Branson: just another '60s dreamer?
DRESSED in a tattered tweed coat and rumpled sweater, Britain's king of records and tapes was charmingly awkward in the presence of journalists. ``Being successful was something to be slightly embarrassed about 10 years ago. Now it's an accepted and encouraged thing to be,'' Richard Branson says over lunch at London's fashionable Brown's Hotel.
A Beatles generation upstart, Mr. Branson stands out among the starchy circles of London businessmen. He is a leading example of Britain's successful entrepreneurs, and the newest addition to the country's list of 50 richest people.
Branson has been called ``just another '60s dreamer'' and ``the most gifted self-publicist since Barnum and Bailey.'' But he is no longer underestimated by London's financial community as being merely in the ``flair'' business. He's now building an international entertainment and media empire with investments in Europe, the United States, and Asia, but it was not long ago that he was barely staying ahead of his creditors.
``The picture of Virgin is one of success story after success story. But obviously that's not the case at all. Right up until four years ago, the company could have gone either way,'' he says in a classless accent that makes him hard to place in British society. ``It's obviously nice to have survived.''
``Virgin'' is the name identified with Branson's businesses. He is chairman of Virgin Holdings Ltd., with record and music companies that form the largest media and entertainment group in Europe. Book and film companies also carry the name. And there is Virgin Atlantic Airways, which, with its cut-rate fares, competes with British Airways on transatlantic routes to the US.
In a country with few entrepreneurs, Branson is known for backing daring, sometimes wacky, new ideas. From his offices on a houseboat in London's ``Little Venice,'' he masterminds a bewildering variety of unusual business propositions, including hot-air balloon holidays to Egypt's pyramids and India's Taj Mahal and floating shopping centers carrying British goods to American customers at ports along the US East Coast.
In his late 30s with a family that includes two young daughters, Branson projects a fresh image for entrepreneurs in a country where such businessmen are much rarer than in the United States. Two years ago, he was voted the most admired man among British youth after Prince Charles and the Pope, and he has become conscious of himself as a role model. As are many Britons, he is concerned that American-style conspicuous consumption is corrupting successful business people in Britain.
His biggest new business venture aims to capitalize on the deregulation of Britain's television industry. The Virgin group is a founding member of the consortium licensed to launch four new television channels for the country, doubling the number of existing stations and opening up potentially sizable new markets for direct satellite broadcasting. Branson says shareholders in the $1.4 billion venture have put up a ``lot of money'' for quality programming. His company already holds a 16 percent stake in a pan-European superchannel.
Observers say the Virgin group is also positioning itself for entry into national commercial radio in Britain when the government deregulates that industry.
``It's important that entrepreneurs and people who come into great wealth use that wealth constructively and positively and don't flaunt it,'' he counseled, airing a philosophy that complements an amiable temper and informal life style.
Branson began his business career when he dropped out of school to found a magazine and soon afterward began a mail-order record business.
``I was seeking to change the world by editing a magazine as a naive 15-year-old,'' he recalls. ``I soon realized that in order to edit a magazine, I had to sell the advertising, deal with the printers, do the distribution, and actually get the magazine out every month.''
Founded in 1971, Virgin Records had a promising beginning when its first recording contract led to the best-selling instrumental ``Tubular Bells,'' by Mike Oldfield, which has sold 5 million copies. With its cut-rate record stores and popular recording groups, such as Phil Collins, Boy George's Culture Club, the Eurythmics, and Simple Minds, Virgin is now one of Britain's largest companies, with annual 1987 sales of $540 million.
But all is not rosy. Since Branson first sold shares to the public in 1986, the share price of the London-listed company dipped well below its original offering price. One of the biggest challenges Branson now faces is to break into the sizable US market after setting up a new recording company in Los Angeles last year. Virgin is also entering the classical record business and venturing into East Europe with the first-ever contract to sell Western classical recordings to Czechoslovakia.
Branson has also begun to deal with the Soviet Union. ``I will try to make use of the position to try to do a small bit to help break down the barriers,'' says Branson. Asked about his management style, he says he had to learn the art of delegation when he was very young. He also has surrounded himself with boyhood friends, who still run his most profitable operations. ``I'm fortunate that all the key people never left Virgin. The two people who run our record company joined when I was 17 and they were 17, and they still run it.''
He enjoys taking risks and has thrived in the atmosphere of free-enterprise culture promoted by Prime Minister Margaret Thatcher. ``I think there's no question but that Mrs. Thatcher and the Tory administration have created a revolution,'' he says. But, ``I do things which I suspect would appall certain people in [Thatcher's] Conservative Party, and I do other things which they might be quite pleased and proud of me for doing.''
The things that might appall include ownership of the largest gay discoth`eque in London and his dramatic entry into the cheap-condom market last year. Profits from the condom company go to the AIDS prevention efforts of the Virgin Healthcare Foundation.
One key to Branson's success has been his flair for publicity. The most spectacular of his attention-grabbing stunts have been hot-air balloon exploits, especially last summer's record-breaking transatlantic crossing, which came dangerously close to disaster when his balloon scraped the earth in Northern Ireland and slammed into the Irish Sea. He and fellow pilot Per Lindstrand escaped, shaken but unharmed.
This year US and Italian balloonists aim to break their record. But Branson is weighing his risk-taking more carefully now and says he's yet not ready for another flight. ``I'm obviously tempted to join in, but I'm resisting at the moment, having forsworn adventures after the [last] balloon trip.''