnership between Strathclyde, Cornell University in New York and École Hôtelière de Lausanne in Switzerland. It pools the expertise of Cornell in asset management of hotels and Lausanne’s international reputation for culinary and hotel-keeping excellence. The International Leadership School in Scotland will be chaired by Peter Lederer, chairman of Gleneagles Hotel, with David Cochrane, chief executive of the Hospitality Industry Trust in Scotland, taking on the role of chief executive.

For Susan Hart, this is exactly the kind of collaboration between academic and pure business that will help raise the bar even higher in Scotland’s key hotel and tourism industry – and ensure that links between the ‘knowing’, the ‘doing’ and the ‘being’ are suitably entrenched in business life. n

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INTERVIEW

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INTERVIEW

Sailing through the eye of a storm Wallace Mercer was one of Scotland’s most outspoken business entrepreneurial figures. But his premature death forced Iain his son, then in his late 20s, into the frontline to take on a property company in the throes of a recession

On the Richter scale of business, the death of a charismatic boss is a seismic event. When such a leader dies prematurely, succession planning is thrown out the window, disaster recovery kicks in and it becomes a battle for survival.

Iain Mercer, at 33, is now a battle-hardened property investor. His father was Wallace Mercer, the colourful and controversial property tycoon who was once loved and loathed in equal measure by Edinburgh football fans. Wallace was the audacious visionary who put a substantial chunk of his personal fortune into Heart of Midlothian Football Club – and later earned brickbats for suggesting Hibernian, their sworn rivals, should share a football stadium.

While it was more than enough that his death was a personal family tragedy, it was also a baptism of fire for Iain, picking up the pieces as the biggest recession in 80 years kicked in.

“It’s been a tumultuous last five years, both corporately and personally,” says the slim and bespectacled Mercer, sitting in his converted mews office in Edinburgh’s West End. “There isn’t a day that goes by without wondering what my dad might think or do,” he says, reflecting on his father’s life. “Or what his advice would be. He was the biggest influence on my life. He survived at least two proper recessions and when the last one came around in the mid-1990s I was at an age where I could understand the impact and implications, both economically and for the family.”

Wallace Mercer was running Dunedin Property

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which he built up from nothing to a turnover of £150m, before his asset base collapsed. In the mid-1990s, after selling out to Hearts, he went to live in France before returning to set up Almondale Investments with Cosmopolitan set up from the sale of the shares from the football club.

“In those days it was good going to build up such a portfolio from nothing,” says Iain Mercer. “Then it went into reverse and he had to dismantle it all. At that time, my father said it was one of the hardest things that he ever had to do.”

But Mercer senior survived and was rebuilding his business.

Mercer junior’s childhood memories involve being with his father on building sites and looking at property.

“I always had an interest in property and what he was doing,” he says. “We used to spend Sundays driving around building sites, seeing contractors and finding out what was going on.

“In his latter days, when we were redeveloping the Hearts football stadium at Tynecastle, I worked for six weeks during the summer as a labourer on the building site, digging the foundation pits for the new stands. This gave me a basic understanding of how these buildings are put together. I gained a working knowledge and that has stood me in good stead.”

But a career in commercial property was not Iain Mercer’s goal. He set out to become a sports broadcast journalist, although he undertook a business degree at university. >>

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INTERVIEW

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“I wasn’t an academic by any stretch of the imagination but my real drive was to get into broadcasting,” he says.

He worked at the BBC in London and Radio Five for a stint, before working for Radio Forth where he spent two years in front of the microphone. Then came that awful dilemma that only those in family business can properly appreciate – do they continue to climb the ladder in their chosen career or do they join the family business, with all that entails working with father, mothers and siblings?

Iain Mercer was in his early twenties.

“I achieved what I set out to do in radio and broadcasting and saw its limitation for me in Scotland,” he says. “Do I move to London or take on a new challenge in the family business?”

He decided to start work with Wallace Mercer and his mother Anne, who has worked as the group finance director in the business for 30 years. The deal was to give it a go for a year and see how it worked.

He says: “In the end we stuck with it and that’s when we began to build up and develop Cosmopolitan Investments, which is now the active part development vehicle of the group.”

Iain Mercer’s life was jolted in 2006 when Mercer senior died of liver cancer.

“He was only 59,” he says. “He hadn’t been keeping in the best of health but we didn’t know what the indications were. When it was finally diagnosed, it was all very quick and sudden. People lose their fathers every day of the week, but not everybody has to deal with it in such a public way. There was enormous press coverage; we didn’t expect the amount that there was.”

Iain and Anne vowed to press on, partly as a tribute to Wallace, and partly because there were few other options.

“We’ve worked very closely together taking a decision to carry on and to take our business forward,” he says.

For Cosmopolitan, the double whammy was that the UK dipped into its worst commercial property recession since the 1930s. The baled-out banks were destroying overborrowed property companies. How did Iain Mercer manage?

“We survived by sticking together. We’ve hung in there,” he says.

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I’d been in the business for a few years and it wasn’t as if it was thrust upon me and I knew nothing about property How did the banks view the business? Were they concerned?

“We have had a long-term business relationship with the Bank of Scotland,” he says. “There’s a trust there and a track record.

I’d been in the business for a few years, and it wasn’t as if it was thrust upon me and I knew nothing about property.”

But Iain Mercer conceded he was still building his own track record, to prove his own abilities.

“To an extent, I still am,” he says. “There’s no question the economic crisis has been enormous, so in some respects we’ve achieved a lot. We stabilised the business, we’ve done our own cost-cutting measures. We managed to keep the group portfolio together.”

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What did Wallace pass on?

“I like to think that I inherited some of his drive and ambition. I’ve always been driven.

He was extremely single-minded and once he made a decision that was it. He taught me to surround myself with good people.

I think that’s important in business, especially in property, which is very much a personal business.”

Cosmopolitan Investments still uses a lot of the professionals who were employed by Wallace Mercer. The architect James Clydesdale has worked with the Mercers for 30 years, while contractor West Lothian-based Ashwood Scotland has undertaken all the projects.

The portfolio includes a mix of development from Axwel Yard at Broxburn; retail units in Dalkeith High Street; shops in North Berwick, Harbour Point at Musselburgh; offices on the Heriot-Watt University Research Park campus, to the flagship 70,000 office on the Innovation Park at Bellshill where Auto Trader and Balfour Beatty are clients and rentals are between £10.50 to £11 a square foot. In all, the group has 30 properties in Scotland that it owns and manages. Rent values are over £1m a year, with valuation that hit £30m in the peak of the market.

“Our strategy was to create value out of redundant properties,” says Mercer. “The first phase at Bellshill went extremely well but the second phase hasn’t flown. The second building, John Logie Baird House, was completed at the end of 2006 – 35,000 sq ft – but is still looking for tenants. This coincided with the start of the recession and competition from nearby Maxim Office Park and others in North Lanarkshire on the M8 corridor. Across our portfolio we’re 85% occupied; our single biggest vacancy is at Bellshill. There is still a lot of space overhanging the market there.”

Nearer to Edinburgh, Cosmopolitan’s fortunes have been much rosier with Birch House on the Bankhead Estate at Sighthill, one of Iain Mercer’s initial success stories. This was a redundant building which he bought, refurbished and let to Petroleum Geo-Services which took over MTEM Ltd in 2007 for £138m, the largest spin-out from Edinburgh University, raising £7.4m in 2004 from Scottish Equity Partners.

AUTUMN 11

“We were the first speculative developers in five years to put up new property on the Heriot-Watt University Research Park,” he says.

“The land is owned by the university and we lease the space. We felt we could put up new-build space at the right size and price.”

Heriot-Watt Research Park has attracted the Scottish Environment Protection Agency, Scottish Water, Renishaw and Scottish Business in the Community. Cosmopolitan’s first development, completed on the campus in 2005, is fully let. Then Mercer was asked by the Weir Group to build a new building for relocation from the Gyle. A third building site is awaiting better funding conditions.

“In my opinion, Heriot-Watt is the best located research park in East Central Scotland,” he says. “There’s a cross-pollination between academic and business life. While the BioQuarter, on the south side of Edinburgh, has had a lot of money lavished on it by Scottish Enterprise and others, I feel sorry for the likes of Heriot-Watt University, who’ve been forgotten about and don’t get as much attention. They are competing with the likes of Edinburgh University who have big pockets.

We’ve actually built something here; delivered it and let it. We’ve done it and it annoys me when I see £50m of public money poured into a scheme where potential tenants I’ve spoken to don’t like the BioQuarter because it’s too expensive and in the wrong location.”

Mercer makes his comments as the partnership of Scottish Enterprise, University of Edinburgh, NHS Lothian and Alexandria Real Estate Equities sees Allan Murray Architects launch a public consultation exercise and develop a masterplan to expand the £600m project.

“I’ve real concerns whether the BioQuarter can be a commercial success,” says Iain Mercer. “When academics – who are intelligent individuals – come out of the universities with their spin-out ideas, they get a shock when they face the commercial reality that they have to pay rent, rates and service charges. You can’t go on for ever getting subsidised. You need to provide good quality accommodation at a decent price.

“The reality is the science and research and development sector in general is going to be a huge contributor to Edinburgh’s economy.

Academics get a shock when they face the commercial reality that they have to pay rent, rates and service charges I’m not sure we’ve got it set up right at the moment.”

Mercer has ploughed his own furrow without any assistance from Scottish Enterprise or Scottish Development International, in attracting new companies into Scotland.

“There has been a direct focus on Edinburgh BioQuarter and others and from, what I can see, not immediate help for others,” he says.

“I fail to see how Scottish Enterprise can put £25m into a new development at the BioQuarter when they are still sitting with a white elephant and a bio campus near the Bush, which was built and is still empty. If you’ve a problem there, why shovel money down a black hole in an untried and untested location? Private developers with a track

79

INTERVIEW

record who have delivered something are competing against heavily subsidied properties elsewhere. That’s my main issue with it all.”

He admits there have been some business failures – including retailers – over the last three years, but that tenants who have been running their business tightly have been pulling through.

“They are the ones who are surviving,” he says. “We’re fortunate to have a clutch of great partners. It’s about balancing whether you want an empty place or renegotiate to help the business survive.”

One of Mercer’s latest developments is the creation of a Sainsbury’s Local at Barnton on a site which has been in the portfolio since the 1970s. It stands behind the eyesore that is the old Barnton Hotel, a listed landmark which has been allowed to fall into terrible state of repair.

He says: “We bought a red brick building at Barnton in 2001, when it was WHSmith and we redeveloped the property for Bell Security, now owned by Swedish company Niscayah.

The company was looking for a way out and we worked with them. We’re now redeveloping it for Sainsbury’s.

“This is great because we’re finally back on the development trail. It’s a small development of 4,000sq ft but we’re funding it without any borrowing. We manage our portfolio and don’t farm it out to third parties, so we get to hear what’s happening on the ground.”

Mercer says this was an opportunity to put in place a good convenant with a blue-chip client such as Sainsbury’s. He was surprised by the local community opposition – he had to knock down a tree to gain some more space – but eventually it went through planning in February 2011. The store is planning an opening soon.

“We need companies like Sainsbury’s to drag us out of this recession,” he says. “They are bringing new jobs and investment to the area.

This local Sainsbury’s has re-invigorated the whole parade.”

It’s clear that Iain Mercer is a sleeves-rolled up individual. He’s has emerged from a tough period in his life with plenty of the DNA that made his father so entrepreneurial and feisty. Time will tell if he can replicate Wallace Mercer’s success, but he remains, like his dad, his own man. n

BUSINESS QUARTER |AUTUMN 11

BIT OF A CHAT

with Jock Yuler >> Virgin fireworks rock The fireworks on the final evening of this year’s Edinburgh Festival were magnificent.

The streams of phosphorescent white light streaming down on Edinburgh Castle Rock were wonderfully surreal – the Scottish Chamber Orchestra in lustrous flowing sound, too. It was Virgin Money’s first sponsorship of this massive public occasion and they were fortunate to get away with a still, dry evening.

Virgin boss Jayne-Anne Gadhia welcomed a gathering of guests in the Scottish Café at the National Gallery of Scotland. She said Virgin Bank’s first lounges were due to open in St Andrew Square and she couldn’t resist a tram joke saying that she hoped the tramline would eventually make it right to the front-door, as planned. Now, here’s a challenge to any other public speakers in the capital – see if you can make a speech without a single reference to our little local infrastructure difficulty.

>> Deal delight for Wood Group Is there something in the water in Aberdeen? Ahh! Yes, oil of course. I’d like to congratulate the people at John Wood Group for their success in the Deal & Dealmakers 2011. The £1.86bn sale of its Well Support Division to General Electric won Deal of the Year at the Scottish Business Insider Deals & Dealmakers awards in Glasgow.

This cleared the decks – or should that be derricks – so Wood Group was able to buy Bob Keiller’s PSN, company while returning more than £650m to shareholders. The merger of Wood Group Production Facilities and PSN has created a Scottish-

BUSINESS QUARTER | AUTUMN 11

AUTUMN 11

based world leader in energy services. And Scottish Equity Partners’ Stuart Paterson was Dealmaker of the Year. Not to be confused with his namesake, Calum, Stuart has helped with equity investments in Livingstone-based Elonics, Metaforic, set up in 2006 by computer games vets Neil Stewart and Andrew McLennan, and Picochip. Among the other gongs was Cupid’s flotation on AIM as Investment Deal of the Year and Dealmaking Team of the Year was Weir Group. The company also won Acquisition of the Year award with their deal to buy Malaysian-based Linatex. That’s a lot of money being returned to the banks to pay off loans.

So surely this must help.

>> The loan arrangers Why is nothing being done about the next big tragedy – pay-day loans? Borrow £100 at Wonga at its exorbitant APR and in just seven years you owe more than the US debt at $14trillion, says money-saving expert Martin Lewis. I feel the ease of access and the massive marketing hype for Wonga and others is all going to go badly wrong.

>> Good Evans, what a drag.

Poor Chris Evans. He’s admitted he has given up the demon drink. Lucky him.

Some of us are still punch-drunk from SMG’s mad decision to buy Virgin Radio and Ginger Media for £220m. Andrew Flanagan, now head of the NSPCC, was boss at the time.

Ultimately, that led to SMG having to jettison the Herald newspapers to pay down the debt.

So you might have had a headache or two from a champagne lifestyle, Chris, but at least you’ve got millions to spare!

>> On the Buses Reg Varney and Blackie, eat your heart out. First Group asked its new recruits to make their way to the Granite City without switching on the sat nav. The new graduate intake was instructed to travel from their homes around the UK to First Group’s HQ. Linda Guthrie, the head of HR, was spot-on when she said it was good way to getting her new managers ready for work with a transport company.

Tetanya Nedilko, a 25-year-old, from Islington in London – a qualified engineer – said: “I’m looking forward to getting my hands dirty!”

Full marks to Tetanya and her cohort for a safe arrival in oil capital. That was where I started my career, and look at me now!

80

>> I am Spa – tick us Here’s someone delighted to be in hot water – well, tepid at least. My dear friend Peter Taylor tells me he is delighted that the Spa at Blythswood Square has been shortlisted by Spa Traveller for three awards. It’s your votes that count, folks (God bless, Hughie Green!). So if you’ve tried the spa and agree, vote with your mouse. It would be great for Peter and for Glasgow if the hotel manages to be voted the UKs Best New Spa.

>> And a parting shot on … leadership “Project management hell is brought about by the four horseman of project apocalypse.” (1) The wrong problem, (2) the wrong sponsor, (3) the wrong team, (4) the wrong process. Get these wrong and your project is doomed; get them right and it takes a stroke of evil genius to make it go wrong.

How To Lead, Jo Owen. Published by Prentice Hall. Price: £12.99.

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ISSUE FIVE: AUTUMN 2011

A TICKET TO PARK The journey from airport parking to self-storage HART OF THE MATTER

How a dean’s vision in education and research on a world scale is adding value to enterprise

TAKING BABY STEPS

Travel highchair success took even its inventor by surprise

THE SHOW’S ON THE ROAD Tosca, The Barber of Seville, and the drama of Scottish Opera

HOWIE DID IT ISSUE FIVE: AUTUMN 2011: SCOTLAND EDITION

The entrepreneur who developed an iconic Scottish brand on a handshake, but managed to keep his wellies on the ground BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

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EVENTS

AUTUMN 11

BQ Scotland business events diary gives you time to forward plan. If you wish to add an event, business exhibition, or a public seminar to the list, send it to: editor@bq-scotland.co.uk and please put ‘BQ events page’ in the subject heading

September 28 Business Forum Scotland, Roxburghe Hotel, Edinburgh. CEOs of TreeGreen and Funky Moves present with panel. 5.15-8pm. Contact: businessforumscotland.com/events 28 Annual Dinner of the Scottish Chamber of Commerce, Hilton Hotel, Glasgow. 7pm for 7.30. Contact: Lauren McLeod on 0141 204 8316.

29 Scottish Green Awards, sponsored by Insider, Glasgow Science Centre.

Guest speaker: Leo Johnson. Contact: Gillian Ferguson on 0141 309 3423 or email gillian.ferguson@dailyrecord.co.uk

October 1 National Business Convention, organised by Federation of Small Businesses/ Scottish Council for Development and Industry. Speakers include: David Valentine, Laurie Clark, Ken Gillespie, Ian Howie, Colin Neil, Stewart Regan. Murrayfield, Edinburgh – 8am-5pm.

Contact: Julie.fleming@scdi.or.uk 6 Northern Star Business Awards – Aberdeen & Grampian Chamber of Commerce awards and dinner at the P&J Arena, Aberdeen Exhibition & Conference Centre. 6.30pm-1am.

Contact: 01224 343901.

6 Power Lunch Club with Bill Jamieson, executive editor of The Scotsman.

HSBC Corporate, Hobart House, Hanover Street, Edinburgh, EH2 1EL. 12- 2pm.

Contact info@powerlunchclub.co.uk 6 Scottish Leadership Awards (formerly Scotland’s Elite awards), National Museum of Scotland. Guest speaker: Baroness Eliza Manningham-Buller. Sponsored by Scottish Business Insider. Contact: Carly Baxter on 0141 309 1402.

6 Glasgow Chamber of Commerce Business Awards 2011, Thistle Hotel, Glasgow. Contact: Anne Marie Hughes on 0141 204 8325, or Annemarie.hughes@glasgowchamber.org 6 IoD Scotland, leadership lecture with Sue Bruce, CEO of City of Edinburgh Council, University of Edinburgh Business School. 6-8pm. Contact: 0131 557 5488.

10 What Every Family Business Needs to Know. George Stevenson and Martin Stepek, chairman and CEO of Scottish Family Business Association, in seminar for family businesses.

Barncluith Business Centre, Hamilton. 5.30-7.30pm.

Contact: 01698 723346 or info@sfba.co.uk 11 The Jelly, freelancers, homeworkers and entrepreneurs gather for day-long workshop from the Growth Academy and Finance Cornerstone, at Rutland Hotel, Edinburgh. Free Event. 9.30am-5pm. Contact: Imogene@therutlandhotel.com 12 Business Forum Scotland, Grand Central Hotel, Glasgow. 5.15-8pm. PJ Darling of Spark Energy, Ken Morse and Ian McNair of Reactec. Contact: businessforumscotland.com 13 Scottish Renewables: On-site renewables conference and exhibition. Management Centre, Stirling. Contact: Olivia Connolly, 0141 353 4986 or Olivia@scottishrenewables.com 14 Thrive for Technology. Corinthian Club, Glasgow. Speakers: Martin Jones, director, Tantallon Systems and Duncan Macadie of Wolfson Microelectronics, 8-10am. For all Thrive events contact: Ola Lopatowska on 0141 428 3020 or email ola.lopatowska@thriveforbusiness.co.uk 18 Thrive for Services. Royal Scots Club, Edinburgh. Speakers: Catherine Holden, National Museums Scotland and Gareth Williams, chief executive, Skyscanner. 8-10am. Contact: as above.

18 Thrive for Dumfries & Galloway, Best Western Station Hotel, Dumfries.

Speaker: Gordon Rae, owner of Muirhead Farm. 8.30-10.30am. Contact: as above 19 Thrive for Services, Blythswood Square Hotel, Glasgow. Speaker: John Sharkey, chief executive, Scottish Exhibition and Conference Centre. 12-2. Contact: as above 20 Power Lunch Club with Stewart Cunningham, Great Scot Photography, bto Solicitors, 48 St. Vincent Street Glasgow G2 5HS. 12- 2pm. Contact info@powerlunchclub.co.uk

BUSINESS QUARTER | AUTUMN 11

20 The Business Mixer. Sponsored by The Growth Academy. For business owners, corporate leaders and serial investors. Business panel over drinks and canapes. 5:30-8pm.

Tickets £25 each or £65 for three. Quote BQ Scotland on booking for £20 or £50 for three. Bookings through imogene@therutlandhotel.com 25 Thrive for Hospitality. The Corinthian Club, Glasgow. Speakers: Bruce Reidford of Thomas Tunnock and Libby Woodhatch, chief executive, Seafood Scotland. 8 -10am.

Contact: as above.

25 Procurex Scotland, SECC, Glasgow, a chance for businesses to meet public sector buyers in a £9bn market. For details phone 0845 270 7066.

25th CBI Scotland Westminster Reception. Scotland House, Dover House, London.

7pm for 7.30pm. Contact: Colette Cunningham 0141 222 2184.

November

1st Colin Temple, founder of Schuh, delivers a Masterclass with Dundee & Angus Chamber of Commerce. Hilton Hotel, Earl Grey Place, Dundee. 12-2pm.

Contact: dundeeandanguschamber.co.uk 1 Thrive for Services. Royal Scots Club, Edinburgh. Speakers: Gary Kildare, vice president, human resources, IBM; Amanda Jones, head of employment pensions and benefits, Maclay Murray & Spens. 8-10am. Contact: as above 1 Thrive for Property. Scotch Malt Whisky Society, Edinburgh. Speakers: Dorry McLaughlin, chief executive, Viewpoint Housing Association; Jane Gray, chief executive, ARK Housing Association. 12- 2pm. Contact: as above 2 Thrive for Services. Blythswood Square Hotel, Glasgow. Speaker: Lindsay Ironside, operations manager, John Lewis Partnership. 12-2pm. Contact: as above 3 Power Lunch Club with Bill Jamieson, executive editor of The Scotsman. HSBC Corporate, Hobart House, Hanover Street, Edinburgh, EH2 1EL. 12-2pm.

Contact info@powerlunchclub.co.uk 8 FSB East of Scotland Regional Dinner, Caledonian Hilton Hotel, Edinburgh. Keynote by Fergus Ewing MSP, Minister for Energy, Enterprise & Tourism. Open to both FSB members (£45) and non members (£65). Details at www.fsb.org.uk/eastofscotland 10 CBI Scotland Event in Aberdeen. Hilton Treetops Hotel. Contact: Colette Cunningham on 0141 222 2184, or colette.cunningham@cbi.org.uk 11 Thrive for Technology. Corinthian Club, Glasgow. Speakers: Ruth Burns, head of international sales, Touch Bionics; Angela Robb, retails accounts manager, WL Gore.

8-10am. Contact: as above.

15 Thrive for Dumfries & Galloway, Best Western Station Hotel, Dumfries. Speakers: Deborah Firth, co-owner, Hillcrest House, and Chris Brown, business and enterprise manager, D&G Council. 8.30-10.30am. Contact: as above.

17 Power Lunch Club, HSBC Bank, Scotland Corporate Banking Centre, 1st Floor, 141 Bothwell Street, Glasgow, G2 7EQ,. 12-2pm. Contact infor@powerlunchclub.co.uk 18-19 New Start Scotland, sponsored by the FSB, SECC, Glasgow. www.newstartscotland.com 21 CBI Annual Conference, Accelerating Growth, Grosvenor House, Park Lane, London.

Contact: cbiannualconfernce.org.uk 22 The Jelly, freelancers, homeworkers and entrepreneurs repeat gathering for day-long workshop from the Growth Academy and Finance Cornerstone, at Rutland Hotel, Edinburgh. Free Event. 9.30am-5pm. Contact: Imogene@therutlandhotel.com 23 Scottish Asian Business Awards, Thistle Hotel, Glasgow, sponsored by FSB. Contact: www.theasianbusinessawards.info/scotland 23 Thrive for Services, Scotch Malt Whisky Society, Edinburgh. Speakers: Louise Masson, general manager of House of Fraser/ Jenners; Owen Kelly, CEO, Scottish Financial Enterprise 12-2pm, Contact: as above.

29 Thrive for Hospitality, Corinthian Club, Glasgow. Speakers: Julie Cassidy, director of HR, G1 Group; Peter Lederer, managing director, Gleneagles. 8-10am. Contact: as above.

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.

82

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.

more besides:

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).