“You’re hired” – and that may of course be a problem for Sir Alan Sugar, who’s very much used to being his own man these past 40 years.
Whichever way you look at it, the £125m sale of Amstrad to BSkyB marks the end of an era.
Technically, of course, this a deal that’s been waiting to happen for a long time. These days, Amstrad is essentially a one-revenue-stream company: 75% of its money comes from supplying set-top boxes to Sky. It’s also difficult to see how Amstrad could survive much longer, indeed survived that long, as a company listed on the London stock exchange. It is narrowly held (Sir Alan, in the rather quaint combined role of chairman and chief executive, owns nearly 28% himself) and weakly capitalised, at about £100m pre-deal. In other words, it has had every indication of being a company with a great future behind it.
Exactly the case, in fact. Amstrad’s buccaneering approach to business came into its own in the eighties. Sugar has always demonstrated a talent for spotting a trend, back-engineering other people’s more expensive ideas and presenting them at a market-winning price. He may have started as a market trader with plastic hi-fi tops, but by 1987 he had knocked out all significant competition in the burgeoning UK home computer market, and was sitting on a 25% share of European PC sales.
Although he was never to replicate the scale of this business success, his marketing flair, rude wit (“I at first thought PE Ratios were something you did in the gym”) and sheer drive were soon opening up a new line of business for him: as TV celebrity.
This has been a mixed blessing all round. On the one hand, The Apprentice, Sugar’s personal reality show, has been an indisputable ratings success. It, more than Dragon’s Den or all the other derivative format programmes, has glamourised business as a career, making it appear that the fruits of material success are attractively low-hanging, provided you have the energy, focus and confidence to grasp them – just as he, Sugar, did all those years ago.
On the other hand, yes exactly that. The brash, entrepreneurial skills exemplified in Sugar may be an entertaining take, but they are not typical of business culture generally. Nor have they been particularly exemplary, looking at the long-term track record of Amstrad. Sugar has a highly individual, hectoring, business style which is likely to grate as much as it persuades. He has little time for the City and is largely devoid of the skills which lead to success in a modern corporation. In particular, he hardly seems a role model for those attempting to break through the glass ceiling.
All the same, we’ll miss him when he’s gone. He claims to be staying on at Amstrad, yet other words belie a long-term commitment: “I turn 60 this year and I have had 40 years of hustling in the business, but now I have to start thinking about my team of loyal staff.”
Stuart Smith, Editor