by Phil Mason
The idea went against all the conventional wisdom that the elderly were an impoverished and difficult-to-please market. No travel agent would touch the idea. The De Haans did it all themselves. Sidney worked out the maximum likely comfortable journey time to Folkestone, identified the industrial areas of Yorkshire and County Durham, and went personally to sell the holidays in the towns and villages of the North.
By 1957, De Haan was using rail to transport his passengers by persuading British Rail to provide specially chartered trains and use half-forgotten loops of track to spare his elderly clients having to change trains to cross London. Saga became British Rail’s largest passenger customer, a fact BR never advertised.
De Haan launched overseas holidays in the Portuguese Algarve in 1960, one of the first to pioneer foreign holidays. Long-haul trips to the Far East were introduced in 1979 and the first cruise ship started in 1996. When the company was floated on the Stock Exchange in 1978, it was one of the most oversubscribed offerings ever.
The company remains based in Folkestone where it all started.
The Holiday Inn hotel chain was inspired by a Memphis businessman’s depressing family holiday in Washington in 1951. Kemmons Wilson discovered that the normal practice of motels was to charge extra for children. He had five. ‘My six-dollar room became 16.’ This drove him to develop a hotel experience where children could stay for free in their parents’ room.
He asked a draughtsman to prepare plans. As he completed his drawings, he happened to be watching the 1942 Bing Crosby movie Holiday Inn on television. He drew the name on the top of his plans. Wilson liked it and the name stuck.
The first Holiday Inn opened in Memphis in 1952. Within 15 years it had become the largest hotel chain in the world with more than 300,000 rooms across nearly 2,000 almost identical hotels. The chain was sold in 1989 for $2.2 billion.
Kemmons Wilson is considered the father of the modern inn-keeping industry – and it all stemmed from his own miserable holiday.
A direct offshoot of another ingenious hotel trader is mini-golf. It was invented in 1927 by Garnet Carter, not for its sporting allure but to attract passing drivers to stay at his hotel in Lookout Mountain in Tennessee.
He patented the idea when it became clear that it surpassed in popularity all other diversions available to his guests. Within three years, he had franchised the courses to over 3,000 other establishments.
It proved to be an astonishingly popular, although short-lived phenomenon. In 1930, there were over 1,000 courses in New York and Los Angeles alone. It was so popular that the first to be built on Long Island is said to have repaid its construction costs back in its first day’s takings.
However, with the Depression biting, the fad rapidly ebbed away as a self-standing commercial business. It re-emerged in the 1960s, most frequently as a seaside amusement park entertainment.
It would have been Marks and Dewhirst, instead of Marks and Spencer, had Michael Marks won his first choice of partner in 1894.
Marks, a Russian-Polish immigrant who had arrived in Leeds in 1884 as a penniless 25-year-old, became associated with Isaac Dewhirst from the very start of his business career. Dewhirst was the wholesaler from whom Marks bought his goods, which he sold on in the villages around Leeds and then on his street stall in Kirkgate market in the city’s commercial centre.
After 10 years, Marks owned a chain of bazaars across Yorkshire and Lancashire. He sought a partner, and his obvious first choice was his trusted supplier, Dewhirst. But Dewhirst turned him down. He recommended instead his own cashier, one Tom Spencer, who was persuaded to buy a £300 half share in the company that became M&S.
By 1900, they had 36 Marks and Spencer branches and never looked back. Isaac Dewhirst’s name, by contrast, was lost to history. He remains significant, even if not a household name, in the history of M&S. It was he who loaned Marks his first £5 – to buy stock from him to start up the first stall.
The toy car company, Matchbox, which pioneered the pocket-sized miniature car market just after the Second World War, began with a complaint by the daughter of model designer, Jack Odell. In 1950, she told her father that her school had ruled that no one was allowed to have any toy with them that could not fit into a matchbox. Odell then made her a miniature road roller to take to school to show her friends.
That started a flow of models that became the mainstay of boys’ toys in the 1950s and 1960s. They continued to be packaged in cartons roughly the size of matchboxes. By 1966, Matchbox cars were the world’s biggest-selling brand of die-cast model cars, selling more than 100 million cars a year in over 100 countries with 14 factories in and around London. At their peak, Matchbox were producing a quarter of a million models a week, a rate of more than 1,000 a minute.
A milkshake salesman’s curiosity led to a global business phenomenon known as McDonald’s. In 1954, Ray Kroc had been asked to supply eight milkshake mixers to a small hamburger restaurant in San Bernardino, California, run by two brothers, Dick and Maurice (‘Mac’) McDonald. As each machine could mix five shakes at a time, he could not understand why the brothers wanted eight of them.
When he visited the restaurant, he saw why. The McDonalds ran an efficient – and very popular – style of fast food. Their ‘Speedee Service’ concept was built around having a limited menu, no waiter service, and paper cups with plastic utensils to speed the clean up after a customer had left.
The brothers, who had opened their first outlet in 1940, were quite happy with the business as it was. But Kroc had a vision. Within a year, he had persuaded them to grant him exclusive rights to franchise the brand. He opened his own McDonald’s in April 1955, and marketed the brand feverishly. Six years later, the McDonalds sold him the worldwide rights to the name for just $2.7 million. That same year, he grossed $6 million. By the time he died in 1984, the McDonald’s corporation was making $8 billion annually.
By 1967, America’s 1,000th McDonald’s had opened, and there were branches in Canada and Puerto Rico. There are now around 25,000 McDonald’s throughout the world. One estimate puts the number of daily customers at 54 million – around 1 per cent of the entire world’s population.
The credit card was born as a result of a forgotten wallet at a restaurant in New York in 1949. Businessman Francis McNamara had taken a group of clients to the fashionable Major’s Cabin Grill in Manhattan. When it came time to pay, he discovered he had come out without his wallet. He had to ring his wife who dashed over with some cash. McNamara vowed never to find himself in that position again.
He and partner Ralph Schneider invented Diners Club, the world’s first credit card. In February 1950, he returned to Major’s Cabin Grill and paid for his dinner by card. According to Diners Club, this event is known in the credit card industry as the First Supper.
In the first year, 20,000 people signed up for the card, which was accepted in five major cities of the US by 400 restaurants, 30 hotels and 200 car rental outlets. By 1955, Diners Club had expanded tenfold with 200,000 customers. Until 1961, the card used was cardboard, not plastic. It was to be 1958 before another rival – American Express – came on the scene.
Credit cards reached Britain in 1963, when American Express became available. Britain’s own first card, Barclaycard, was launched in 1966. It was the first true credit card. Both Diners Club and American Express were technically charge cards, with the full amount owed having to be paid back every month.
The door-to-door Avon Cosmetics concept was developed by accident because the salesman who founded the company was initially trying to sell books, and was failing.
Twenty-eight-year-old David McConnell – the first ‘Avon Lady’ – was an encyclopaedia salesman in upstate New York who decided, when sales were trailing off, to offer a small free phial of perfume to anyone allowing him to pitch his products. The scents seemed more popular than the books, so he switched in 1886 and launched his door-to-door ‘Avon Calling’ approach. He had, unwittingly, tapped a potent market of rural women a
t a time when getting to larger shops was difficult.
For the first year, he was his own representative. He hired the first female Avon Lady in 1887. By the time of his death in 1937, there were more than 30,000 of them on door-to-door rounds across America. (He adopted the Avon brand as he imagined the area around Suffern, in the countryside just north of New York City where he set up his perfume factory, as looking like Stratford-upon-Avon in Britain.)
Avon arrived in Britain in 1959 and revolutionised home selling. It remains popular, with some 160,000 reps in the UK and nearly five million across the world. The company claims to be the world’s biggest direct-sales marketer of cosmetics and beauty products. And all because a man discovered the foot-slogging hard way that his clients really didn’t take to books.
B&Q, the do-it-yourself giant, was created in 1969 by Richard Block and David Quayle. It was the first large store specifically aimed at the DIY market in Britain. Block had got the idea from seeing a hypermarket selling domestic tools while working in Belgium. Quayle helped with the market research and the pair set up their shop in a former furniture warehouse in Southampton.
The now famous and recognisable brand name nearly did not happen. The business was nearly called ‘Always’. They fixed on B&Q when suppliers started to abbreviate Block and Quayle on sales invoices.
Block left the company in 1976, and Quayle sold the business to Woolworth’s four years later.
The curious British product, Worcestershire Sauce, has an equally curious origin, developed by two Worcester chemists – John Lea and William Perrins – in 1835 at the request of a local dignitary, Lord Marcus Sandys, who sought to recreate a fish sauce he had enjoyed when Governor of Bengal. They tried, using the ingredients still used today of vinegar, molasses, anchovies, onions and garlic, but the resulting concoction – perhaps to no one’s surprise – was quite obnoxious. It was discarded in a cellar where it stayed forgotten and undisturbed for two years.
When the mixture was rediscovered, it was about to be thrown away when one of the chemists decided to taste it again. Astonishingly, it appeared to have matured in the time like a good wine. It now had a strong aroma and unique taste. Lea and Perrins bought production rights from Lord Sandys and began marketing the original Worcestershire Sauce in 1837. Two years later, a New York importer introduced it into America, and it was so successful that within no time a factory was set up producing the sauce there too.
It has a worldwide cult following. The recipe has remained virtually unchanged for 165 years. In 2008, Worcestershire Sauce was voted in a poll run by a satellite TV food channel as Britain’s greatest contribution to world cuisine, beating cheddar cheese, Yorkshire pudding and clotted cream.
The original inspiration for ‘Doc Martens’ boots comes from a skiing accident and the needs of elderly German ladies.
The original Dr Klaus Maertens, an orthopaedic surgeon from Munich, injured himself on the ski slopes in the Bavarian Alps in 1945 and damaged his foot. Finding regular footwear uncomfortable as it healed, he, along with a former associate from his student days, engineer Herbert Funck, developed the unique air-cushioned sole in 1947. Their principle ingredient was rubber discarded from post-war scrap Luftwaffe aircraft tyres.
They carried the brand name Dr Maertens and were initially designed for the elderly with walking problems. British manufacturers were offered licences to produce them in the UK in the late 1950s, but none saw a commercial prospect – except one: a boot manufacturer, Griggs & Co, who made the standard issue boots for the British Army but who were looking for a new product. They anglicised the name to ‘Dr Martens’ and produced their first line in 1960. They reached cult status amongst football hooligans and skinheads by the early 1970s.
Puma, the sports company famous for its soccer boots, owes its existence to a misunderstanding between Adolf and Rudolf Dassler, the two brothers who founded a German footwear empire in 1924. Their sibling arguments ended up producing not one but two world-famous brands.
The pair had worked harmoniously until the Second World War producing high-quality shoes, and branching into sports equipment for the 1936 Berlin Olympics. But tensions between them grew as both reacted to the Nazi regime in different ways, the older Rudi being closer to it having been a First World War veteran. The conflict reached breaking point in a bomb shelter during an Allied air raid in 1943 when Adolf and his wife climbed in to find Rudi and his wife already there. According to company legend, Adolf’s remark ‘Here are the bloody bastards again’, which he meant to refer to the Allied bombers, was instead taken by Rudi to be an insult against his family.
The dispute was never healed. In 1948, the brothers split, Adolf (‘Adi’) Dassler creating Adidas in the following year. Rudi later decided to set up a rival, Puma. They both established factories in the same small Bavarian town of Herzogenaurach, 15 miles north of Nuremburg.
Adidas is now the second-largest sportswear manufacturer in the world. Puma is the second-largest in Europe – after Adidas.
A single, ill-judged speech destroyed the entire business empire of one of Britain’s most successful entrepreneurs. Gerald Ratner’s infamous joke to 6,000 businessmen at the annual meeting of the Institute of Directors in April 1991 that his jewellery company’s products were ‘total crap’ and that he sold a pair of gold earrings for under £1, which was cheaper than a prawn sandwich ‘but probably won’t last as long’, caused the fortunes of his company to collapse after a public outcry at the mocking insinuation of his customers’ poor taste.
The share price of Ratners lost 90 per cent of its value by the end of the year and in early 1992 Ratner stepped down as company chairman. He had seen the value of his business fall from £460 million to just £54 million, and his own stake from £1.5 million to £174,000. The company’s balance sheet went from a £112 million profit in 1990 to a £122 million loss a year later. According to The Times, ‘Never in corporate history have a few foolish words done so much damage.’ By 1994, Ratner’s name itself disappeared as the holding company dropped the brand because of the continuing marketing difficulties.
In 2003, Ratner made a comeback with an internet-based jewellery business. He was refused permission to use his own name by his former company, which still held the trademark. And instead of the 27,000 employees he had once overseen, his new enterprise boasted a smaller workforce – a staff of just six.
Regarded as the most popular board game of the 20th century, Monopoly, invented during the Great Depression by Charles Darrow, an out-of-work Philadelphian, was turned down by Parker Brothers because, in their assessment, it had ‘52 fundamental playing errors’.
These included the game being too long, the rules being too complicated and there being no clear goal for the players. Despite the force of this rejection, Darrow persevered and began selling handmade versions. Two years later, in 1935, Parker bought out the rights. They sold 20,000 sets in the first year.
Recent research suggests that Darrow was not the original inventor. He took a format that seems based on an earlier game, The Landlord’s Game, patented by a Maryland social campaigner, Lizzie Magie, in 1903 and 1924, to demonstrate the evils of land monopolisation. To be safe from possible legal difficulties, Parker quietly bought out Magie’s patents for $500, and no royalties.
The other great gaming product of the Depression years, Scrabble, had a similarly inauspicious start and eventually triumphed only through a single stroke of luck.
Architect Alfred Butts, from upstate New York, created the game in 1931 while out of work. He produced the handmade games in his garage and sold them to neighbours. For over 20 years it remained small-scale and unnoticed. It was not even called Scrabble. After toying with Criss-Cross and Lexico, he called it simply, if bizarrely, It.
Butts managed to interest one of his friends, James Brunot, to buy the rights to the game in 1948. He renamed it Scrabble from the ‘digging’ required to select the letters. Two years later he had only sold 8,500 sets – at the rate of a couple
of dozen a week – and was on the brink of bankruptcy.
Fortunes changed in a flash when Jack Strauss, chairman of the New York department store Macy’s, discovered and played the game while on his annual holiday in 1952. He decided to stock it. Sales skyrocketed to 6,000 sets a week and the 35 workers producing the game could not keep up with demand.
Brunot sold his rights, ensuring that Butts too secured a royalty – 5 cents per set – and while he became a millionaire, Butts received just $50,000 a year at the peak of sales in the 1950s and 1960s. It lasted only until 1974 when his copyright expired. Butts died in 1993.
Experts marvel at one aspect of the game. Butts got all the elements absolutely right first time. The points awarded for each letter have never been changed. Butts decided on their values by counting the number of times each was used on a single front page of the New York Times.
A toy salesman who decided to get an early start with his appointments by driving ahead instead of stopping at the hotel he had originally planned, stumbled on the game that he would reinvent and sell to the world as Bingo.
In December 1929, Edwin Lowe, a New Yorker on a selling trip down south, was driving from Atlanta in Georgia to Jacksonville in northern Florida. He passed a roadside carnival and stopped to see why a large crowd had gathered round a table. They were playing something called ‘Beano’ which offered small prizes for completing lines on a numbered card on sale from the pitchman, who called out the numbers.