by Sugar, Alan
I decided it was time for a second trip to Japan to research the latest trends. Once again, I met Harry, who was still supplying us with lots of stuff. He’d heard we were buying cassette decks through Waco Trading and asked why I wasn’t putting the business his way. He suggested he could find me other manufacturers.
The fact of the matter was that I had a better payment arrangement with Waco. It’s important to understand the concept of a letter of credit (LC), effectively a bond issued by a bank that guarantees payment to a supplier. In banking terms, it’s treated as part of your banking facilities. As far as the bank is concerned, the minute you open an LC, for whatever value, they consider that they’ve lent you the money, even though the goods haven’t been shipped. The last thing the bank wants is to be lumbered with a load of electrical goods or components, so it puts a limit on the LC facility they will give at any one time.
While my business was doing well, the bank was relatively supportive, but my LC facility was always peaking out and holding me back from doing bigger business. Waco knew this and agreed to ship me goods on ‘open account’, which means you sign a draft, effectively a post-dated cheque without any obligation on the part of the bank. Waco was extending me credit, but Harry was a small-time operator and could not finance a large volume of business.
Due to this open account financing, I needed to deal through Waco to buy goods from Orion. Ronnie Colson advised me that once again it was time to pay the Emperor his dues. He and I would have to get a train to Fukuoka, out in the Japanese countryside, to meet Mr Otake. I asked why, but on reflection it was a stupid question – I should have known the Emperor would never come to see me.
We were to meet at a spa resort where the speciality was the hot springs bath. My Western clothes were whisked away by the staff and I was issued with a kimono. Meanwhile, Otake waddled around, dishing out instructions on the day’s agenda. At one point, we had to strip off and jump into a giant, boiling spa.
This crazy culture was getting on my nerves. I would have been quite happy sitting in the coffee shop at the Okura Hotel discussing business over a hamburger. Instead, here I was in a hot tub with this little chubby chap and Ronnie. We weren’t allowed to discuss business in the hot tub – Otake’s rule.
I now know what a lobster must feel like – the water was red-hot. The next torture was to go into a freezing-cold shower, then a couple of sumo-type wrestlers started whacking me with a loofah-type implement. I looked at Ronnie who was trying to get into the spirit of things, but clearly didn’t want to be doing this either. He was under Otake’s spell – he knew that to do business with this nutter, you had to go along with his mad ways.
Finally, we ended up in a dining room. The table was laid out with all this Japanese tutt. Otake looked at me. ‘What is wrong? Food no good? This is best Japanese food.’ I told him that I was allergic to shellfish.
He rattled away in Japanese. Ronnie turned to me. ‘Would you like a sandwich or something like that?’
‘Absolutely,’ I replied. And then, speaking very quickly so Otake couldn’t understand what I was saying, added, As long as this nutcase here doesn’t get the hump.’
After dinner, Otake showed me a range of car radio-cassettes, an area I wasn’t active in but which was an up-and-coming market. Cars in those days were not fitted with radios as standard and certainly not with radio-cassettes. Otake told me he’d opened a factory in Korea and it was possible for car radio-cassettes to be imported into Europe duty-free because of some special arrangement between European governments and Korea, which was considered to be a developing nation. That’s a joke in itself – little did we all know back then that they would become giants in all industries.
Normally we paid 14 per cent duty on imports, but there was a window of opportunity in the early part of the year, during which this duty-free quota was taken up quickly. The art was to import the products to arrive in January, within the quota period.
I ordered 10,000 of these car radio-cassettes. I don’t know what possessed me – it was just a gut feeling. I also placed another 15,000 order for cassette decks. Otake was quite intimidating and in a way I was trying to impress him with these large orders.
To round the whole episode off, my bedroom had no bed and I had to sleep on a bloody mat on the floor. If anything, I needed another hot tub experience the next day, as it was the worst night’s sleep you could possibly imagine. I was full of aches and pains.
Back in Tokyo, I asked Harry to host me around Akihabara. We spent the whole day there and I examined every single product on display, taking as many brochures as I could, as well as photographs. The shopkeepers must have thought I was nuts, taking close-ups of knobs and switches.
I was due to fly home on the Saturday. The British Airways 747 flight to London always left at ten o’clock at night, to arrive at a sensible hour. Before that, Ronnie Colson invited me for lunch to tidy up some of the business we’d done that week. I knew Ronnie felt I was a business commitment he was obliged to see – he was always saying he had better places to be and more interesting things to do. Throughout lunch, he was name-dropping. ‘Then so and so said this and that to me when I was in blah, blah, blah . . .’ It was really getting on my wick. He’d done this to me before, boasting, for instance, that at the opening ceremony of the Tokyo Olympics, he had the honour of riding with the Emperor’s son, with whom he was educated. On that occasion, it got to the stage where I was starting to take the piss out of him, asking him whether he’d met the Queen of England and things like that.
After lunch, we met a friend of his at the Hilton Hotel, an American fellow who was trying to sell a new type of Instamatic camera. Kodak had just brought out their rather novel Flip Flash camera, where you popped a small film cartridge into the back. The guy told me that Kodak was selling millions of them in America and that he had tooled up a replica. He asked if I wanted to sell them in Britain and gave me a sample to keep.
There are times in life when you should keep your nose out of things you don’t understand, and this was one of them. I wasn’t interested. This was not my business – I had no contacts in the photographic industry and it was a low-priced item which meant low margins. Why would anyone buy an Amstrad replica when you could buy the Kodak for a couple of quid more? The Kodak business model was based upon selling a low-priced camera with a view to making the real money on the film and processing – it was the classic Gillette blade syndrome.
After the meeting, Ronnie couldn’t get rid of me quick enough. He obviously had better places to be, probably meeting up with his beautiful Argentinian girlfriend. He got me a taxi to take me to the hotel – that was it, goodbye.
I had a few hours to kill and sat in the lobby of the hotel, worrying that perhaps I’d bitten off more than I could chew with the big order I’d placed. I did some long-hand calculations on cash flow and realised I’d created a bit of a problem for myself. I wondered how I was going to finance this stuff, in particular the car radio-cassettes.
Then I went to the hotel’s shopping arcade and bought Ann a row of pearls. The Japanese are known for the best pearls in the world. I also popped into the photographic shop to see if I could buy a film for the little camera I’d received as a gift. Outside the shop was a big, black minder-type guy, quite a strange sight in Japan, and three Japanese security men. I couldn’t understand why until I went inside and there, standing at the counter talking to the salesman, was Sammy Davis Junior. I couldn’t believe my eyes. He looked at me and said, ‘Hello.’ I froze, and then returned his hello.
He was discussing a high-tech Nikon camera with the shop staff and very politely told me, ‘You go ahead. I’m going to be a while here, so just ask the man for what you want.’ Then he noticed my little camera. ‘What have you got there?’ he asked.
I said this was a newfangled gadget which took a special film, and we engaged in conversation. He was very interested in the camera. The photographic shop sold me one of the cartridges and I popped it in. I
couldn’t resist asking Sammy if he’d mind having a picture taken with me. Otherwise, who’d have believed that I’d bumped into Sammy Davis Junior? He was really polite. He stuck his arm round my shoulder and the guy behind the counter took the picture. As I always kept my passport with me (after the last experience), I whipped it out and asked Sammy to sign his name in it.
I was laughing up my sleeve. Ronnie Colson, poseur extraordinaire, had missed Sammy Davis Junior. Unbelievable! He would be plutzing no end. He would have milked every minute of it, but he’d dumped me at the hotel and missed the opportunity to meet one of the world’s greatest celebrities.
When I got back to England, I rushed the film to a processor and asked them to print ten copies of the picture of me and Sammy Davis Junior. I express airmailed one to Ronnie with a letter saying that it was very nice of him to host me and that I happened to have bumped into Sammy Davis Junior and we’d had a great afternoon. I wrote, ‘Sammy was intrigued by the camera your friend gave me, so much so, he invited me up to his suite and I spent a couple of hours there, which really helped kill the time before I had to go to the airport. Shame you missed it, Ron. Never mind.’
I knew this porky would wind him up no end, and I was right. He called me a week later and put on an American accent, making out he was Sammy Davis, just to check if it was true. I wound him up so much – it was great. ‘Such a shame you had to leave, Ronnie. You’d have loved it up there in Sammy’s suite – you know, the Imperial Suite on the top floor.’
7
‘Young Man, You Have a Good Business’
Should I Take the Money and Run?
1978–9
As the company grew, so did the number of staff. The new people I took on experienced the rapid growth and success of Amstrad, and they shared in the excitement. This applied to all the staff, from those who sat on the production line to those in managerial positions. I wasn’t one of those bosses who appointed a manager and left them to deal with the lower level’ people. I was heavily involved with everyone. In fact, it’s fair to say that I was chief cook and bottle-washer.
Now that I reflect on it, I can remember seeing the confusion on the faces of people like Dave Smith, the production manager, when he saw me talking directly to his workers. He’d give me a look as if to say, ‘What are you doing? I’m supposed to do that.’ It wasn’t always easy for the managers to get to grips with my style as a boss, but in the end they understood it and, more to the point, understood me. I’ve always believed that I shouldn’t ask anyone to do what I can’t do myself. Many’s the time when we started making a new model that I would sit on the production line and assemble the first units. This exercise helped me when I was envisaging future products; it gave me an idea of the complexity of the production process we were about to embark upon.
In truth, I am not happy unless I know every detail of what goes on – that means assembly, material costs and supply chain, as well as the technical workings. The commercial side of sales and marketing just comes naturally to me. In the future, Rupert Murdoch would say, ‘This fellow Sugar knows where every nut and bolt in his company is,’ a description I was happy with!
My style of management meant that the staff felt I was speaking to them on their level and in an informed manner. I really believed I’d created a family culture at Amstrad. For this reason, I was hurt to discover that a member of staff had betrayed my trust.
One day, our accountant at Ridley Road was off sick, so Dave Smith went into his office to pick up some uncollected paypackets for the people who hadn’t been in the previous Friday. In a drawer, Dave noticed paypackets for people who’d left the company a while ago and had been paid in full. He sussed out that something was wrong and brought it to my attention. I asked my accountancy firm to investigate the PAYE and they discovered that our accountant had been embezzling from the company for several months. I called in the police and he was well and truly nicked. This was the first time I had encountered someone stealing from me.
I recruited a new accountant, also called David Smith. He was a tall, well-groomed young man who looked a bit out of place in the rough Ridley Road surroundings. If I recall correctly, he’d been made redundant and took this position as a stop-gap. He was a very nice fellow, quiet and unassuming, which is why he was shaken when two Scottish labourers we employed phoned him up and told him that they were leaving that Friday and if they didn’t get their money, they were going to ‘come down and punch his fucking head in’.
They worked at our overflow factory in Shacklewell Lane, just a few hundred yards from our main premises. I’d acquired this extra factory as we were busting at the seams at Ridley Road and needed more space for bulky items such as loudspeakers.
From my regular visits to Shacklewell Lane, I knew who these two were, but didn’t realise they were trouble. I was annoyed to find out that not only had these two rogues threatened David, they were also causing havoc in the factory – they had no regard for timekeeping and came and went when they fancied. When I told the other Dave Smith I was going up there to sort them out, he warned me that they were a pair of big bruiser lunatics and that everybody was petrified of them. He advised me to take care. With that in mind, I grabbed a crowbar and stuck it in my car before I went up to Shacklewell Lane.
It was about midday. When I asked the factory manager, Colin Baker, where these two were, he told me they were in the pub.
‘In the pub?’ I asked. ‘Why would they be in there? They’re supposed to be working here.’
He shrugged his shoulders, as if to say, ‘I can’t control them – they’re a law unto themselves.’
I walked down to the pub on the corner and, like the Milky Bar Kid, pushed the saloon doors open. I saw these two yobs sitting with a group of people. With crowbar in hand, I pointed at them. ‘You two, get out here.’
Like two little lambs, they put down their drinks and came out. I screamed at them to get their stuff from the factory and get the hell out. I threw their paypackets at them. By the time we were back outside the factory, they were over their shock and getting angry. One of them said, ‘You’ve embarrassed us in front of our drinking pals – now put that doon.’ He was referring to the crowbar I was nervously tapping against the side of my leg.
I said, ‘I’m not stupid enough to put this down. If either of you come anywhere near me, I’ll wrap it round your head.’
This stand-off at the OK Shacklewell Lane Corral lasted about five minutes. One of them picked up an empty milk bottle as if he were going to throw it at me – instead, he threw it to the ground and it smashed. As they edged towards me, I lifted the crowbar again, warning them, ‘Come one step further and I promise you, this will be landing on your head.’ By now, a crowd had gathered. After a few more verbal exchanges, they finally walked off, muttering that they would get me in the end.
That was the last time we saw those two idiots. Why am I telling this story? Well, it does have a funny ending. I was going on holiday with Ann and the kids the next day and when I got out of bed the following morning, my right leg was stiff. I couldn’t understand why, but when I looked down at my thigh, it was black and blue from all my nervous tapping of the crowbar. Ann was killing herself laughing when I showed her my bruising and told her the story behind it.
David Smith, the accountant, left shortly afterwards, and I recruited a new fellow, Jim Rice, to replace him. Jim was a qualified accountant, a nice-natured, shortish chap with blond, curly hair. To cope with the company’s growth, he expanded the accounts department and introduced some new systems.
Also important in the life of Amstrad was Dickie Mould, who joined around this time. Dickie had watched from afar our meteoric rise from minnow to major player in the hi-fi market. He introduced himself as someone who had his own business manufacturing loudspeakers. In reality, his business was going down the pan, but, in hindsight, knowing Dickie’s character, I can see how it would have been impossible for him to admit it.
He explained that he wa
s well connected with all the hi-fi retailers and that while I had made inroads into the larger companies, he would be able to sell to all the smaller retailers, some of whom advertised in the hi-fi magazines and had two or more branches. He talked a good game, so I employed him as sales manager. To be fair, he did have connections and he did generate some sales with the smaller retailers.
Trouble was, I was always trying to keep him at a distance. He was continuously trying to edge his way into the upper echelons of power. It was starting to feel like shades of Chenchen and wife. The best way to describe Dickie is to liken him to the character Boycie in Only Fools and Horses. He had the same sneering air of superiority and even looked a bit like Boycie, with his Brylcreemed, slicked-back hair and small, spivvy moustache. He was taller than me and always wore a three-piece suit with a waistcoat.
I had never come across someone so protective of their status. Dickie would say things such as, ‘Of course, Alan, you and I fully understand everything that’s going on, but the others [referring to the other members of staff] don’t.’ He saw the other staff as plebs and himself as some superior being. Think about Boycie and you’ll get the gist. He continually spoke about his big house in Rochford and how he had his own snooker table. He’d go on about how he too was a private pilot and once owned an Auster plane.
Dickie’s mannerisms gave rise to a lot of jibing within the company. He would keep his cigarettes in a specially made pocket inside his jacket and would take out the packet, open it, whip out a cigarette and return the packet to his pocket in one swift movement. Never did he think of offering one to others.