Has Branson got his mojo back?
Don’t let the lull and permatan fool you, the bearded one is back with a vengeance
Playboy, philanthropist and all-round-nice-guy? Or mega-rich, island-owning, show-off?
Two things are certain about the Virgin Group boss - he gets pulses racing and people talking wherever he goes.
Yet the last six years have been relatively slow ones for the UK’s best-known entrepreneur.
Sure, he’s seemingly been busy launching himself into obscure adventures such as space travel and embarking on environmental crusades, while constantly nattering on and on and on about his home on Necker Island and all the celebrity “friends” he hosts there. But there was a danger he was cruising.
There has been no sign of the next billion pound idea for a while.
Now that’s changed. Recent feats make it look like Britain’s 4th richest person has got his business mojo back.
Recently Branson emerged victorious over West Coast trains and sent the government packing with their rail franchise disaster tucked between their legs.
He has paraded around Mumbai dressed as a maharajah escorted by of a harem of cheerleaders to advertise the opening of Virgin’s new Mumbai to London flight route. He might also be taking some 320 RBS branches to expand Virgin Money.
Oh, and he’s green-lit Virgin Galactic’s commercial flights. Next year Branson and his family - plus hundreds of tourists who have pre-paid £124,000 for the privilege - are going into space on Branson’s spaceship.
Before these conquests we might have been excused for thinking that the 62-year-old had lost his go-getter spark. After all, he has pretty much looked the same for the last 20 years, as if acquiring a fortune worth nearly £3 billion has been so stress-free that it has spared him the onset of wrinkles and even the hint of a receding hairline. Branson self-professedly sleeps like a baby every night.
For all the smiles and island retreats though, the bearded one is not quite the worry-free Midas he might appear.
From the early days when he almost ended up in jail for flogging tax-free records, to the giant flops that were Virgin Vodka and Virgin Cola in the 1990s, Branson’s rise has resembled the jaggedness of a stock sheet, albeit a pretty damn bullish one.
In 1992 Branson was forced to sell his beloved Virgin Megastores to rivals EMI. He apparently cried the day the sale went through, although the £500m price tag probably eased the pain somewhat.
At the time Branson was embroiled in an ongoing battle with arch-rivals British Airways and looked like he might crash and burn.
It was widely reported that the then BA chairman Sir John King was so enraged by Virgin’s stunt of flying British citizens home during the First Iraq War, that he ordered CEO Colin Marshall to “do something about Branson.”
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A vicious war ensued. Virgin pressed charges against BA, and BA eventually ended up settling. They paid Branson £3m in legal fees, plus over £610,000 in damages. In his nonchalant way, the Virgin boss redistributed the cash to his employees as the aptly named “BA bonus.”
It’s stories like this that have made Branson an international superstar, and its precisely the kind of thing that makes it pretty hard to dislike him, once you get past all the incessant Necker references.
Then again, his almost maddening persistence and obsessiveness over things the rest of us would have just let go of already, is part of the reason why Branson has reached where he has today.
He is the head of 400 companies within the Virgin Group, ranging from planes and trains to health clubs and credit cards. He also runs several charities and trusts, and is one of the leading pioneers in space travel and deep sea exploration. Yes, the last one is stationed on his private British Virgin Islands island. It’s the Bermuda triangle of name drops, there is no escaping it.
For all of Branson’s lounging around in hammocks though – he incessantly mentions this in his new book Like a Virgin – his recent trail of successes suggest that he has not allowed his empire to grow bloated or slow.
In 2007 as the world was going to hell and queues had long formed outside Northern Rock, Branson tried to step in and buy the troubled mortgage lender. Our esteemed business secretary Vince Cable - then very much languishing in third party purgatory - helped lead a charge against the sale.
The Northern Rock bid ended up collapsing in the 11th hour, with the government forced into backing the stricken firm’s theoretical liabilities of £113 billion. They had already covered £26 billion of liabilities with public funds, which Cable and others suggested Branson couldn’t be trusted to deal with.
All well and good, except that in November 2011, the government sold 100% of Northern Rock to Branson. It did so at a reported loss of £400m. Branson paid up to £1 billion in the re-privatisation deal, justified by chancellor George Osborne on grounds that it “was the best available.”
Branson might be all smiles, but you really don’t want to find yourself on the wrong business end of the former Stowe boy who famously left school at 16 to start the originally named magazine The Student. He still has a knack for getting his way.
If the current RBS branch deal goes through, it looks like it will be a good one for Virgin.
Branson was outbid by Santander in 2010, with the bank spending the next two years hammering out a deal before walking away for good last month.
As shares in the largely nationalised bank started to fall Branson quickly started his own negotiations.
The speed at which he was able to step in is something that still sets Branson apart from his multi-billion-pound company peers. Branson has repeatedly asserted that while now a giant multinational, Virgin has retained its original entrepreneurial spirit. Hence the revived RBS deal.
If approved, it could end up costing the taxpayer £1 billion, but what’s another £1billion when the public has long become accustomed to being stuck with the bill when banks and governments get things wrong?
Last year, the transport union TUC says a £2.7 billion net payment was made from the public purse to Virgin Trains to operate the controversial West Coast franchise.
Indeed, up to £3 billion a year has been flowing to Virgin on the deal annually for some time. But this figure is not what it seems. All train companies are subsidised by the government. It doesn’t appear Virgin was getting a better deal than the other players.
This helps to explain Branson’s outrage when FirstRail clinched the West Coast deal from Virgin back in August.
The company promised to substantial upgrade trains and boost capacity but Virgin cried foul. It had run the line since 1993, servicing 31 million commuters travelling from London to Scotland and West England annually.
When Virgin’s pleas to get the decision reviewed or delayed went unheeded, Branson threatened legal action. Just before the case went to court though, the government backed down literally in the middle of the night.
It was a big win for Branson. Virgin looked like it was on its way out of trains entirely before it was granted rights to operate the track for nine more months until bids for a full 13-year contract are examined. It has since announced plans to bid for East Coast trains too.
Branson’s money may have bought him the legal clout he needed to force the government into looking over its accounting, but it’s a good thing he flexed his financial muscle.
More and more evidence has appeared that the auction of the rail franchise was gravely mishandled from day one. An interim report released into the affair this week said that the ministry “was biased against Branson” and wanted “anyone but him.” This is on top of fundamental miscalculations about basics like inflation they seem to have botched up
So is Branson really back at his mojotastic best? It seems so.
Even his kookier quests are paying dividends all at once. Virgin Galactic is soon to be a GO. It even looks like Branson might get his beloved Virgin Megastores back. He started negotiations this summer to buy the chain back for a reported £1.5 billion.
Plus Branson’s submarine the Necker Nymph - just so you don’t forget about the island even for a moment - will also be launched. It’s just a prototype, but is supposed to be one of the most agile underwater vehicles in existence. It’s hoped it will revolutionise marine exploration for both scientists and curious tourists.
For all his ballooning and boat racing there is no denying Branson is as tenacious as ever. He refused to walk away from the trains deal. He’s refused to walk away from the RBS deal and he’s refusing to retire.
His comeback has already ruffled a fair few feathers in government and beyond, but Branson thrives on this kind of stuff. He’s the living proof that 60 is the new 40, or in Branson’s case 30.
It’s clear that Sir Richard is back and possibly bigger than ever. How could we ever have ever doubted the bearded one?
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