The tricky task of floating easy

After the entrepreneurial wilderness that characterised marketing through much of the nineties, it’s good to see a new star in the ascendant. Step forward Stelios Haji-Ioannou, founder and chairman of the burgeoning Easy Group empire.

The next few weeks will be critical to the future success of the group as Haji-Ioannou places 25 per cent of its principal subsidiary, the low-cost airline easyJet, on the stock exchange. If the flotation is a success it will not only result in a quadrupling of his airfleet, but pave the way for major expansion of his other companies through ready provision of market funding.

One of these subsidiaries, easyRentacar, is already flourishing although set up less than a year ago. To a fleet of 9000 Mercedes A series cars, fruit of an inventive direct deal with the manufacturer, Haji-Ioannou already has ambitious plans for adding a further 20,000 in the next three years. Then there’s easyEverything Internet cafés, which he hopes to float separately, and the more embryonic ventures: easyValue – an e-commerce vehicle that searches for the lowest priced goods; easyMoney, promising low-cost personal finance; and easyHotels. What all these enterprises have in common, apart from the great man himself, is an unslaked thirst for the sort of money that even Haji-Ioannou’s billionaire shipowning father might balk at.

The question is, will Haji-Ioannou’s intensely personal and visionary style of business be compatible with the short-termist, analytical drudgery demanded by City institutions? Because if it is not, there may be some brutal disillusionment ahead for both parties.

On the face of it, the omens do not look particularly good. The annals are littered with the corpses of marketing-literate entrepreneurs who came to blows with the City: Sophie Mirman, Gerald Ratner, Sir Alan Sugar and Bernard Matthews among them. Most of all perhaps, the man with whom Haji-Ioannou is most frequently compared, Sir Richard Branson – who famously took himself private again after getting into a strop with fund managers.

Certainly there are some temperamental parallels to be drawn with these business captains. While, according to colleagues, Haji-Ioannou is far from conforming to the bullying autocrat stereotype, he can be very stubborn and his obsessional interest in detail makes him a poor delegator.

But other aspects of his vision and background point in a very different direction. He is unusual in graduating from a business school, which makes him familiar with the language, if not the culture, of financial institutions. It has also endowed him with a methodical approach to the development of his businesses. He has underscored the core importance of careful, consistent branding (which goes far beyond a knack for self-publicity) and, so far at least, stuck to the last of creating sustainable competitive advantage. His ambition to re-engineer the financial services and hotel businesses may sound a little far-fetched. But at least we all know what he is about: creating value.

His real test, as with so many entrepreneurs, will come when market sentiment turns against him. Only Branson has consistently passed that one.


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