by Sugar, Alan
What made people laugh most was the chain that hung inside his jacket which was connected to a wallet containing his credit cards. I asked him once why he had the chain. He said that it was a precaution, in case his wallet fell out of his jacket. In those days, credit cards weren’t as widespread as they are now. Nevertheless, Dickie had the lot: Diners Club, American Express, MasterCard, Barclaycard – you name it, he had it. And, of course, he was a ‘premier member’ of each one – what else would you expect from Boycie? Despite this show of wealth, he was a bit tight as things go, and was always rather shy in coming forward to buy a round of drinks. Once when he did, I recall jibing him, saying, ‘Blimey, Halley’s Comet must be due this week!’
He also had a funny way of speaking. Instead of agreeing with an ‘okay’, his favourite expression was ‘Righto, ducks.’ I never did understand what it meant, but I’m told it’s some East End expression. It was something you’d always hear when people were mimicking Dickie. Some called him Tricky Dickie or his full title, Tricky Dickie Righto Ducks.
When we visited our customers, I would exchange pleasantries with most of the bosses on first-name terms. However, in those days, things were still rather formal and you would not expect a member of staff lower down the chain to address Comet’s Gerry Mason or Derek Smith of G. W. Smith by their first names. When I took Dickie along to meetings, it would wind me up no end to hear him calling these people by their first names, as if they were his best mates. You could see from the expression on their faces that it wound them up too.
Dickie had to be brought down to earth a few times during his first six months of employment, sometimes by my deliberate put-downs in front of the other staff – they were just as valuable to me as he was, if not more so, and they were clearly getting the hump over Dickie walking around as the big I Am. But eventually the penny did drop with Amstrad’s own little Boycie and he tweaked up his people skills and calmed the situation down within the first year.
*
By the mid-seventies, we were flat out trying to produce amplifiers. The prospect of expanding our production line was daunting – it was very labour-intensive, very technical and a giant headache in the overall scheme of things.
I took stock of my business model. It was to design products (aesthetically and technically) that were needed for the marketplace – and market them. However, in the middle of all of this was the nightmare of assembly and manufacture, which I viewed as an occupational hazard. If I could subcontract this element of the business out, we’d be left with doing what we were best at – designing, controlling the cost of the bill of material and brilliant marketing. In those days, we were still assembling our PCBs manually. This entailed placing the components into the boards and hand-soldering them. This was only practicable if your production runs were low. Large-volume manufacturing used auto-insertion machines which mechanically picked and placed components onto the PCB and then processed the board through a flow-soldering machine. I was not prepared to move in that direction. To me, expanding the business by investing in mechanisation was a no-win situation.
Stan Randall pointed out to me that the company Fidelity, run by the great industry icon Jack Dickman and his three sons, made large volumes of music centres by totally sub-contracting out their PCB assembly, which just left them with the job of final assembly. This rang my bells. I got Stan to contact Fidelity’s sub-contractor, L & N Radio in Chatham, Kent, who specialised in electronic assembly. Using them would result in a win-win situation. They’d be promised orders from me, they’d have no headaches about where their business was coming from and they wouldn’t need to procure materials, as we would free-issue them the parts. All they’d need to do was concentrate on what they were best at – assembly and quality control – and deliver us finished modules ready for final assembly and testing. If I could negotiate a good assembly price for every module, I would fix my costs by adding the bill of material to their labour charge.
This was to be the key to Amstrad’s future. We were free to concentrate solely on brilliant design, speed to market and amazing bill of material cost control, rounded off with expert marketing and sales.
We went ahead with this arrangement, which also assisted us with component storage, as bulky items were delivered direct to L & N. Even so, we had run out of space at Ridley Road and by 1977 the subject of expansion was rearing its head again.
When I host seminars and Q&A sessions for businesspeople and students, a question that comes up time and time again is ‘When do you take your next step for expansion?’ Of course, I can only speak from my own experience. I tell my audience that I was always very cautious – it took wild horses to make us move from one premises to another.
We had been bursting at the seams at St John’s Street and again at Great Sutton Street and had moved both times out of sheer necessity. Once again, we were in the same situation – there was literally no more capacity at Ridley Road, even with our overflow factory at Shacklewell Lane.
When it was time to leave these two premises, I learned my next hard lesson: if you’ve signed a lease, you’re responsible for paying the rent, even if you don’t need the premises any more. I’m sure I must have been advised of this when I signed, but I guess it’s something I brushed aside at the time. Now I found myself in a position where I had to pay the landlords a surrender fee on both premises, something I did not like at all.
With that in mind, I took the bold move of deciding that I would buy our next premises outright. I located a massive building with over 40,000 sq ft of factory space in Garman Road, Tottenham, no more than 500 yards from Tottenham Hotspur Football Club. I bought the place for £300,000 and we moved our whole operation there. Reluctantly, I settled with the landlords on Ridley Road and Shacklewell Lane.
When we finally moved, in September 1977, a look of worry came over my father’s face again. By now he was seventy and not doing much – going to the bank, dealing with the post, that sort of stuff. But he still hadn’t got the plot that I was making bundles of money. He looked at this giant building in amazement. ‘What are you going to do with all this?’
‘I’m going to start a ballroom dancing business, Dad. What do you think I’m going to do with it?’
‘But how can you pay for it all?’
By now I couldn’t be bothered explaining it to him, so I just said that we needed to expand. I added, ‘Don’t worry, Dad, I’ll find you a nice little office here.’
‘Office? Me? An office? I don’t need an office.’
‘Well, you need somewhere to do your post, you need somewhere to keep your balls of string and your brown paper, so I’ll find you a little office.’
He walked off mumbling, ‘Office? Why would I need an office?’
I called out after him, ‘And just to make you happy, there’ll be no heating in there,’ which made Dave Smith and a few of the others laugh.
Even then, my dad didn’t get the joke. ‘Heat? I don’t need heat. I don’t like it too hot. It’s hot in here already. How do you heat this place?’
We all shook our heads and turned away.
This new factory enabled us to produce large volumes of loudspeakers – very bulky, but also very lucrative.
One of the things about the electronics industry is that innovation is very much a matter of fashion and not just technical change. Having kept an eye on trends in the UK and Japan, I knew it was time to give my products a facelift and design a new range of brushed-aluminium-fronted products to follow the Japanese trend. I named the range the ‘executive series’. I took note of reviewers’ comments on the Japanese products and enhanced my models accordingly. We made a new range of amplifiers, tuners and tuner-amplifiers fronted by aluminium extrusions. Orion produced a cassette deck to complement the range – we changed its design from the old horizontal flatbed style to what became known as the front-loading cassette deck.
Imagine a separate amplifier, tuner and cassette deck all stacked on top of each other, all with gleaming, b
rushed-aluminium fronts, beautiful knobs and switches, lots of lights and meters – the ultimate mug’s eyeful. It had a real high-quality technical look about it, and we proudly displayed the British flag on our packaging and marketing (with the exception of the Orion cassette deck, of course). We had beaten the Japanese at their own game because our pricing was far below theirs.
At that time, the effects of free circulation in the European Community had not really kicked in. In France, Germany, Italy and Spain, the importation of tuners from the Far East was restricted. Not only would importers have to pay import duty, but thanks to protectionist measures from French and German giants such as Thomson, Philips, Telefunken and Grundig, there were quota restrictions. This played into my hands. The fashion was a stack of hi-fi equipment and since the Japanese were restricted to importing small quantities of tuners, this in turn restricted their sales of complete stacks. The same import restriction did not apply to tuners made in Britain and with this in mind I looked towards the export market. The likes of Leak and Armstrong were slow to react to the change in fashion. We really were ahead of the game.
At the Sonex exhibition, held annually at a hotel at Heathrow, a good-looking man with a bushy moustache walked into our suite. His name was Pierre Sebaoun. Pierre was the archetypal charming Frenchman, a real schmoozer. He’d seen our adverts in the hi-fi magazines and introduced himself as the managing director of BSR France. BSR was one of the largest manufacturers of record decks in England. Pierre, as it transpired, was employed by BSR in France to sell their products to French manufacturers such as Thomson, Alcatel and Radiola. But he also had his own business on the side – Cogel SA – where he dabbled in importing products which he’d sell to the French retailers with whom he’d built relationships in his capacity at BSR.
Pierre was accompanied by a very attractive lady, Marion Vannier, who ran the Cogel business for him. Pierre, Marion and I struck up a very good relationship at that first meeting and I agreed to appoint him as the representative for Amstrad in France. This was later to flourish into a massive business.
Pierre was a bit of a playboy. I guess his behaviour was typical of French society where, allegedly, it is accepted that a man has his family but also a lover. In fact, it transpired that Pierre and Marion were lovers, and there would be times in the future that I would become complicit in this intriguing web of romance.
My first order from France via Pierre Sebaoun came a few weeks later. He called me to say that he’d found a financial company who from time to time made special offers to their clients. He had persuaded their boss, Mr Shuarki, to offer a complete hi-fi system made by us. This was exciting – it would be the first single order of over £100,000 I’d ever received. However, I didn’t know the company we were going to supply, so I insisted they open a letter of credit in our favour.
Mr Shuarki wanted to visit our factory, so Pierre and I hosted him around the plant. Pierre also promised Mr Shuarki a big night out in town, something I wasn’t accustomed to. Hospitality wasn’t my greatest forté – quite frankly, I think it’s boring talking a load of nonsense to customers who are just out for a good jolly.
We spent a tedious night at the White Elephant on the River, which was an excellent restaurant and had been a stamping ground for Ann and me and our friends. Pierre spent much of the time talking in French to Shuarki while I sat there bored. The only good thing was that they confirmed the order and that they’d be paying by LC. It was my first big order in the export business.
*
I’m sad to say that holidays were something I saw as a necessity for the family rather than something I looked forward to myself. Pitiful as it sounds, that was the truth. Some of the great holidays we had were down to Gerry Eriera, the husband of Ann’s cousin Norma. Gerry was a partner in a fashion firm. We became very friendly with Gerry and Norma and would spend many holidays together. Since I could never be bothered working out itineraries and stuff like that, I left it all to Gerry. He would always come up with something special. Gerry and Norma were from the same kind of stock as me – ordinary, down-to-earth people from Stamford Hill and Clapton – and we spoke the same language.
The first trip organised by Gerry was Ann’s and my first experience of America. We stayed for two weeks in a resort in the Catskill Mountains in the state of New York. I was dead ill with a virus for the first four days and only saw the inside of my hotel room. When I recovered, it was a real eye-opener to see how these Yanks carried on. Maybe I met a bad sample of Americans, but these people were so insincere and full of shit. They seemed to transmit and not receive. One interesting thing that happened at our hotel was that we saw a young man by the name of John McEnroe practising on one of the tennis courts.
On one of Gerry’s trips, I branded him Sierra Eriera, a good name he could use for a travel agency. He had organised a two-stop holiday in Los Angeles and Hawaii around Christmastime. In LA, we stayed at the Beverly Hilton and took the kids to the usual attractions – Hollywood, Disneyland, the Farmers Market and all that stuff. Then we flew on to Hawaii.
During flights, Western Airlines ran little competitions to keep the passengers occupied. One competition was to guess the exact time we would reach the halfway point between LA and Hawaii. As a pilot, this was a cinch for me. I filled out seven forms, one for each of the people in our party. Each form had a minute’s difference in the answer.
Before we landed in Honolulu, the hostess read out the names of the competition winners over the intercom. ‘In first place, Simon Sugar. In second, Alan Sugar. In third, Louise Sugar. In fourth, Karen Eriera, and finally, in fifth place, Daniel Sugar.’ Amusing, but quite embarrassing.
We arrived in Hawaii, a fabulous place with a completely different culture from mainland America. It was just as you’d imagine – grass-skirted girls welcomed you with flowery garlands as you stepped off the plane.
Before leaving England, I’d mentioned to Gulu Lalvani that we were going to Hawaii. He told me that his wife Vimla’s family lived there and that he too would be visiting at Christmas.
The hotel we stayed in was the Kahala Hilton, the best in Honolulu. There was a large pool containing dolphins in the hotel grounds! We meandered onto the beach where we came across celebrities such as the Brotherhood of Man, who had recently won the Eurovision Song Contest, and megastars like Diana Ross. Interestingly, no one pestered these famous people. They were able to relax in peace, which they must have found quite refreshing.
Sure enough, during our stay, Gulu phoned me. I asked him and his wife Vimla to lunch at our hotel. Vimla was a tall and beautiful Asian lady who spoke with an American accent, having been brought up in Hawaii.
Sitting with Gulu over lunch was like being on Mastermind. He’d fire his questions at you as if he were using an M16 machine gun – probing, impertinent questions that businesspeople don’t normally ask each other. ‘How many of those did you buy? Who did you buy them from? Who did you sell them to? How much did you pay? Are you finding they’re selling well? Are you going to get into this business? Are you going to sell that? How are car stereos doing?’ Even before you had a chance to answer, he’d unleash his next question.
In the end, I called him Magnus Magnusson, which went over his head – he obviously didn’t watch much TV. I asked the others to get me a black chair and put a spotlight on me because this guy was like a KGB interrogator. They all knew Gulu’s ways and couldn’t help but laugh. Gulu must have realised what he sounded like. ‘So sorry. So sorry to spoil your holiday. I am always talking business, always talking business.’
He was right there, but to be perfectly honest, around that time of my life – at the age of thirty-one – that was all that was on my mind too. On holidays, as long as the hotel had a telex machine, I was happy. I called the office in London every day. I would be visualising the goings-on at the factory, wondering what was happening on orders and outgoing shipments. Communication was absolutely vital to me. It became my major tool in business advancement in the y
ears that followed.
So, let’s step back a moment and recap. There I am in Hawaii, sitting by the pool, best hotel in the world, Diana Ross on the beach, and Gulu there for lunch. This was Gulu Lalvani, the man who used to sell me a box of radios which I’d have to hump off his loading bay into my clapped-out minivan, no more than eight or nine years earlier. How times had changed! Those thoughts must have gone through my mind that day – they were certainly going through Gulu’s mind because it was at this stage that he started to become my greatest ambassador.
He invited us to Vimla’s mother’s house for dinner a couple of days later. It was a fabulous place, full of servants, with a beautiful ocean view. Gulu sat there singing my praises to the family. ‘You see this man? He used to come to my place, I gave him credit, I gave him some goods, I started him in business. And now he’s one of the biggest manufacturers of hi-fi in England. He used to come along with his little van and sometimes Ann would be in the van to help him unload . . .’
‘Hold on, hold on!’ While I was quite happy to let him babble on, I drew the line there. ‘Gulu, thank you for the accolades, but please, now you’re getting carried away with yourself. Ann was never in the van; she was never unloading.’
‘You sure? You sure, Alan? I’m sure I saw her in the van.’
‘I don’t think so. In fact, Gulu, the first time you actually met her was a couple of days ago in the Kahala Hilton!’
‘Is that right? Is that right, Alan? I didn’t realise that. Maybe I’m getting a bit confused.’
‘Yes, you are getting a bit confused. But carry on, carry on, Gulu – I’m enjoying hearing my life story,’ at which the family and friends started to laugh.
I told him, ‘If you could speak English properly, or write English properly, I’d let you be my biographer.’