BQ North East Issue 06

www.bq-magazine.co.uk

ISSUE SIX: SUMMER 2009

MARION MAKES IT HAPPEN Marion Bernard: investing in tomorrow’s entrepreneurs SOMETHING FOR THE WEEKEND

Saks’ Stephen Kee on marketing a new breed of men’s barbershops with sex, sports cars and sport

HOME PRIDE Hossain Rezaei’s recipe for making lots of bread; literally and metaphorically

IN HIS DEN

Duncan Bannatyne: how to make £320m on the strength of five hours a week in the office

ISSUE SIX: SUMMER 2009: NORTH EAST EDITION

BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

NORTH EAST EDITION

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BUSINESS QUARTER: SUMMER 09: ISSUE SIX Now, more than ever, we all need a bit of extra motivation and inspiration, and the personalities profiled within these pages offer both in spades.

Our editorial team ended up almost glowing this quarter, having bathed themselves in the company of Duncan Bannatyne, Stephen Kee, Hossain Rezaei, Marion Bernard, Terry Laybourne and more.

The thing all these people share, our interviewers report, is a sense of purpose, a drive to make things happen and a radar fully attuned to opportunity. They are inspirational because they share a positive outlook, an attitude that simply gets things moving.

Realistic business people yes, but not one of them is hung up on the doom and gloom of recession, which is, no doubt, why they are so successful.

Stephen Kee, in particular, is having fun at the head of Saks - now a huge brand with 140 hair and beauty salons, a chain of academies accredited by the LSC, and big plans for a chain of barbershops, stand-alone beauty clinics and expansion into the Middle East.

How refreshing to find, in these difficult times, a man not only heading up a hugely successful business with an ambitious growth strategy, but also doing it with a healthy dose of humour.

Duncan Bannatyne gets our vote for many reasons, but mainly because he only spends five hours a week in the office - and why not, when his BlackBerry and laptop function just as well from the poolside of his villa on the French Riviera? Admit it, you’re only jealous.

Meanwhile, Hossain Rezaei, serial entrepreneur and maker of, among many other things, fabulous flatbreads, is enjoying an enviable home-work balance and motivating next-

generation entrepreneurs with his neverputdownable enthusiasm and his zest for life.

We’re also doing our bit - we hope - for the good of the region now with our new BQLive debate series, launched in this magazine with Brian Nicholls’ in-depth report of our first event at Newcastle’s Malmaison Hotel.

Facilitated by the endlessly talented and energetic Caroline Theobald and her team at Bridge Club, we brought together a group of the region’s leading change-makers to debate the question, ‘what are the big priorities for the North East business community, to ensure we sustain the momentum generated over the last decade?’

See pages 28-33 for the fascinating result of the debate, and details of your own opportunity to take the debate forward at our next event.

Then, send your contributions, ideas and pearls of wisdom to our editorial team at editor@bq-magazine.co.uk and, if you see us out and about, tell us what you’re doing; you may just find yourself in print.

CONTACTS ADVERTISING e: sales@room501.co.uk t: 0191 419 3221 EDITORIAL Brian Nicholls e: b.g.nicholls@btinternet.com Jane Pikett e: jane@thecreationgroup.co.uk DESIGN & PRODUCTION Euan Underwood e: studio@room501.co.uk PHOTOGRAPHY KG Photography e: info@kgphotography.co.uk ROOM501 LTD Christopher March Managing Director e: chris@room501.co.uk George Cheung Director e: george@room501.co.uk Euan Underwood Director e: euan@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk Mark Anderson Business Development e: mark@room501.co.uk Debi Coldwell Senior Sales e: debi@room501.co.uk room501 Contract Publishing Ltd, 10 Baird Close, Stephenson Ind Est, Washington, Tyne & Wear NE37 3HL www.room501.co.uk

THE LIFE AND SOUL OF BUSINESS

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room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2009 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, July 2009.

BQ Magazine is published quarterly by room501 Ltd.

BUSINESS QUARTER |SUMMER 09

CONTE BUSINESS QUARTER: SUMMER 09 HOME PRIDE

42 HOME PRIDE Hossain Rezaei, serial entrepreneur; turning loaves into profit figures

46 HOME SUITE HOME

Features

The world’s biggest hotel group makes its mark on Newcastle

50 MARION MAKES IT Marion Bernard’s method for spotting tomorrow’s entrepreneurial successes

18 A DRAGON’S DEN Duncan Bannatyne’s magic formula for financial success and philanthropy

28 BQ LIVE Some of the region’s most influential voices kick off our first live debate

36 GOOD CHEMISTRY The driving ambition behind Cambridge Research Biochemicals of Billingham

BUSINESS QUARTER | SUMMER 09

78 SOMETHING FOR THE WEEKEND

42 SOMETHING FOR THE WEEKEND

Stephen Kee, MD of Saks Hair and Beauty, on his breed of barbershops

82 A MATTER OF TASTE Great coffee, the Pumphrey’s way

88 STAR QUALITY Orion’s Richard Metcalfe on his journey from sports field to sports kit

04

78

TENTS NORTH EAST EDITION

34 AS I SEE IT

Deloitte’s David Harker outlines some harsh financial realities

BISTRO HIT

54 BUSINESS LUNCH Cafe 21’s Terry Laybourne checks out the opposition’s lunchtime fayre

Regulars

58 WINE NIck Swales’ new investments

60 FASHION Tommy Hilfiger’s all-American style

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ON THE RECORD Who’s making the news in Q3/09

10 NEWS Who’s doing what, when, where and why, here in the North East

22 COMMERCIAL PROPERTY The landmark developments building the region’s industrial landscape

66 EQUIPMENT Time flies with Bremont watches

54 SWALES ON WINE

70 MOTORING Ben Cottam, of Cottam Brush, unleashes the boy racer within

96 EVENTS Top events this coming quarter

98 FRANK TOCK Gripping gossip from our backroom boy

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58 BUSINESS QUARTER | SUMMER 09

ON THE RECORD

SUMMER 09

National recognition for the region’s entrepreneurs, a soaraway 82% rise in start ups in East Durham, 2,500 Tesco jobs, and 10 Queen’s Awards for Enterprise; they’re all on the record this quarter >> Outstanding college Gateshead College won the top accolade in Service Network’s Culture for Success Awards, recognised for an ‘Outstanding’ Ofsted report and a successful £60m investment in a new campus.

Ryder Architecture, Northumbrian Water and Northern Stage were category winners.

>> Culture bid Tourism, retail and entertainment businesses could be in for a big fillip if Durham City succeeds in its bid to be Britain’s City of Culture in 2011.

Award nominees: (back row l-r ) Graeme Lowdon, Richard Vertigan, Greg Phillips, Neil Stephenson; (front row l-r) Steve Nelson, Chris Peacock, Ian Edge, Arnab Basu. Six nominees go to the final of Ernst and Young’s awards

>> The magnificent six Entrepreneurs representing six North East companies have won through to the national final of the Ernst and Young Awards for self-starters. All members of the Newcastle-based Entrepreneurs’ Forum, they took six of the 14 categories contested in the North and Midlands round of the event, which also included nominations from the Scottish Borders. They are: Greg Phillips, managing director of Newburn-based North East Bakery Steve Nelson and Richard Vertigan of software developer and distributor 4 Projects, Sunderland Graeme Lowdon, co-founder and chief executive of Nomad Digital, which provides mobile network solutions for the global transport industry from its Newcastle base. He won the Forum’s Entrepreneur of the Year 2009 Neil Stephenson, chief executive of Middlesbrough-based Onyx Group, which delivers managed IT services to businesses Dr Arnab Basu, of Durham Scientific Crystals (Kromek), manufacturer of medical and precision instruments at Sedgefield Ian Edge, of Quantum Specials in Burnopfield, which delivers bespoke drug formulations not readily available from drug manufacturers to a large customer base Also nominated was Chris Peacock, MD of Peacocks Medical Grpoup.

The winner of the London final goes on to Monte Carlo next May to battle for the world title.

Greg Phillips and Graeme Lowdon were earlier honoured by fellow members of the Forum at an awards ceremony held after its annual conference. Graeme was named Entrepreneur of the Year while Greg took the Emerging Talent award.

A Lifetime Achievement Award also went to Alan Reece of Pearson Engineering.

Of him, Tony Trapp, managing director of IHC Engineering Business and last year’s Entrepreneur of the Year, said: “Alan has created more wealth in this region than anybody else I can think of.”

BUSINESS QUARTER | SUMMER 09

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>> Soaring start-ups Business start-ups rose 82% in the year to March in East Durham, despite the credit crunch.

The businesses helped by East Durham Business Service (EDBS) and Be Enterprising range from Corgi-registered plumbers and a weight-loss programme to a freelance writer and a limousine hire company.

>> You are being served Supermarket giant Tesco hopes to create 2,500 jobs in the North East, mainly at Teesport, Gateshead, Bedlington, Newcastle, Consett and Morpeth. Teesport is getting about 800 of the jobs at the group’s major distribution centre opening there.

>> Bridges are best The new Infinity bridge over the Tees at Stockton has won this year’s Robert Stephenson Award in the over £4m category.

Blue House bridge on the A1058 Coast Road in North Tyneside won the under £4m category. Contractor for Infinity was Balfour Continued on page 08

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ON THE RECORD Beatty Civil Engineering with consultancy by Expedition Engineering and project management by White Young Green.

For Blue House, the contractor was Carillion Civil Engineering, the consultant Scott Wilson The awards are presented by the Institution of Civil Engineers North East for the over £4m category.

>> Coal’s comeback Teesside is getting one of four new carbon-capturing coal power plants being built in the UK to beat energy shortages.

>> Pleasing the Queen Ten North East firms – double last year’s tally – have won the Queen’s Award for Enterprise.

Six won for international trade, three for innovation and one for sustainable development. They are: Arriva plc, Cleveland Cascades of Thornaby, HVR International of Jarrow, Liebherr Sunderland, Nissan, Torque Tension Systems of Ashington, Greenstar WES of Recar, IHC Engineering Business of Riding Mill, Northumbrian Water and Tracerco.

Tracerco, the Billingham subsea technology group, has also been named North East Company of the Year in awards run by The Journal and Evening Gazette with Business Link.

Lifetime Achiever honours in the Queen’s Awards went to Allan Gibb for his work in enterprise education and enterprise support in the UK over 30 years, and to David Irwin, of Irwin Grayson Associates, Stocksfield, who co-founded and was chief executive of one of the first enterprise agencies, Project North East (PNE).

>> Renewables take root Shepherd Offshore is to build an £8m factory at the former Neptune shipyard at Wallsend for manufacturing in renewable energy. Engineer SLP is making a neighbouring yard its UK manufacturing base.

BUSINESS QUARTER | SUMMER 09

SUMMER 09

Over the river at South Shields, McNulty Offshore is building a 1,600 tonne sub-station to serve 140 wind turbines 16 miles off the Suffolk coast. It raises the workforce by 200 to 600 for a year.

At Teesside, Gaia Power (set up by Ensus founder Michael Fox) awaits permission to build a wood-burning power plant on the site of a former conventional power station. It is providing 50 permanent jobs and 400 more in its construction.

>> Press investigator Neil Fowler, former editor of The Journal, Newcastle, is to make an academic study of the post-war history of local Press, and the impact of digital technology and the internet.

Winner of a Guardian research fellowship at Oxford, he plans to make recommendations for the future, examining business models that could apply to local papers.

The merged practice, known as Devereux Architects, has more than 150 staff, making it one of the largest architecture firms in the North East. Dewjo’c was founded in 1900.

>> Wright step in Europe Nigel Wright recruitment, 80 of whose 130 staff work at its Newcastle headquarters, is expanding in Europe. A launch in Copenhagen is being followed by one in France with others to follow.

>> Clough leaves early John Clough, who founded Eaga - the Newcastle environmental support group with a stock exchange listing - has stepped down as chief executive at 50 due to ill health.

Commercial director Drew Johnson has succeeded him.

>> North East wins tourists The North East’s £4bn tourist industry is the only one outside London to have shown a rise in visitor numbers last year.

More than 10m visitors came to the North East – a 10% jump, according to a national survey.

>> Fast flying Achiever: Jane Garvin

>> Jane’s the tops Insolvency lawyer Jane Garvin has come top in a nationwide examination. An associate at Ward Hadaway in Newcastle, she scored more than any other UK lawyer in the Joint Insolvency Examination Board’s 2008 examination.

>> Architects merge Award-winning Dewjo’c Architects, with practices in Newcastle, Teesside and London, has merged with Devereux Architects, one of the UK’s top 50 and part of the PM Group.

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Eastern Airways, which provides six routes to cities from its Newcastle hub, has been rated the airport’s best on-time performer for three years running.

>> Chief exec steps down Rupert Dickinson, 49, has stepped down for health reasons as chief executive of Grainger plc, the UK’s largest private landlord based in Newcastle. A pre-tax loss of £143m for the half-year has been announced. Finance director Andrew Cunningham is acting chief executive.

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NEWS

SUMMER 09

Fabricom Offshore set to double turnover and create 150 new jobs, Pyeroy profits up 8%, Gainford Care Homes plans 300 new jobs, and Hays Travel rescues Freedom Direct’s staff. It’s all in the news ...

Innovation Scout (think American Indian) says the dossier could benefit organisations looking for opportunities to innovate for consumer needs.

Peter Arnold, chief executive of Newcastle Science City, said: “Innovation Scout matches our own aspirations to create wealth for Newcastle by matching solutions to problems. Through a pilot scheme, they will be suggesting for us the best way forward for our own vision.”

>> Helen’s a Mere Mortal Award-winning TV director Helen Spencer has joined Mere Mortals digital media and film company.

Helen, who directed BBC1’s hit Your Country Needs You, with Sir Andrew Lloyd Webber and Graham Norton, is now director of creative media for the Newcastle-based firm.

Already in talks with major UK television networks, she hopes to showcase Mere Mortals’ skills to a range of sectors, including the arts and broadcast communities.

She said: “I’ve been increasingly interested in multimedia and Mere Mortals embraces the whole winning package of TV, films, games and web.”

Mere Mortals worked on smash hit films Slumdog Millionaire, 28 Weeks Later and Sunshine, as well as computer games for Xbox, Wii and PlayStation.

Managing director Steve Walmsley said: “Helen’s appointment will ensure we continue to offer clients cutting-edge creative solutions.”

With guidance from Mere Mortals, Michelle Dewberry, former winner of TV’s The Apprentice has recently launched a fashion and lifestyle website.

Dewberry, the 2006 winner, worked with the firm to set up www.chiconomise.com after famously leaving her role with Sir Alan Sugar to start her own business. She has more than 20,000 subscribers.

>> Taking the high road The multi-million pound contract to refurbish Scotland’s Forth Rail Bridge is one of a number helping Pyeroy industrial services Group to boost profits.

Despite tough trading, annual pre-tax profits for the Gateshead-based company have topped £4.5m, almost 8% up. Turnover was beyond £54m.

Pyeroy now has a joint venture company with Cape Industrial Services which is called Ship Support Services.

This is BVT Surface Fleet’s preferred bidder to tackle access and specialist coatings work on the £3bn and rising contract for the Royal

BUSINESS QUARTER | SUMMER 09

>> Success offshore

Director: Helen Spencer

Navy’s next generation of aircraft carriers.

Throughout the UK and Ireland, Pyeroy employs 1,000 people.

>> Scouting for solutions Innovators Nick Devitt and David Townson are making it their business to find scientific solutions for everyday problems.

The pair, working with Newcastle Science City through their company Innovation Scout, already have a dossier of hundreds of ‘un-met needs’.

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A successful first year’s trading now has a Tyneside offshore firm on track to double turnover and create up to 150 new jobs.

Fabricom Offshore Services - a subsidiary of Fabricom GDF Suez UK - specialises in design and detailed engineering, maintenance and modification work to North Sea facilities and platforms.

It also carries out field decommissioning work and other offshore services for major oil and gas companies.

Now it aims to quadruple its workforce to 200 by 2012, encouraged by contract wins which include a multi-million pound deal with upstream oil and gas operator Talisman Energy (UK) to provide engineering modifications, helping to connect subsea power and controls systems to one of Talisman’s North Sea platforms.

Since setting up at Balliol Business Park, North Tyneside, early last year, Fabricom Offshore’s workforce has risen from three to more than 50. At the same time, it is investing heavily in engineering design software and equipment.

Chairman Nigel Carlton said: “Our expertise and growing customer base has established us as a major player in the region’s growing energy portfolio.”

Elsewhere on Tyneside, 400 workers in Gateshead have been assured about their jobs as Anson engineering firm moves into American hands.

SUMMER 09

It was sold to National Oilwell Varco just as it was named 34th on Britain’s list of private firms with the fastest-growing profits.

Anson, which makes valves and high-pressure wellheads, was started by the Anderson family in 1981 after their previous business collapsed.

From the launch factory at Blaydon, Anson moved to Team Valley and today it employs 400 staff, also in Louisiana and Houston as well as Dubai, Aberdeen, Singapore and Moscow. Its client list in the energy industry includes BP, Halliburton, and Schlumberger Anson’s management team and name are being retained, a spokesman for the buyer said, and the firm will benefit from access to North American markets. Its profits have grown from £1.5m in 2004 to £8.4m in 2007.

>> Just the ticket Pub firms are using technology devised on South Tyneside to help their delivery drivers avoid parking tickets in London.

Inventor Phillip Tann and motorists’ champion Neil Herron have also secured their company, Fleetm8, £60,000 of support from NorthStar Equity Investors to take Tann’s vehicle-tracking device even further following trials in India.

>> Gainford expands Mohammed Khaliq’s Chester-le-Streetbased Gainford Care Homes expects to create 300 jobs over two years with openings at Throckley and Newbiggin in Newcastle, Newton Hall in Durham, and two other locations yet to be named.

NEWS

>> Buy local Businesses in Hartlepool are urging locals to support the town’s economy by sourcing products and services on their doorstep.

The Hartlepool Buy Local campaign is the brainchild of the town’s Enterprise Centre.

>> Sun shines after travel collapse

Winners: Elena Dickson receives an award from award sponsor Richard Ord of Coleman’s, another South Tyneside achiever as this year’s best fish and chip restaurant in England

>> Award for butcher Dicksons family business, world famous on the internet for its saveloy dips, was named Retailer of the Year and overall Business of the Year at the 2009 South Tyneside Business Awards.

The pork butcher, with its own production centre at Tyne Dock and 20 shops across Tyne and Wear, has annual sales nearing £10m and is getting a multi-million pound re-brand.

Elena Dickson, head of marketing, said: “The awards are a great honour. Our staff have worked so hard to help make this possible.”

In any disaster, businesses in Edinburgh and the surrounding areas will have immediate access to top-of-the-range facilities. Customers wouldn’t notice any disruption at all

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Hays Travel has taken over much of its collapsed North East rival Freedom Direct, saving jobs and customers’ holidays.

MD John Hays said: “We were sad about Freedom Direct. It had a good reputation and excellent staff. Fortunately, we were in a position to purchase its assets.”

>> Brush with China Cottam Brush of Hebburn has swept into China, appointing a sales agent there to drive sales of brushes whose uses range from sweeping floors to pipelines.

The firm, launched by the Cottam family in 1858, is now run by the sixth generation. With support from UK Trade and Investment, it has also found markets in the USA, Dubai and Barbados.

>> Cross-border spread for Onyx Technology solutions firm Onyx Group continues its spread from the North East into Scotland with the opening of a new office and workplace recovery centre in Edinburgh’s South Gyle.

The new centre offers managed workspace for up to 250 people who might relocate in the event of their company suffering IT breakdown. It links also to its workplace recovery and data centres in Glasgow, and will take in staff previously working in Dalkeith and Falkirk.

Group chief executive Neil Stephenson said: “In any disaster, businesses in Edinburgh and its surrounding areas will have immediate access to top-of-the-range facilities. Customers wouldn’t notice any Continued on page 12

BUSINESS QUARTER | SUMMER 09

NEWS

SUMMER 09

disruption at all.” Middlesbrough-based Onyx, which also has operations in Newcastle and Gateshead, provides managed services and networking to more than 3,000 UK customers. It also has a workplace recovery centre in the North East and has quadrupled its turnover from £3m to £12m in two years.

>> False economy warning Councils trying to save public money by trying to force down tenders for building and civils contracts are being urged to think again.

Contractors warn that short-term gains could be more than offset by the eventual costs of delays getting the work done caused by calls for second tenders, coupled with benefit payments to construction and civils workers made jobless by firms collapsing through

cutting their bids below breakeven.

The warning comes from the North East Region of the Civil Engineering Contractors Association, CECA (NE).

Director Douglas Kell said: “Invitations to second bid by e-auction are increasing, but delays from prolonging the process, the extra administration, plus unemployment and other benefits displaced workers must be paid could easily offset the original margin of difference at taxpayer’s expense.”

CECA (NE) estimates civils contractors in our region will have shed 19% of their entire workforce by the end of this year.

>> Who’s there?

Newcastle company Artingence is developing software to replace call centre workers with robots.

>> If the jacket fits J Barbour and Sons, whose famous waxed jackets are favoured by aristocracy and anglers alike, has won a national Best Brand award in the Sunday Times PricewaterhouseCoopers track awards.

Invitations to second bid by e-auction are increasing, but delays ... could offset the original margin of difference

TRAINING

FINANCE

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E-COMMERCE

IT

ENVIRONMENT

LAW & LEGISLATION

PREMISES

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BUSINESS QUARTER | SUMMER 09

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SUMMER 09

>> Website hat-trick for room501

Comfortable: Jim and Lynn Tubrit

>> Couched in publicity Jarrow-based Beaumont Upholstery owners Jim and Lynn Tubbrit have now twice joined TV’s 60 Minute Makeover team to help transform people’s homes and win crucial PR in the process. They have also appeared on the show themselves. They started the firm with backing from the South Tyneside Means Business group.

room501 Publishing has scored a hat-trick of website launches for new clients.

Rowlands Accountants, Birtley, Piramal Healthcare, Morpeth, and Tyne & Wear Development Company (TWDC) have all recently introduced the new sites created by the North East design and publishing company’s fast-growing online design team. room501 director Chris March says: “We’re still less than two years old, and web design is the newest division of our business. So it’s especially pleasing to find leading companies and organisations using us.”

The commissions, all received within a couple of weeks, have now been launched within days of each other.

“These sites are excellent examples of how creatively we interpret our clients’ brief. We’re now growing our web design division to

NEWS

handle increasing business,” Chris added.

The Piramal Healthcare site, at www.piramalclinicaltrials.com is for its new clinical trials company, part of the global concern Piramal Pharma Solutions. The Rowlands Accountants site at www.rowlandsaccountants.co.uk updates and refines the company’s brand image.

The TWDC site at www.contactcentreawards. co.uk is part of a package room501 has put together for The North East Contact Centre of the Year Awards. It includes, besides the website, associated print publicity, including brochures, entry forms, awards-evening materials and certificates.

Sarah Gibson, marketing officer at TWDC, said: “We commissioned room501 because we were impressed by their design, expertise and ability to interpret creatively a brief in previous work we’d done with them.”

Continued on page 16

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BUSINESS QUARTER | SUMMER 09

COMPANY PROFILE

SUMMER 09

Businesses have a great opportunity now to help to hone the skills of tomorrow’s new-generation business stars and entrepreneurs, thanks to the growing link between Newcastle Business School and the city’s schools

HOW YOU CAN WORK WITH THE BUSINESS STARS OF TOMORROW

O

VER the last year, university students have been back to school to work with A-Level and BTEC students in honing their enterprise and employability skills.

And the year-long link between Newcastle Business School at Northumbria University and schools in the city has been so successful that it will be repeated in the coming academic year, which is where the region’s businesses can get involved.

Under the programme created by Newcastle Business School in association with Newcastle Education Business Partnership (EBP), BA (Hons) Corporate Management students design, deliver and evaluate a series of activities with Year 12 A-Level and BTEC business studies students.

Working in small groups at Sacred Heart RC School, Walker Technology College and Gosforth High School over the last year, the university and school students organised a series of activities themed around marketing and people management, which counted towards elements of their degree and to the school students’ A-Levels and BTEC qualifications.

“The activities benefited our students in terms of their planning, delivery, evaluation and people management skills, and offered the school students a fantastic opportunity to develop their employability skills and get a real taste of university life,” said Dr Sandra Corlett, Director of corporate programmes at Newcastle Business School. “Our students also created resource packs for the teachers at the schools, so they benefited too.”

The three-year BA (Hons) Corporate Management programme is highly innovative in that students spend the first year at University followed by two

BUSINESS QUARTER | SUMMER 09

Linking students and business: Gillian Bulman, chief executive of Newcastle EBP

BUSINESSES BENEFIT DIRECTLY FROM INVOLVEMENT IN THESE PROGRAMMES, AND WE WOULD LIKE TO HEAR FROM THEM NOW years in full-time employment with study sessions back at University. During their studies, they are fast tracked in employability and personal skills, which is where the links with the schools, created

by Newcastle EBP working with teachers, come in.

“We work with businesses as sponsoring organisations in delivering learning activities, and in this case the EBP was the sponsoring organisation,” said Dr Corlett. “The students designed tasks which brought out employability skills. In one case, for example, they had a group working on a viral marketing campaign and in another they concentrated on self-marketing in the interview and work situation.”

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“We then held an event for all the groups to get together and present their findings from their activities to one another, which again developed more useful skills.”

Newcastle Business School and Newcastle EBP are now working together to organise another similar programme next year, again working with selected schools and businesses in the city for mutual benefit.

“This is a great example of how students close in age can work together with business input for mutual benefit,” said Gillian Bulman, chief executive of Newcastle EBP. “Much of the work took place at Newcastle Business School, which allowed the school students to get a real taste of university life, while both sets of students gained real insight into themselves, working in teams and developing important employability skills such as negotiation, design and delivery of tasks, evaluation and presentation skills. Crucially, the activities were also directly relevant to their qualifications.

“Businesses can benefit directly from involvement in programmes like this, and we would be very pleased to hear from any business which wants to have a direct input into university and school business studies students. We can tailor the level of involvement to benefit each business fully.”

For more information on EBP programmes, contact chief executive Gillian Bulman, tel 0191 277 4444 or see www.newcastle-ebp.org.uk

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22 Benton Road NE7 7EG www.lexus.co.uk/newcastle

299 DIN hp

148g/km CO2

44.8 mpg

WELCOME TO FORWARD LIVING

THE NEW FULL HYBRID RX 450h RX 450h prices start from £41,600 OTR. Model shown is RX 450h SE-L Premier priced at £56,085 including optional metallic paint at £580. Prices correct at time of going to print and include VAT, delivery, number plates, full tank of fuel, one year’s road fund license and £55 first registration fee. Certain components within the hybrid drive system have a five-year or 60000 mile warranty, whichever comes first.

RX 450h fuel consumption figures: urban 42.8 mpg (6.6 L/100km), extra-urban 47.1 mpg (6.0 L/100km), combined 44.8 mpg (6.3 L/100km). CO2 emissions combined 148g/km.

NEWS

SUMMER 09

“We needed the website to be easy to update, functional and easy to use for entrants and interested parties, also to reflect our brand properly and attractively. We’ve had great feedback about it.” room501 Publishing, based in Washington, publishes the annual North East Business Guide, Business Quarter magazine in the North East and Yorkshire, and Food Quarter magazine in the North East.

It also provides a full contract publishing and design service, along with web development, marketing and design and media services for businesses and organisations throughout the UK.

>> Awards for export UK Trade & Investment has joined forces with One North East, the North East Chamber of Commerce and HSBC to pay tribute to leaders in export in the region with the presentation of the annual North East Exporters’ Awards 2009.

They went to: New Exporter Award: Andy Hatton, technical director, Global Anodes UK, Billingham Export Achievement Award: Paul Rowe, MD Wessington Cryogenics, Houghtonle-Spring Innovation in Export Award: Alan Richardson, contracts/export manager, Hart Door Systems, Newcastle Export Communicator Award: Julie Morris, sales manager, Perry Process Equipment, Newton Aycliffe Passport to Export Award: Peter Claes, director, Catalytic Technology Management, Saltburn.

>> Turning Japanese Newcastle University spinout Orla Protein Technologies has a new agreement with a major Japanese electronics firm to develop jointly a new generation of miniature hand-held diagnostic biosensors to diagnose infectious diseases.

Orla, spun out in 2002 and backed by NEL Fund Managers, is also working with other Japanese partners on other prototypes.

BUSINESS QUARTER | SUMMER 09

Movie star: Tees Valley hits the big screen

>> Starring role for Tees Valley A new film about Tees Valley tourism shows the area has advanced over 20 years to a point where visitor numbers have risen by 33% in just over two years since the promotional body visitTeesvalley was set up. The film - It’s Happening - made by advertising agency Alcazar, was premiered during a tourism conference in Middlesbrough.

And Freya North, whose feisty female characters’ raunchy exploits make for best-selling novels, explained how popular culture influences tourism. Her links with the area helped set her 10th novel in Saltburn.

>> New airport Hilton The Hilton Group has stepped in to operate the delayed new £30m hotel nearing completion at Newcastle International Airport.

The 187-bedroom building should have opened in June, but the original operator Ramada Group pulled out and the builder went into administration.

>> Durham business nous heads East A group of 23 professionals from Jordan are the latest to graduate with Durham Business School’s Executive Masters in Enterprise Management, now delivered in the Middle East and Europe as well as the UK. At Durham, individuals from firms such as ScS and Premier Waste are also taking the course and learning how to improve strategic and operational performances.

>> Touch-button testing IDS, the thriving South Tyneside-based producer of medical test kits, believes it has a winner with its latest automated machine,

16

which enables doctors to test blood at the touch of a button.

A total of 1,000 of the kits will be made available to doctors around the world. The firm’s core activity, largely responsible for its £24.8m turnover, remains Vitamin D kits.

>> Retaining talent Lorna Moran, a key figure of the Entrepreneurs’ Forum and chief executive of NRG recruitment group, is behind a new programme to retain for the region those talented individuals who have lost, or might be losing their jobs during the economic downturn.

We needed the site to be functional, easy to use and to reflect our brand properly

SUMMER 09

>> Egger bids to expand

>> Cheaper hereabouts

Chipboard manufacturer Egger UK has had a planning application approved to add anew processing plant, offices and parking at its Hexham plant. It says 45 jobs could follow over three years.

The costs of running a small business in the North East have dropped faster than elsewhere in the country, an index by the Business Inflation Guide suggests. Declines in the cost of labour, advertising, vehicle and raw materials have all contributed.

>> Vertu keeps growing Rapidly growing motor dealer Vertu has used £7.9m from a recent £30m rights issue to buy parts of a troubled Midlands motor group in administration.

The firm, which is less than three-years-old but has the long-established Bristol Street Motors branding, has bought four outlets and a repair shop from Brooklyn Motor.

Vertu now has 45 franchised operations, in addition to four non-franchised and two service activities.

>> The Real Thing Blaydon-based Zytronic is providing technical expertise for Coca-Cola’s new drinks dispenser, offering more than 100 different drinks. The machine is being tried in the USA ahead of worldwide distribution

>> Building on MBO Owen Pugh, the Cramlington-based demolition and construction firm, expects

NEWS

to exceed £30m sales within five years.

It has grown already, from £16m to £21m, since acquiring Graydon Dawson of Newcastle, which added another 50 to a workforce of 250. The company, which has been in business since 1946, was sold by the Pugh family to executive chairman John Dixon and Grahame White in an MBO in 2005.

>> NVM speculates NVM has earmarked £15m to invest in three companies it is considering, with the possibility of more to follow.

The Newcastle-based venture capitalist, which has more than £160m of funds, sold its stake in three other companies last year, raising the value of its original £2m commitment to £6.5m for its investors.

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BUSINESS QUARTER | SUMMER 09

ENTREPRENEUR

SUMMER 09

THE DRAGON’S IN HIS DEN

Duncan Bannatyne – serial entrepreneur, philanthropist and one of the North East’s richest businessmen – tells Brian Nicholls the secret to making £320m on the strength of five hours a week in the office

BUSINESS QUARTER | SUMMER 09

The difference between Duncan Bannatyne and other seriously rich folk is that his personal wealth seems still to accrue while theirs is stationary or declining.

That’s a finding of the latest Sunday Times annual wealth list, and Bannatyne doesn’t quibble with the conclusion that his personal fortune is now £320m; 3% up in a difficult year.

How does he do it? “Hard work, good diligence, concentration on the business - and a bit of luck,” he suggests. This “concentration on the business” is fascinating; he still spends only about five hours a week in the office. “I couldn’t do that without a mobile phone and a BlackBerry,” he adds.

“I also have computers at the villa in France and at the London flat. So I can print out contracts away from this desk, and sit and read them at a poolside and things like that it’s not so much work as a way of life. Great.”

After our interview, he was to talk to an audience at the nearby Salvation Army centre in Darlington. “I was up at 7am today, meeting builders because we’re having an extension done at home. I was in the office by 8.30am. That’s about normal when I’m here.

I’m getting picked up at 5.30pm to go to Newcastle and fly to Bristol, where I’m filming tomorrow.”

He’s filming a new series, Fatal Attractions, about six British holiday resorts, and he will stay overnight with his eldest daughter in Bristol before the shoot at Barry Island in

18

Glamorgan. Our region doesn’t feature in the Virgin TV project, so Whitley Bay and Redcar can relax.

Afterwards, he will reach his Covent Garden pad by 11pm: another overnight stop. Is he not tempted to move from the North East?

“I’ve not really been able to consider it because my children are here,” he replies.

“I’ve six children aged seven to 25, although the eldest is in Bristol, the second oldest in London. I said to my seven and nine-year-olds at the villa in France, would you like to stay here?’ They said, ‘no, we want to go back to the North East’. So there’s no choice.”

That, and maybe because he has also become a granddad.

How then, does he get through all he does – driving several companies, appearing on Dragon’s Den and other programmes, writing newspaper columns and best-selling books, and revelling in charity work?

He reveals a sheet of A4 - his timetable for the day. “You just have to plan meticulously, all day through. My fourth book, being written at the moment, is How to be Smart with Your Time. It will come out a year after the current one, which is just out. That was How to be Smart with your Money. It’s a book a year.”

Back to the businesses and the 3,000 people he employs between Inverness and Hastings.

His 60 fitness clubs attract 163,000 members.

Aren’t people cutting back on club visits and hotel stays just now? Out comes another print-out – “hot off the press,” he says. >>

ENTREPRENEUR “Members are visiting clubs more times per month on average, so get more value for money. Memberships are up, too.”

He has three hotels – in Darlington, Durham and Hastings. At Darlington, bedroom revenue is down from last year, but bar and restaurant sales are up. ”Our spa business is well up, but everyone I know in the spa business is showing huge rises in turnover. Perhaps people are staying in Britain and spending in Britain. It’s certainly up overall,” he says.

For every move to a new activity, now or in the past – whether it be ice cream selling, nurseries, a radio station, casinos, stage schools, property or transport - he has worked the market skilfully. He sold his nursing homes (Quality Care Homes, as were) for £46m in 1996; the nurseries for £22m. He now has a 25% stake, with sole British rights, in Kurt Zeiss - the Swiss watchmaker.

What makes serial entrepreneurs like him grasshoppers? “For me,” he says, “coincidence. I went into health clubs because I broke a leg. Into hotels because I had spare land beside the clubs. Build a hotel where guests can use the health club – it seemed sensible. We went into spas just because they were growing phenomenally.”

He has only one bar – “thank God” – at The Gate in Newcastle. And he sold his casinos three years ago: “I didn’t like the industry,” he says.

Has the Clydesider been good for the North East, and the North East good for him? “I think so. I opened my office here with the nursing homes, now the biggest business of its kind in Britain, with hundreds still working around here. I employ 60 people in this office.

A lot of jobs in Darlington originate from me.”

He saw pre-tax profits at Bannatyne Fitness - Britain's largest independent health club company – more than double to £9.7m last year. His headquarters, Power House, is no glass palace. It’s functional, looking just like the former electricity board office block it is.

The interior is workaday tasteful; smiles and ‘hellos’ plentiful. Many staff are long serving; he rewards loyalty with responsibility.

Managers are free to run departments, even if there are occasional mistakes.

Bannatyne doesn’t draw a salary from his businesses, he economises with paperclips,

BUSINESS QUARTER | SUMMER 09

SUMMER 09

Bankers have made huge, horrendous mistakes. The ones who should be ashamed are those who have taken huge salaries and big lumps of money. MPs? Well, we always knew they were disgusting

20

and in the care home days he reportedly raised merry hell about a boiled egg missing from a kitchen. There’s generally nothing ferocious about that gruff Scottish voice, however.

Rather, it masks some sentiment.

Framed pictures give that away. A phalanx of family photos lines up like the Terracotta Army beside his desk, while pictures on his office walls and down the stairs record business successes. One at least shows him with Richard Branson who, like Donald Trump, is an entrepreneur he admires. “They’ve done it and shown anyone can do it,” he says.

Latest mementos include a recent 60th birthday greeting from the Prime Minister. It’s a day before Bannatyne’s friend and fellow entrepreneur extraordinaire Sir Alan Sugar debuts in the North East as Gordon Brown’s Enterprise Champion. Would Bannatyne have welcomed a Cabinet seat?

“I went to Chequers a couple of weeks ago and was chatting to Gordon,” he says. “He’s in a bad place at the moment. I don’t know how it’s going to end up.” Two years ago, Bannatyne thought Brown would be a good PM. Now? “I think Gordon isn’t the issue. The issue is our parliamentary system. We need fixed-term governments. Margaret Thatcher suffered as Gordon Brown is suffering. Tony Blair suffered.

John Major suffered. We must stop prime ministers deciding election days, simple as that. Four years and that’s it.”

And what of MPs and bankers? “I think bankers have made huge, horrendous mistakes. The ones who should be ashamed are those who have taken huge salaries and big lumps of money.

“MPs? Well, we always knew they were disgusting. Again, that’s difficult to resolve without fixed terms of parliament.”

Later, Bannatyne’s hour-plus talk, with questions, at the Salvation Army is received by a homeless audience which listens intently.

Major Robert Davies, a social services director for the Salvationists, thinks this may be because many of Banntyne’s earlier experiences may have echoed those of some members of the audience.

Bannatyne says that the key to becoming a successful entrepreneur is to just to do it.

“Anyone can. It’s not difficult. Find something

SUMMER 09

and go for it.” What then, does Dragon’s Den reveal as the biggest mistake young aspirants make? “I suppose they think they must do something unique or different. They don’t.

They don’t really have to invent anything.

There are plenty of opportunities ready to grab already.”

His own biggest mistake, he admits, was to have invested in a takeover of Newcastle’s Lady in Leisure. “I lost £1,040,000 on that. I put £1,040,000 in and it went bankrupt. Don’t forget the £40,000...”

Many magnates give money to charity, but they are less generous with their time. One highlight of Bannatyne’s diary recently - “it was really exciting,” he says - was revisiting, with his wife, Casa Bannatyne hospice in Romania.

Over more than a decade, he has given millions to charity, notably children's projects as far off as Cambodia and Malawi. But Romania is special. “We had taken 10 children out of a horrible Romanian hospital,” he recalls, “and opened Casa Bannatyne for them. They were all HIV positive and had all been abandoned.”

Now one of those first residents, Adela, is 19 and was getting married. Duncan and his wife Joanne, 40, were invited to the wedding at Tirgu Mures, where three homes form a complex for 25 residents.

Scottish International Relief had opened one home before Duncan. Another for five residents, badly handicapped, was developed

by Coco, the charity founded by the North East’s former Olympic athlete Steve Cram, which has raised over £1.3m to fight Third World suffering.

Bannatyne set up his own eponymous foundation with a personal input of £1m last year. He gives away a lot of his fortune around £75,000 a year through Bannatyne Fitness alone - because, he says, he doesn't know what else to do with it.

“I had floated my company on the stock exchange in 1992 and had huge dividends and salaries coming in; too much. I got begging letters and was particularly intrigued by one.”

That letter was from Bob Shields, the Tyneside police officer running aid convoys to Romania.

Bannatyne went out to the country with him, and the involvement grew. He’s is no soft

ENTREPRENEUR

touch, though - he studies supplicants for his charity cash very thoroughly.

“I look at what they suggest and at how the money is spent. I look at the organisation. I check records at Companies House,” he says, adding that he looks for low administrative overheads, among other things.

He also succours seriously ill British children, about 200 of whom in England have been in hospital for three months or more - some of them for years, some of them for longer than they have spent at home in their short lives.

The Wellchild charity funds visiting nurses at £150,000 each.

“This project saves the Government money.

I fund a nurse, and children who’d otherwise have to be in hospital can stay at home because the nurse comes to visit,” he explains.

Various charities he helps have logos on his website, as do companies developing through Dragon’s Den, and in which Duncan invests.

Has giving softened his earlier view of himself as “driven, relentless and arrogant”?

“No,” he replies. “I’m just the same.”

What about faith, then? He said in one book he was a non-practising Christian until he was 20, became an atheist, but recently had felt a presence with God; though he wasn’t ready for total allegiance to Christianity.

Has philanthropy, which brought him an OBE, sealed the allegiance yet? “I’m still in the same frame of mind. It runs parallel with me I suppose.”

He enjoys two personal indulgences - his Maserati Gran Turismo with personalised plates and his £3m Cannes villa. “It takes about £60,000 a year for its upkeep and staff, but it’s worth it. I hate going to France and having to hire a car. I go over and the driver picks us up at the airport, takes us to the villa.

Things like that are just so luxurious.” No mention of the cosmetic surgery, though. At his five-bedroom home in Wynyard, he can be perfectly happy lazing in front of the television. He’s not sure how things would have worked out without his own TV appearances.

“It just sort of happened. I became part of it.

I think it helps in getting your name known.

I was going down the acting road. I’d been for auditions. Then Dragon’s Den came along, so I gave up the acting idea. It’s okay.” ■

21

Better late than never Two of Bannatyne’s proudest possessions are his honorary doctorates from the Universities of Teesside and Glasgow Caledonian.“I left school at 15 – no college, no university, nothing,” he says.

“Being recognised now is fantastic.”

His family had little money, and he attributes his determination to his father, though even he once told him: “People like us don’t start businesses.”

His father worked in the world’s biggest factory, built by the American Singer sewing machine company in 1885 to employ 16,000 people. If you were from Clydebank and didn’t work there or in the shipyards, chances were you didn’t work at all. When Bannatyne was 14, the factory’s 26ft diameter clock face, also the largest of its kind in the world, was removed. By 1980, the entire factory had closed.

By then, however, he had long gone, initially into the Navy. He was dishonourably discharged with nine months’ detention after threatening an officer. He was later briefly jailed in Glasgow’s HMP Barlinnie for disturbing the peace and then drifted through jobs, for some years in Jersey as a deckchair attendant and a barman. At 29, he and Gail, his first wife and mother of four of his children, moved to her home town of Stockton. He bought an ice-cream van for £450, which then became a fleet and later sold for £25,000.

On learning Mrs Thatcher would subsidise care homes to the tune of £260 per patient per week, he built one such home in 1986.

It became a business of 36. Thatcherite subsidies also part-financed his nurseries.

He loved Mrs Thatcher’s policies.

Determined not to retire - “that means giving up,” he says - he thinks Britain today would be wealthier, with more jobs, if more of us set up in business.

BUSINESS QUARTER | SUMMER 09

COMMERCIAL PROPERTY

SUMMER 09

It’s going to be a few years yet before recovery in commercial property, but it’s not all gloom; the last quarter yielding awards for new builds and the launch of striking new developments >> Building recovery It may be 2012 before the green shoots of recovery show in commercial property, reports show.

PricewaterhouseCoopers reports that construction firms have been folding at a rate of eight a day, and while housing schemes may recover slowly from 2010/2011, by then they will have fallen by 50% since 2007, property consultant GVA Grimley predicts.

One bright spot may be Newcastle, where pent-up demand has been outstripping supply, but otherwise, demand for office, retail and industrial space could fall sharply over the next three years as projects are postponed, and the fall in orders will feed through to output this year.

Meanwhile, the number of public and private construction schemes is forecast to be evenly divided by 2010, against the present one-third public, two-thirds private.

GVA Grimley forecasts an overall decline in output of 14% on 2007 levels.

Nationally, public non-housing could raise output by 47% between 2007 and 2010. Half will be in the education sector, with the health sector and construction for the Olympics prominent also.

But hopes that road and rail projects will also perk up the construction industry are likely to be met with disbelief in the building and civil engineering sector.

In retail, rents could drop by almost 20% between now and the end of 2010, says property consultancy Colliers CRE, and by the end of this year alone, rents across the UK’s high streets and shopping centres will be expected to have dropped by about 11%.

Overall average rental values could drop by 9% in 2010 and 1.3% in 2011, only returning to growth in 2012. That will press even harder on retail property owners, already struggling with a slump that has wiped out almost half the value of their assets, according to the Financial Times.

On a brighter note, the Business Centre Association (BCA) suggests demand will grow from now for serviced offices and managed workspace.

>> Rock’s millstone taken up Newcastle City Council is buying troubled Northern Rock’s new and unused tower block at its Gosforth headquarters site.

The bank’s other new headquarters at Rainton Park, near Sunderland, has been taken up by Npower, in a relocation from Carliol House in Newcastle.

Both buildings became available following a cutback in Rock jobs from 6,000 to 4,000.

The round tower at Gosforth will be shared by the council and support services firm Eaga, and Eaga is expected to create 300 more jobs as well as switching 400 existing posts there from Watermark, Gateshead.

The council is reported to be borrowing around £22m to acquire the building for

BUSINESS QUARTER | SUMMER 09

leaseback to Eaga, which will then make its new headquarters there, and the building will also take in 200 council employees relocated from the Civic Centre and Scottish Life House in Newcastle.

An unused rail route, if it is re-opened, could transport many of the 6,000 workers soon to be employed at Rainton.

The old Leamside line runs beside the £100m business park and Sunderland councillor Colin Wakefield is among campaigners fighting for a restoration of the line which would also provide an alternative route between Newcastle and Middlesbrough.

>> More space at Cobalt Five new buildings have been completed speculatively at Cobalt Business Park in North Tyneside - presently the largest office development in the UK.

22

The five sites offer 330,00sq ft and could accommodate up to 1,600 workers.

Cobalt is already home to Orange, Procter & Gamble, Newcastle Building Society, G4S, EDS and Formica, as well as, LS Trillium, Ramsey Health Care, North Tyneside Council and Northumbria Health Care Trust.

On completion, the Highbridge Properties development could become the largest office park in Europe.

Going up: Students see how England’s biggest office development is taking shape

>> Building experience Hundreds of North East students went on site at England’s biggest office development to pick up first-hand construction skills.

The 400 construction technology students from Northumbria University’s School of the Built Environment have been spending time with the workforce building Quorum, the £180m complex that will accommodate up to 12,000 workers on North Tyneside.

>> £25m portfolio partnership A partnership in regeneration carrying a value of £25m has been launched between One North East and property investor and developer Langtree.

One North East has switched its development land portfolio into the new company, Onsite North East, which now has to manage and invest in the sites, speed their development and spark new property activity in the region. continued on page 24

Tanfield Lea

Business Centre inspiring business space

Durham’s New £6.8m Office Development

Now Open To be inspired call (01207) 218219 e-mail: andrea.mcguigan@durham.gov.uk web: www.tanfieldleabusinesscentre.com

COMMERCIAL PROPERTY The portfolio of 23 sites covers more than 1,000 acres, ranging in size from one to 130 acres. The sites are spread around the region, from Berwick in the north to Redcar in the south.

Key sites such as Newburn Riverside and East Quayside, both in Newcastle, Ashwood Business Park in Ashington, Meadowfield in Durham and Queens Meadow in Hartlepool are included.

Workspace, warehousing and offices feature mainly, but there are also sites with potential for leisure, retail and residential use.

>> Top team The 80-strong national office agency team of property consultants DTZ has been named Property Week’s Office Agency Team of the Year, with a 38% contribution in deals from Newcastle.

>> Building for the future Logistics firm AV Dawson is buying property to cushion the impact of the economic downturn.

The Middlesbrough firm, already Riverside Park’s largest independent landowner, has added the Bowes Road Industrial Estate, the former Newbould’s pie factory on Startforth Road, and has agreed terms on 3.5 acres of playing field on Forty Foot Road.

MD Gary Dawson says the various purchases will provide a office, warehouse and industrial developments likely to be in demand as the economy picks up.

>> The Jury’s in A £20m, five-storey Jurys Inn Hotel has got the go-ahead to be built near BALTIC on Gateshead quayside. It will create 100 jobs.

>> Marine firm flows Techflow Marine, which designs and supplies equipment to the offshore energy industry, has moved its headquarters within Cramlington, from Apex Business Park to Berrymoor Court at Northumberland

BUSINESS QUARTER | SUMMER 09

SUMMER 09

Business Park. It now exports to all continents and is focusing on West Africa and South America.

It also plans to increase its engineering workforce from 16 to 25.

The four-year-old company is headed by directors Jim Straker and Ian Craig. GVA Grimley acted for developer Gladman Developments in the let.

>> Pullman made over A £500,000 upgrade which includes a function room for up to 400 guests is under way at the Pullman Lodge hotel in Seaburn.

Owner Wylam Leisure is also having a second-floor bar put in to overlook the main room and give sea views.

A new fish restaurant has also opened there, called Lowry’s after the famous matchstick-figure painter who spent a good deal of time in the area.

>> Chinatown turns trumps Aspers casino in Newcastle has celebrated links to the Chinese community by giving £10,000 towards floodlighting for the landmark ceremonial arch marking the entrance to Stowell Street, the city’s Chinatown.

The 11-metre arch, designed by Yonglai Zhang, and made by 12 craftsmen in China’s Jiangsu province, is guarded by two stone lions donated by Aspers in 2005.

>> Award for college A £6.5m North East sixth form centre has won the Best Educational Building award at the Building Excellence Awards 2009.

St Peter’s Sixth Form College, part of City of Sunderland College, scored with its innovative use of light and space.

It won the Wearside award at Sunderland City Council’s annual ceremony and has gone on to compete against other regional winners in the North East finals.

The new building opened to students last September. It’s on the north bank of the River Wear, beside Sunderland University’s Tom Cowie Campus at St Peter’s. The building is designed around a three-storey central atrium and The Wear provides the view from the refectory.

Designed by architects Browne Smith and Baker and built by Kier Northern, the building, includes a heat recovery system to re-distribute heat.

St Peter’s was also shortlisted in the Royal Institution of Chartered Surveyors (RICS) Renaissance Awards 2009 - for the Community Benefit category in the North East region.

24

New site: New office developments on the market at Bowesfield, Stockton

>> More offices for Stockton The final two office accommodations at a mixed-use scheme in Stockton have been made available. The Bowesfield site at Stockton, a venture by property firm Banks Developments, has already proved popular with a range of professional service firms over the last two years.

The new neighbouring three-storey offices of 7,500 and 10,000sq ft are on the market.

BHP Law, Archers Law, Handelsbanken, Audi, Lexus, Toyota , and Alliance & Leicester are already there, while housing has also been developed by Barratt Homes, David Barlow Homes and McInerney Homes.

The development close to Stockton centre comprises a 30-acre business park, more than 11 acres of homes, and a 37-acre nature reserve on the banks of the Tees.

SUMMER 09

COMMERCIAL PROPERTY

return to the now refurbished offices in South Street on the back of client growth and rising demand for space.

The firm comprises eight staff and three partners and David Coulson, who is also regional policy spokesman on rural affairs for the Royal Institution of Chartered Surveyors, said: “Broadley and Coulson covers both the residential and commercial sectors. It acts as auctioneer, land agent, chartered surveyor, estate agent and valuer and will shortly launch a new website.”

Back home: David Coulson at the new, old, Broadley and Coulson office

>> Where it all began

promoted worldwide by the Carillion Arlington Real Estate partnership.

Business space runs to 440,000sq ft, a hotel and 376 homes are projected and the complex could accommodate up to 2,800 jobs.

>> Mind the gap UK Land Estates has razed the former Huwoods factory at Team Valley Trading Estate in Gateshead rather than pay £186,000 in property tax on the vacant building. It leaves a gap the size of two soccer pitches.

>> Global drive for Durham Gate

Rural property agent Broadley and Coulson has returned to the premises in Crook that it first occupied when the business began in 1917.

Senior partner David Coulson decided to

>> Signs of the times

The £200m Durham Gate mixed development at Spennymoor, developed on 60 acres at Black and Decker to offset the rundown of jobs there and at other manufacturing firms in the area, is being

The Redforrest Group, which includes Astley Signs, has relocated to Team Valley, Gateshead. continued on page 26

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BUSINESS QUARTER | SUMMER 09

COMMERCIAL PROPERTY

SUMMER 09

It has bought two units and leased another at Queen’s Court; Buildings for Business’s mixed office and industrial development which was formerly a Dunlop factory.

>> Top-floor take-up International engineer and builder Balfour Beatty is taking the entire 10,000sq ft top floor of a major new building in Newcastle.

It’s a 10-year success story in letting for the Mandale Group, owner of the 10-storey West One building that occupies a reviving area overlooking the Tyne at Forth Banks, behind the Central Station.

West One was Newcastle’s only centrally located new office space completed in 2008. Stockton-based Mandale, with 91 staff, has a turnover now of more than £76m.

Exchange: (l to r) Jane Stonehouse, associate director GVA Grimley, Adam Richardson, development manager Priority Sites, Pat Ritchie, North East regional director Homes and Communities Agency, Bill Skilki, chief executive Priority Sites, Tony Wordsworth, director GVA Grimley, at Media Exchange

>> Digital City moves ahead

>> Exchange launched

Teesside’s Digital City is moving ahead following the opening of Boho One, a £10m digital enterprise centre that’s the core of a Boho Zone between Middlesbrough town centre and Middlehaven.

The first of three buildings completed, it is already 70% let to targeted industries.

Eventually, 27 businesses bringing 283 jobs are envisaged there.

The Boho Zone is headquarters for the project’s business driver Digital City Business.

This complements the wider Digital City initiative taking in the Institute of Digital Innovation and the Centre for Creative Technologies, a £21m development on Teesside University’s campus.

New buildings and refurbished Victorian ones form the Boho complex where digital media, digital technologies and creative companies will work together.

Media Exchange, a £5.2m speculative office development in Newcastle’s Ouseburn Valley, is set to attract cultural and creative firms.

The 83 people likely to work there will enjoy views over Byker Bridge and the valley towards the Tyne.

Three buildings there each have three office suites for lease or purchase. They range from 2,077sq ft to 8,023sq ft - giving in total 23,668ft.

Priority Sites, with Newcastle City Council and heritage body The Ouseburn Trust, has developed the Grade A office space at Upper Steenbergs Yard.

The exchange has Japanese-style facades and meets the ‘Very Good’ BREEAM standard for sustainability, which means lower running costs for tenants. The design combines the traditional styles of the Ouseburn Valley with contemporary finishes.

Tony Wordsworth, director of GVA Grimley, which is marketing the suites, said they were perfect for purpose in an historic part of the city.

Priority Sites is a joint venture of the Homes and Communities Agency and Royal Bank of Scotland.

Three art works - a cycle Art tour: The corral, bespoke wood commissioned art engravings printed on works at Media enamelled plaques Exchange and glass canopies feature outside.

>> Transformations The site of the abandoned Bates Colliery at Blyth is to be developed by Renewable Energy Systems as a 100MW biomass power plant creating 300 jobs.

BUSINESS QUARTER | SUMMER 09

26

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Support to help your business succeed and grow.

BQ magazine, in its short but exciting existence, has been embraced by its readers as a major and respected voice in the North East business community.

A leading independent commentator, it is now pleased to announce the launch of BQlive In a regular series of live and far-reaching debates, to be held regularly across the region, we are inviting informed and lively discussion to take regional strategy forward. It will involve people keen to see the North East prosper and achieve its potential in playing its full role - both in advancing the nation’s economy and in making the region an even more rewarding place to be doing business.

We are seeking the views of people who feel they have a contribution to make on the burning issues that will be raised. To that end, we want you to keep September 17 free in your diary for reasons we explain below. But first we want you to consider the following: “What are the big priorities for the North East business community, to ensure we sustain the momentum generated over the last decade?”

To set the ball rolling for our first BQlive debate, we asked 11 notable personalities to help spark your opinions by giving their views on the topic. The following is the result of their round-table discussion.

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The participants: Alastair MacColl, chief executive, Business & Enterprise North East David Bowles, chairman of Entrust and Northern Defence Industries Brian Manning, chief executive, Esh Group Geoff Ford, chairman, Ford Components Jonathan Blackie, regional director, Government Office for the North East Marion Bernard, chief executive, NorthStar Equity Investors Peter Arnold, chief executive, Science City Mike Mullaney, director, large corporate, Lloyds TSB Mark Simpson, director, Nigel Wright Recruitment Paul Woolston, senior partner, Pricewaterhouse Coopers Stephen McNicol, senior partner, Muckle LLP. Chairman of the round-the-table discussion at Malmaison Hotel in Newcastle was Caroline Theobald, managing director, Bridge Club Ltd. Each participant was asked to suggest three ways of ensuring the North East’s momentum was sustained. Over 90 minutes the following points were made:

Bolstering the economy Jonathan Blackie says a lot will depend on exploiting opportunities in renewables. He explains: “Licences are big issues for the East Coast. It is like oil was. There is a potential of 25,000 jobs involved. We have to make the most of it, for there is no guarantee it will just come here.”

Peter Arnold says the region must take

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advantage of public sector money in new enterprises and make it go further. “We also have important challenges: to get more money into these sectors. The country can’t carry on at the level it has been with tax receipts obviously coming down.

“But with so much business support being provided for the public sector, there must be changes in the present structure. Science City in Newcastle is trying to create science with new jobs. Money we have raised will go into private enterprise.”

Alastair MacColl says Business Link has been working with 34,500 businesses to transform support and make it easier for businesses to access. “We are trying also to grow skills and make the North East a real magnet for talent.

“In the Great North Revolution that’s being talked about, how do we ensure a strong manufacturing base is maintained, but at the same time focus on emerging industries? The situation at Corus warns us some other industries are going to have a tough time.”

Paul Woolston believes the region must be more confident. In the FTSE-350, he says, only seven out of 27 North companies are from the North East. “We need to feel good about the region. The public sector has a role too.

“We must concentrate on what value the gross domestic product can create in terms of schools, hospitals and projects like the new Tyne Crossing. We must concentrate on value. There must be more strategic thinking for the region, both by the public and the private sector.

“We recall the airport controversy when the regional development agency questioned whether Newcastle should become the region’s sole passenger airport, with Durham Tees Valley concentrating on freight traffic.

“If we had done what had been considered, we might by now have had regular scheduled flights between the North East and New York.

That would have said something about the people here. And why do we have five business schools in the region, not just one?

Some things we can do.”

He sees major assets in the region’s law firms and those working for them. The big four accountancy firms are represented. He added: “Competition within the region is good and we need more of it.”

David Bowles feels everyone should have remained focused on the principle of one major passenger airport. “That might still happen.”

Brian Manning: “Too many people in the North East are employed in the public sector.

And in procurement, without being protectionist, we should be making much greater use of local goods and services to build up companies we already have here.”

Geoff Ford says many companies are feeling the pinch with no apparent signs of recovery yet, and it is important, particularly where jobs have to be shed, that more is done to avoid the risk of losing valuable skills permanently.

“Our region has unique economic features.

We must exploit these, do our own thing. If we wait for government help at present we’ll wither on the vine.”

He agrees with Brian Manning: “We must encourage more trading within the region.

Local trading is cost effective, saving in costs and delivery times. We badly need a regional database. If you can’t find what you want locally, you log on to the database and find somewhere in the North East. If what you are after is still not available, you can then go outside the region.”

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DEBATE

Alastair MacColl: “We are working on that.”

Geoff Ford: “Businesses also need more advice and support going into the future. We are being advised to consider the shape of North East business 100 years from now. We probably already have many of the skills that will be necessary for whatever lies that far ahead, but we need more support to that end now.

“The Government seems to think manufacturing should be dead and buried.

That isn’t the case, certainly on South Tyneside, which still depends heavily on manufacturing, and where many manufacturing start-ups are still evident. What about help for them to face the future?”

Mike Mullaney, as a banker, is impressed by the creativity of many managements in the region, especially when big cost cuts are having to be made.

“It is being done not arbitrarily, but in many cases through consultation with employees and union representatives, and with a variety of measures aimed at retaining skills wherever possible.

“Brilliant things are happening before our eyes. Unlike some other parts of the country, we don’t panic. Disaster in the South is a minor irritation here.”

He believes the North East needs greater promotion. “We have seen 17 or 18 years of very good business conducted here, yet the region is still not on the radar. We don’t promote the region enough.”

Business, he says, should seize the opportunities offered by the 2012 Olympic Games in London and the 2014 Commonwealth Games in Glasgow.

Marion Bernard says a point she continually stresses in considering concepts and start-ups >>

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DEBATE

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is that things have to be commercially viable.

“I think it is sound policy to build on what we have already achieved in recent times. I am particularly impressed by our progress in science and technology. We should try to do even more new things here. I feel we should have global ambition, always seeing if we can export more.

“We should also try to attract new skills into the region, and should be developing the infrastructure - such as appropriate housing and transport to attract people here.”

David Bowles sees virtue in “reverse globalisation”. He explains: “In the early 1980s, about 186,000 jobs were lost from coalmines, steelmaking and shipbuilding in our region. To counter that, we had to try to get inward investment. But globally mobile investment is always globally mobile.

“John Bridge, when he was at One North East, often observed: ‘You have to try to do something about that’. And he’s still right. At Northern Defence Industries, firms work together to share resource. It is something of a reversal of globalisation.

“We establish what the business model looks like and work out how to get small companies working in a collaborative network. In terms of persuading banks to give support, it can offer a better risk than single big companies making an approach.”

Steve McNichol suggests that in any Great North Revolution there would be an opportunity in a very short time to develop North East businesses that are truly worldclass. “It is vital to back the right horses. There are some big chances and big decisions have to be made. The only way is to get the region to talk and work together.”

To that end, he adds, someone or something

BUSINESS QUARTER | SUMMER 09

has to be a catalyst - “not a committee, but someone who can drive the region.”

Instilling the work ethic Steve McNichol perceives that many firms are frustrated in their searches for mature recruits.

“Many job applicants are very bright but lack the work ethic. The eco-climate now may not be a bad thing if it changes that kind of thinking.”

Mark Simpson, observes that in terms of skills, the North East has seen two outstanding companies: Nissan and Viasystems. “Nissan’s development of a local skills base prompts the question: Can we develop other local skills bases like that?

“Nissan brought in new ways of thinking. It has instilled a strong work ethic. Its production workers have to be very fit to do the work they do, and they have to work hard.

“Viasystems had some truly brilliant engineers.

That was 10 years ago. It’s all gone now hundreds of bright people. How can we now attract similar skills to the region?

“Also, there’s resistance among small and medium-size businesses to accept mentoring.

It seems to appear to be a big step to them.

But why? They should not hesitate at such an opportunity.”

Marion Bernard feels employers should not try to hang on to employees determined to move out of the region. They can always come back, she points out.

“There’s a campaign to persuade graduates to stay in the North East, but if they wish to go to London or elsewhere to discover more about their field, we should let them, and meanwhile build our businesses to make sure they want to come back and share what they have learned while they were away.”

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Sharpening young people for work Brian Manning says that in preparing young people for careers, too much money goes into 14 to 19-year-olds. “That’s too late. We need to prepare them younger, at primary level even. We should be helping 10-year-olds upwards to form their attitudes.

“At 14, many have probably already made a decision which may not be the best one for them. In too many schools you find the word ‘work’ lacking in the vocabulary. Many children don’t get enough experience of what work is about in their school life.”

David Bowles: “We need to invest now to persuade young people to get interested and realise the importance of working in some kind of job in industry – particularly in manufacturing – through the Young Engineers programmes or things like that. It is crucial - if we don’t we won’t have a workforce competent 15 years from now, let alone in 100 years.”

Peter Arnold: “We’ve been finding out what businesses around the world will need in the future. It is difficult to predict. Take a high-tech area like stem cells. It’s difficult to know where that might be at any point in the future and what jobs might come from that.

“If you look at what has been discovered during the past five years, only about 3% of what is known today was known then.

Businesses do have to do forecasting, but it may be more emotional than cerebral to kids.

“Nissan’s way is more about letting kids see what they can do now, how they would fit in.

In Science City, we’ve been trying to target kids of 10 to 14 and it’s difficult to get them to see science as anything but white coats and goggles. Can they connect with people like

SUMMER 09

this and what they’re doing? It’s a real challenge. Usually, it’s footballers and film stars they want to be like.”

Brian Manning: “Newcastle United is an interesting comparison. They’ve bought in experienced players then paid them lots.

Would the money have been better invested in developing youth? It can often be better to develop youth and invest for returns in 10 or 15 years’ time.

“We tend to have sticking plaster solutions today, when the industry we know today may be irrelevant in 10 to 15 years’ time.”

Alastair MacColl: “If you could get government at all levels, industry and education to engage together on some of those bigger issues you might go some way to answering those questions. I am not sure business is all that good in engaging in that way.”

Jonathan Blackie: “Perhaps a mistake we make is in having complicated arrangements around regional structures, hard to sustain.

What seems to work well is when Esh Group teams up skilfully with local schools along the road and offers careers in construction.

“It’s all about a sure job if you display certain characteristics, such as actually turning up for work. Turn up, work hard, recognise you’re the junior member of a team and there’s a lot to learn. Again, keep it simple, not some complicated regional initiatives.

“I think it’s also about Science City having a strong programme for young people as well as the lab coats. If you run a really good schools programme you can demystify things, make science fun. The Centre for Life in Newcastle makes learning fun.

“If you’re really up for the challenge, do what Paul Callaghan in Sunderland is doing. His

Leighton Group is sponsoring a new school in Sunderland, at Red House Farm, reckoned to be one of the poorest estates in England.

“When you talk about making that school relevant to people who live around there, it’s something quite inspiring. There are also simpler things you can do.”

Paul Woolston: “It’s largely down to head teachers. If they are supportive, there will be progression, if not, it will be dead in the water.

“A bus-load of 16-year-olds, who with luck might get five Cs at O-Level, visited our office.

Our objective was simply to raise their aspirations. They were from South Shields, yet for 12 of them it was the first time they had been to Newcastle.

“When you talk about raising aspirations, you’ve got to understand where you may be coming from. Particularly worrying, is how often young people find it hard to mingle with adults.”

Geoff Ford: “Teachers need to be focused on preparing young people for a job. One lad came to us for an interview wearing shorts.

When it was pointed out his dress might not be appropriate, he said, ‘oh, I was on my way to the beach’. For that, I wouldn’t hang the kid; I’d hang the teacher who didn’t prepare the lad for his meeting.”

Mark Simpson: “Surely that’s the parents’ responsibility. There’s a generation of parents, many of whom are not instilling the right things in their children. From the age of seven onwards, it may be too late for others to start trying to guide them. Can we do something about the parents?”

Stephen McNicol: “There has to be pride at all levels. Children have to be given a chance.

Parents have to understand what the opportunities are. Teachers must be

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DEBATE

inspirational and focused on what young people’s goals and abilities truly are. The region has to be attractive to people. We need to work really hard at doing that.”

Another challenge, Mark Simpson believes, and was strongly supported, is how to get investment to transform regional behaviour in family life.

Alastair MacColl: “We have to consider many families in this region who are seeing three generations of unemployment. How do you persuade children in that situation that if they stick in at school there’ll be something for them? This is about having a clear sense of what the opportunities are. We are trying to find a way to build upon that.”

Mike Mullaney: “If we ask young people to name their hero, how many would mention a business boss?”

Brian Manning: “Some might look up to Sir Alan Sugar. TV like The Apprentice and Dragon’s Den have been fantastic for raising people’s aspirations.”

Marion Bernard: “There are perceptions to change. We must persuade younger people that quality of life is important. It’s often assumed here also that we work less than in London. We have to explain that we work just as hard and effectively here.”

Paul Woolston: “These are parts of endless cycles we must try to break. “

Getting known David Bowles: “We have many bright ideas here, but are also introspective. We’re not seeking enough ideas and enough views about ourselves from the rest of the world.

And if big ideas aren’t coming out of the region, let’s find out where they are and try to make them work here.” >>

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DEBATE

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Peter Arnold: “We need to be trying to connect scientists and innovators with industry that might come here. We need to be trying to connect with inward investors or people who might want to come in with us later.”

David Bowles: “We assume the rest of the world knows where the North East is. We think because there’s a Newcastle United everyone knows where Newcastle is. But many people in Seoul and Silicon Valley have no idea. They don’t see the world in black and white stripes.”

Mike Mullaney: “Do we explore enough why we are not successful at times?”

Need for strategy David Bowles: “For 25 years, the North East has been uniquely successful in providing strategic initiatives to the region’s economic cause. Around the world, the same sort of stuff has happened – the United States in the days of the Tennessee Valley Project, and the regeneration of Baltimore.

“These have provided instances where individuals have emerged to provide leadership. In the North East, Sir John Hall epitomised it, but it didn’t last long. Others have aspired - Dr John Bridge. People can provide that sort of leadership.”

Alastair MacColl: “We need an approach, a strategy, a plan – one of them, not 20 of them but one we can all share.”

David Bowles says regional strategy and strategic leadership are vital. “I and others have recently been visited by a number of national politicians and others who see no real need for regional development agencies as they are now.

“And they think local authorities should be kept away from matters of economic and

BUSINESS QUARTER | SUMMER 09

business development. But we need strategic leadership, even if it’s not in a regional development agency as such. It will always be important in a small region to have public and private cultures working together. We shouldn’t let politicians ride roughshod over a good model that works well here.”

Jonathan Blackie: “Ten years ago, we were the country’s worst-performing region. We put up the worst scenario, saying we needed government help. That’s all changed. We’re no longer a basket case. It’s all about assets.

“We have transformed more than most places in Europe and have good iconic stuff. We’ve transformed universities. We have devices to lure academics to contribute to business.

“Recession brings uncertainty. But we are working on electric vehicles, plastics, electronics and renewables. Think of the change. Even in situations like that at Corus - profoundly disturbing where thousands of jobs are threatened – there’s talk of a long-term plan.

“Tees Valley has great engineering. It’s looking at regeneration, renewables, and its process industries are modern. On top of this, we have culture to be proud of.”

Geoff Ford: “People have to be at the heart of it all. We must fix on what people can contribute.”

Alastair MacColl: “We have to ask now whether young people will buy our plans or our leaders?”

Paul Woolston: “Two outstanding leaders in the North East have been Trevor Mann at Nissan and Paul Walker at Sage.

They are understated and modest, but highly effective.”

David Bowles: “To get people to come back to the region, you must have companies that

32

are growing and new young companies like those in which Marion’s company is investing.”

Peter Arnold: “In scientific areas we are competitive. In go-ahead places like Singapore and Boston, there is a sense of leadership, whether it’s through small groups or through certain individuals.”

Alastair MacColl: “A great advantage of our region is that it is easy to get round. Usually, it takes a year to get to know the key players of a region. I found on Teesside that it took me half that.”

Weaknesses of organisation Brian Manning: “I feel in some ways there are too many organisations pursuing strategies and trying to achieve the same thing.

Strategies in the end become diluted.

“I’d like simplification in the number of organisations. Money some get is largely used to pay salaries within. It’s all self-sustaining.

The strategies are probably correct, but far too diluted. The region needs to attack that, cut it down.”

Mark Simpson: “Often, they try to support too many things. A good company doesn’t have too many aims and try to do everything in one go. It is too easy to include too many people then lose sight of the goal. How you do it is what matters.”

Brian Manning: “My experience of support bodies is that if I ran a business like them I’d soon be out of business.”

Alastair MacColl: “I guess I’ve got to exercise a bit of caution in what I say here since we are involved with so many organisations. But on business support there is a process of simplification going on, a process of trying to get, believe it or not, about 3,000 government schemes down to about 30 by next year.”

Brian Manning: “The public sector needs to take a good look at itself. Too much time is spent bidding for funding. Why not all work from one big pot? They must spend 50% of their time looking at how to go about it.”

Jonathan Blackie: “I think everyone understands the public spending scenario can be very tough. Local authorities recognise they are going to have to take a lot of factors into consideration ahead of a perfect storm. One local authority alone is taking out 550 posts,

SUMMER 09

and I think other authorities know there’s a cliff edge coming.

“The Government has told local government to get out of economic development and leave things to the regional development agency. Local authorities are there to create what’s called a local business environment.

So their planning should be excellent, their infrastructure good, but don’t get into grants and services. Leave it to business operations.

“But that’s proving difficult to get across.

Local politicians often feel passionate about providing support to hardpressed communities.”

Alastair MacColl: “These things have been happening for many years. They will be resolved with application and change. I think some of that is going on, certainly in some of the areas that we are responsible for.

“But I also think the business community has a big role to play. I think business has to be part of the plan we are talking about to ensure a proper approach, and an accountability. It’s about working away at it.”

David Bowles: “Take the Northern Business Forum, which some of us are involved in, Often, the Association of North East Councils comes to the table with some sort of project, maybe a design strategy. It’s always driven by the public sector, all the intellectual thinking which has gone in up to this stage. Belatedly, they say to us: ‘We want you to do this’.

“It happens in other organisations, too. There never seems to be an inclination to reach for the private sector and engage it at the front end. They want to tick a box saying they have consulted. It seems to me we have to change that. The business community has to stick its head above the parapet and say: ‘This is how to make the thing work’.”

Brian Manning: “They want engagement.”

Geoff Ford: “Central government is now promoting the private sector as the lead sector, probably because the public sector is running out of money. The regional employment group is pushing for employers to take the lead over unemployment in the region.”

David Bowles: “Business communities must be in the driving seat, just as in every other successful economy - even China’s.” n

DEBATE

A world class future is the collective aim of the North East England business community comments Alastair MacColl In these challenging times, the work that we undertake at Business & Enterprise North East is overwhelmingly focused on the essential task of providing immediate, relevant support for businesses. However, as a region, we are planning also for the longer term, to continue developing a business environment and a support structure now that will allow the North East to maintain progress once the upturn arrives.

As chief executive, it is my responsibility to make sure that the services we operate, meet the region’s longer term objectives. And the steps we take to achieve those objectives are the right ones. We must continue to work closely with the whole business community across the region - listening, understanding and responding.

Events such as the BQ Live debate are very welcome. They provide an excellent platform to discuss the key issues that we all need to address. This first debate convinced me that these events are going to be invaluable. It was honest, stimulating and covered some major themes.

There was broad consensus that this region has made enormous progress over the last decade.

But to maintain that momentum we have to improve our skills base, developing the talent that we undoubtedly have here and attract it from elsewhere. The North East has a long and proud manufacturing heritage and everyone agreed that this should remain a fundamental part of the business mix here, but with emerging industries increasingly coming to the fore. Engaging more effectively with young people was also identified as crucial, giving them the inspiration and the tools to get into work and pursue their own business ideas.

So there are some weighty issues that we have to prioritise, but I believe that more than ever the North East has the infrastructure and the collective will to do so. Business & Enterprise North East is at the heart of that process and we will continue to lead the drive that will, one day, see North East England recognised as a world class business location.

The meeting’s main conclusion was: “Business should be put at the heart of shaping the map to take the region forward.”

Remember, this is only the start of the issue, because now we want you to express your views in person and make your contribution towards our regional strategy in the difficult times we continue to face.

Through our two events per quarter, sparking debate, discussion and feedback on a range of key business topics and issues, we aim to drive good, common sense thinking forward, and have it taken up at national, regional and local levels.

If you believe, like us, that now is the right time for a groundswell of sound thinking about our region’s fortunes, then ask us now to reserve you a place for round two of the first BQ Live debate.

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Date: Thursday September 17, 2009 Venue: Bishops Suite, Ramside Hall Hotel, Durham Time: 6pm for 6.30pm In the chair: David Bowles, chairman of Entrust and Northern Defence Industries, and Brian Manning, chief executive of Esh Group Ticket price: £20 includes refreshments and canapés For information and tickets, please contact Bridge Club, tel 0191 230 5742, www.bqlive.eventbrite.com

BUSINESS QUARTER | SUMMER 09

COMPANY PROFILE

SUMMER 09

A Peterlee firm is set to increase its turnover by a third and create 12 new jobs, thanks to support from RMT Accountants and Business Advisors

RMT HELPS NORTH EAST COMPANY PROPEL BUSINESS GROWTH

P

ROPELLER GB was established in 2001 by Tony Goodwin and Carl Brookes to help industrial firms improve their business efficiency, identify cost reductions and consolidate supply chains. To support its growth, RMT helped Propeller GB conduct a strategic review of the business and raise £100,000 of finance from the Transitional Loan Fund, delivered

by Entrust, and a further £100,000 from the Royal Bank of Scotland (RBS).

Martin Stephenson, corporate finance director at RMT, said: “Propeller is skilled in assisting with business planning and implementation, helping to improve processes and increase overall profitability – as well as, more importantly, putting systems in place to monitor business progress and adjust plans early. Propeller has moved into higher value industries, confident it has the skills in place to cope the additional turnover that will result from its growth.

“The corporate finance team at RMT continually helps Propeller to conduct strategic reviews, update its business plans and ensure it is in a position to apply for funding. It is great to work with such a professional, forward thinking organisation.”

The funding was used by Propeller GB to support its growth and also develop two new innovative products. The Pro-Pod uses radio frequency identification technology to trace and locate electronically tagged items so they can be located quickly and easily in maintenance stores areas and large warehouses. Propeller GB is also set to launch the Pro-Vyda, which acts as a large vending machine holding smaller components that are individually tracked, both to provide the individual parts quickly and monitor their amounts for ordering.

Tony Goodwin, managing director of Propeller GB, said: “RMT and RBS have provided us with

BUSINESS QUARTER | SUMMER 09

Martin Stephenson (Corporate Finance Director) RMT Accountants and Business Advisors

PROPELLER IS A FINE EXAMPLE OF A COMPANY WITH THE AMBITION AND FORESIGHT AND ARE A PLEASURE TO WORK WITH

invaluable support as the business evolves from specialising in supply chain management services to providing our two new products. This will allow us to reach out to international markets as we have already received enquiries on the Pro-Pod from North America, Germany and Japan.

“It is an exciting time for the business as we are expecting to increase our turnover from £4 million to £6 million this year on the back of this investment. It will also help us to increase our workforce from 18 to 30 employees, with a number of new roles at all levels, including field service engineers and board members, who will help drive

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the business forward throughout our continued growth.”

Mark Eastwood, director of business and commercial banking at RBS in Newcastle, added: “Propeller is a fine example of a company with the ambition and foresight to continue investing in capital that will facilitate further business growth.

The company is growing through diversification by meeting the changing demands of its existing customer base and winning new business in different countries. We are pleased to welcome Propeller GB to RBS.” Maxine Pott, corporate finance partner at RMT, said: “In the current marketplace, there has never been a more important time for businesses to conduct detailed strategic planning alongside reviews of their efficiency and improvement measures to monitor outgoings, while adding value to their assets. Propeller is providing an invaluable service to businesses and I look forward to seeing their continued success in the future.”

For more information on how the corporate finance team at RMT can help support your business, please contact Martin Stephenson on 0191 256 9500.

For more information about RMT visit www.r-m-t.co.uk

SUMMER 09

COMMENT

MINISTER FOR THE NORTH EAST NICK BROWN TALKS ABOUT BUILDING BRITAIN’S FUTURE The challenges the region and the country face as a result of the economic downturn are well understood. The responsibility of Government is to take action and respond. The National Plan, ‘Building Britain’s Future’ sets out the Government’s plans to drive up the country’s prosperity and economic strength. One of the main objectives is a focus on diversifying the economy through expanding the renewable technologies and developing a low carbon economy. These aims fit well with our region.

The North East has great potential in becoming a hub for the manufacture of off-shore wind turbines and is well placed to lead in the development of electric vehicles, the necessary infrastructure and the adoption of Carbon Capture and Storage technology.

Improving public services is another key element and includes a commitment to guarantee a sixth form, college or apprenticeship place to all school leavers.

There are currently 27,000 under 25s looking for work in the region. The Government is

Prime Minister Gordon Brown with the Minister for the North East at the Building Britain’s Future launch taking targeted action to ensure that no one is left out of the Labour Market.

The Draft Legislative Programme (DLP) contained within the document outlines the bills which the Government is consulting on with a view to legislation in the next Parliamentary session. There are 11 bills due,

dealing with a range of subjects from the digital economy to financial services, energy and flooding amongst others. From now, through the Parliamentary recess, I will be meeting with business and other sectors to talk about the Programme and receive feedback. This is the third year in a row that the Draft Legislative Programme has been released early allowing other Regional Ministers and I the opportunity to seek people’s views. This more open style of Government has been championed by the Prime Minister. Before 2007 the details of the Legislative Programme were unknown until the Queen’s Speech leaving no time for consultation.

To find out more about the DLP you can look on www.hmg.gov.uk/ buildingbritainsfuture and if you have views on it please let me know by contacting lee.pope@cabinet-office.x.gsi.gov.uk

GOVERNMENT OFFICE FOR THE NORTH EAST – SUPPORTING THE REGION’S ECONOMY

S

UPPORTING the Regional Minister in the work he does for the North East is Government Office for the North East.

Led by Jonathan Blackie, Government Office helps drive local delivery, integrate regional strategies and works with Whitehall departments to strengthen government policy development.

Working closely with the new department of Business Innovation and Skills (BIS) in the region is the Government Office’s Economy team – joining up delivery of government policies, especially those in areas that affect business – including planning, housing, transport and skills. The Economy team works with the Regional Development Agency, One North East to deliver the goals and targets of the Regional Economic Strategy. The team gather business and other

intelligence and feeds this back to influence central government policy making, particularly relevant in the current economic climate.

Ministers rely on Government Office to keep them up to date with regional developments, helping them to understand local issues.

Alongside the Economy Team is the Regional Parliamentary and Private Office - responsible for organising ministerial visits to the region, liaising closely with ministers’ offices and hosts to make sure both get as much as possible out of their visit.

Jonathan Blackie, said: “The role of Government Offices has never been stronger. With the introduction of Regional Ministers two years ago and the first ever North East Select Committee now sitting, regional issues matter. It is significant that the Select Committee chose Industry and

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Innovation as its first topic, putting business and the economy at the top of its agenda.”

In addition to Government Office for the North East’s regional role, Jonathan Blackie also takes a national lead for BIS across the English Network.

By acting on behalf of all nine Government Offices he ensures the department and the English regions work well together.

BUSINESS QUARTER | SUMMER 09

INTERVIEW

SUMMER 09

RIGHT CHEMISTRY When Emily Humphrys and Alison White found interest wanting up the line at the high-tech firm they worked for, they bought it out and re-planted it in the North East. The outcome is impressive, finds Brian Nicholls We’re the sole place in England which is supportive of the type of work Alison White, Emily Humphrys and their small, thriving company carries out.

A recent Mori poll suggests the North East is the only area where the public shows a growing positive acceptance of industries working with chemistry, and our region is pumping investment into White and Humphrys’ enterprise to encourage it.

Perhaps the presence of ICI, Europe’s biggest chemical complex, for more than eight decades made us acquiescent. Perhaps it’s our determination to turn chemistry to the good of our region’s health, where it has sometimes been to its detriment before.

It may be our awareness that life sciences offer us major new economic opportunity; or it may stem partly from the persuasion practised by Nepic, the North East Process Industry Cluster.

Whatever the reason, we find the North East providing more than a third of the UK’s gross domestic product generated by the pharmaceutical industry - that £2bn giving work to 5,000 people like Humphrys and White’s employees in our midst.

Their Cambridge Research Biochemicals (CRB), at this point, employs only 15, yet from its modestly sized unit, looking fit to burst its seams on Belasis Hall Technology Park in Billingham, CRB epitomises enterprise - not only in the custom manufacturing of peptides and antibodies for medical research, but also as a new-era industry.

Pointedly, it’s creating jobs for highly qualified people - jobs the like of which One North East and the regional CBI say are vital to help close England’s North-South wealth and earnings

BUSINESS QUARTER | SUMMER 09

divide. Most of CRB’s staff are graduates, many with an MSc or PhD qualification. And commercial director Humphrys says delightedly that within the past two years suitable job applicants have been found within the region.

CRB is a producer, not a researcher. But as Humphrys explains: “Even in commercial roles you must be a scientist to sell your product technically. Earlier, our people came from other areas of the UK. Now they’re coming from Newcastle and Durham Universities, where networks have been formed.”

The firm’s custom peptides and antibodies serve researchers in universities, biotechnology and pharmaceutical drug companies. They are the scientific detectives’ research tools, fostering an understanding of the interaction of proteins in diseased states, whether cancer, Alzheimer’s or cardio-vascular: “Every human disease you can think of,” says Humphrys.

So contributors to CRB’s estimated £1.2m annual turnover include multinationals such as Pfizer, GlaxoSmithKline, AstraZeneca, Novartis

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and Sanofi Aventis. “We’re not short of customers,” she says.

About 33% of product is exported: 24% to the USA and 9% to mainland Europe. Since most US competition is on the West Coast, CRB concentrates on the East Coast corridor, where its historic associations with Wilmington, North Carolina, date back to its earlier associations with Zeneca.

Other clients include the Medical Research Council and 50 or so universities in the UK and Ireland enagaged in medical research, including Durham and Newcastle. The world of academia is a major sales target.

CRB gained its present form through White and Humphrys’ management buyout in 2000, though its origins lie in a Cambridge Research Biochemicals set up as a peptide manufacturer at Cambridge in 1980.

Stemming from the world’s second oldest peptide company (after a Swiss firm) CRB can claim by descent to have been one of the first to commercialise its method of synthesis used in manufacture. A few years after the original start-up, it also began producing custom antibodies, which are detection tools for human diseases.

In 1989, both researching and providing, CRB was acquired by ICI. The business relocated north to Cheshire and Teesside. Now, under White and Humphrys, and with a recent £34,000 grant from One North East, CRB is expanding production at Billingham with a £100,000 investment in total. A new chemical synthesiser will raise production.

This machine, enabling hundreds of peptides to be made simultaneously on a sub-micro scale, will also enhance the supply service substantially. Two more chemists are being recruited and, as the company’s 30th birthday approaches, Humphrys says: “We’re optimistic.

We’re aiming to become the UK’s number one specialist for research peptides and antibodies and first-choice supplier. We’re also intent on increasing exports.”

Ian Williams, director of business and industry at One North East, affirms: “CRB prides itself

SUMMER 09

Optimistic: Alison White and Emily Humphrys aim to grow their Cambridge Research Biochemicals to become a first-choice supplier

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INTERVIEW

on working closely with customers in developing custom products. Its latest investment will strengthen this section of the business.”

Humphrys and White met in 1990. Humphrys, from Teesside, had joined ICI as a radio chemist. White, from Sheffield, was operations director. “I wasn’t suited to a purely technical role and aspired to a job offering greater contact with people,” Humphrys says. ”I did about four years as an organic chemist, but I was desperate for a commercial role and eventually I got a job in sales and became UK account manager.

“My boss was in the North West, where the peptide work was done. I got moved across there, did that for a couple of years, then got a transfer back to Billingham where my husband worked for ICI.” In 1999, production moved from Northwich to Billingham. “They were expanding other parts of the business and needed more space in which to grow the large-scale manufacture of peptides. So customs products, the small-scale operation - our bit - had to move out,“ Humphrys recalls.

It became apparent to her that strategic management was more interested in the large-scale peptide arm. A proposal was made and accepted to buy out the smaller lab-scale peptide operation from its parent, by then Zeneca (ICI having split in two).

That same year, another rebirth: Zeneca Pharmaceuticals division merged with Astra of Sweden to form AstraZeneca. The agrochemicals division of Zeneca merged with Novartis Agro-chemicals to become Syngenta.

Finally, the specialities division of Zeneca became Avecia under another MBO. This is now nearby in Billingham too, a contract manufacturer of protein-based drugs. The large-scale peptide operation CRB was previously tied to closed down in 2004.

Humphrys, having broken into sales, then wanted to run a company. “It’s what gave me the idea to approach my boss about an MBO.” White, for her part, says: “I was very excited about owning a business I had worked in passionately in for 15 years.”

She had joined CRB the day before her wedding. After ICI acquired CRB she was offered the post of production supervisor >>,

BUSINESS QUARTER | SUMMER 09

INTERVIEW

SUMMER 09

moving to Northwich. “That was short-lived.

My husband was offered a post as lecturer at Newcastle University, so I needed to move to the North East.

“I wonder now whether destiny had a hand in this. I was immediately offered a role with a group making radiolabelled peptides, and there I met Emily.”

Humphrys and White inherited the North East location, which offers advantages. Staff turnover is low, overheads too - five to 10 times below Cambridge in rents alone.

Travel between and home and work is easy, and besides One North East’s grant and other support, there’s the presence now of Nepic the North East Process Industry cluster - and the Centre of Excellence for Life Sciences (Cels) both with networking.

The management team now also includes a non-executive chairman, Dr Steven Powell of Plethora Solutions. As Humphrys points out: “We wanted someone in this role with a lot of business acumen, especially financially.

He has been a venture capitalist himself, can advise on how to take the business forward and is in a world apart from ours.

Also, unlike Alison and I, who are chemists, his background is in biology, and as all our products are chemically made, we sell to biologists.

“It’s great to have someone push you much harder. He’s a mentor, he’s good on the legal side and sometimes he plays devil’s advocate.

Also, because Alison and I are two equal owners, we didn’t ever want to get into a gridlock.”

Peptides is a market growing by about 15 to 20% a year, and Humphrys and White say they’re happy to be in peptides till they die.

There will be challenges shortly, though. While the weaker pound will help exports – hence attention intensifying towards the USA, Scandinavia, France and Germany - recession looks sure to hit the government-funded public sector’s spending in universities and medical research at home.

“If their budgets are cut that will affect us for a while,” Humphrys says. “We’re trying to mitigate that by increasing our customer base across different sectors.”

Since we, the public, care more than most, we hope that will work. ■

BUSINESS QUARTER | SUMMER 09

Peptides – the science bit Peptides have been made chemically for more than 50 years. You see them depicted in science books as a collection of lozenge shapes, colourfully threaded together.

A peptide is a shortened version of a protein, made up of a chain of amino acids. The human genome project of 2000 mapped 25,000 genes making up the human genome, and each gene produces a protein. Proteins in turn control every process essential for life.

To study proteins, scientists often find it easier to study small parts of them - ie, peptides.

Peptides also occur naturally in the body as hormones such as insulin and oxytocin, and peptide hormones regulate bodily processes, making them targets for drug development.

A peptide comprises ‘building blocks’ of amino acids. CRB buys these in to attach together in their chains. Staff take a synthetic polymer (resin) and attach the first amino acid. This resin is put into a tube within a peptide synthesis machine, and this adds the required amino acid, one at a time, until the desired peptide is fully assembled. The resin containing the peptide is then taken from the machine and treated with chemicals to chop the peptide off the resin – a process called ‘cleavage’. The peptide is released as a white powder.

It’s washed with ether to shed extraneous organics then dissolved in water. It’s then purified by what’s called reverse-phase, high-performance liquid chromatography.

As Humphrys explains: “At school you’d get a Smartie, lick it and put it on a bit of filter paper to see the colours separate. Our chromatography is much the same, but we are separating the peptide from its impurities on a basis of the ‘oiliness’ of the different molecules. It’s all done on a very tiny scale in a narrow tube containing a special material with the same role as the filter paper in the Smartie experiment.”

Peptides have been made chemically since the 1900s. In the late 1970s an invention improving the synthesis of peptides, the system CRB uses, was brought in.

CRB’s peptides are used only for research, not on patients directly. Peptides can, though, be registered drugs, such as AstraZeneca’s Zoladex drug to treat prostate cancer.

Peptides are versatile and can be made fairly cheaply within about two weeks. Sometimes they mimic certain properties of their derivative protein. “You can attach different things to peptides,” Humphrys points out.“So they’re not only used to understand protein reactions, but also as an indicator to help test theories - like a light switch. Is it on or off? Have I a hit or not? In consequence, drug companies often use them to test their whole bank of compounds with a new target. We can also tag peptides with a radio isotope, a fluorescent dye or ‘heavy’ amino acid to help track or quantitate them in biological studies.”

Dyes excite this company. As Humphrys explains: “Since 2001, we’ve been attaching proprietary fluorescent dyes to peptides. There are some clever things about dyes. You can attach one fluorescent dye to one end of a peptide and a different dye to the other end.

“One dye will soak up the emission from the other - quenching, we call it. When an enzyme cuts the peptide in half the two parts move further apart, preventing quenching. Light is given off and the fluorescence can be measured. So again, it’s a great tool for measuring how something is working. In science we usually call those assays, a test to test what’s happening; a colourful indicator of the biochemical process, and it’s fantastic.”

It’s good news for medical patients too, because fluorescence chemistry is replacing radio isotopes in this aspect, offering an alternative to radioactivity.

CRB has been working with fluorescent dyes since 2001 through a deal with Amersham Biosciences. The firm then signed another deal with market leader Invitrogen-Molecular Probes in 2004 and increased its dye range to cover an entire spectrum from 300 nanometers to 750.

Now CRB deals with an Italian company, Cyanagen, which has more dyes. This firm, CRB says, is small, adaptable with keen prices and good products unimpeded by licence fees and royalties.

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SUMMER 09

COMPANY PROFILE

Local business owners are most probably aware that workforce development courses, workshops and seminars are widely available, no more so than at Hartlepool College of Further Education, but the presence of old-school myths and pre-conceptions mean that some workforces may be missing out on significant training opportunities

FACT OR FICTION: COLLEGE DISPELS TRAINING MYTHS

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OMINIC Vizzard works as Customer Relations Manager for Hartlepool College’s Business Development Centre, and with clients’ locations ranging from Newcastle to Barnsley, coupled with the recent achievement of the Training Quality Standard, the Centre has built a strong national reputation for business training. We spoke to Dominic who helps to dispel some of the common training myths once and for all…

Myth 1: we don’t need training Undertaking workforce development does not suggest a weak or failing business, in fact it demonstrates a proactive and forward-thinking business. Not only can staff benefit from new skills and knowledge in a variety of areas, training is also found to boost morale, efficiency and overall productivity.

Myth 2: we don’t have time for training Gone are the days when a course is set for a specific day and time, or starting in September only – courses operate 50 weeks of the year at flexible times, and by no means in term-time only.

They can be delivered at the company’s premises if feasible – even entire degree courses for larger companies. Furthermore, some programmes offer a ‘roll-on roll-off’ facility, where attendees can take a break from their training should they hit a busy spell at work.

Myth 3: we’re too specialised for training There is often scope to develop bespoke courses, tailored to the business’s needs and bringing in specialist tutors to deliver them. Training can range from a one-off single day workshop, right up to a three-year higher education degree,

Myth 5: we can’t afford staff training The first point to note is that funding is available for a range of courses and training, for example for some NVQ qualifications and via the Train to Gain initiative. The Business Development Centre will assess each case individually and advise of any subsidies that can be accessed. Secondly, courses can be shared by multiple businesses with similar needs, which is ideal to reduce the cost or to enable a course to run when numbers from individual companies are low.

Dominic Vizzard (right), Customer Relations Manager

THERE IS OFTEN SCOPE TO DEVELOP BESPOKE COURSES, TAILORED TO THE BUSINESS’S NEEDS and there are many valuable courses that can be applied to any industry, such as Business Management or ICT. Myth 4: the scary classroom scenario Hartlepool College has its own Business Development Centre, from which much of the workforce development activity operates. The Centre runs as a business itself, closely integrated with the College, with a professional but relaxed atmosphere and with modern facilities. The training is geared to be enjoyable and rewarding, with sociable seating arrangements, so any daunting school-time memories can remain a thing of the past.

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Dominic’s role involves making informal contact with businesses via telephone, and arranging relaxed and friendly appointments to discuss their training needs. He explains: “Having previously run a business myself, I am able to offer firsthand advice from an industrial and commercial perspective, as opposed to being teaching or education orientated.

“The key message I would convey to businesses is that there are so many training options out there, so don’t write anything off until you have discussed it with us.”

For further information on training opportunities available, Dominic can be contacted on 01429 404188, www.hartlepoolfe.ac.uk/business

BUSINESS QUARTER | SUMMER 09

AS I SEE IT

SUMMER 09

Taxing times

BUSINESS QUARTER | SUMMER 09

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SUMMER 09

David Harker, head of Deloitte’s public sector practice in the North East, outlines the drastic financial realities the public sector must confront, and some of the bearing it may have on the private sector A lot of attention about the effects of recession has centred to date on dilemmas of the private economy, where many jobs have already been shed.

But the public sector, through the drain likely on state income, will also affect everyone significantly, both in business and private life.

Research from Deloitte on the impact of reduced tax revenue on public services and finances, in a report called Turning the Tide, suggests that as the economic downturn intensifies, increased demand for public services may affect the public sector profoundly. This pressure may stem from factors such as rising unemployment, increasing crime and more demand for social care and housing. Turning the Tide warns that, unchecked, new tensions between reduced spending and increased citizen needs could lower quality across key public services.

Analysis to date has focused on economic indicators: consumer spending, the property market and UK business, but impact on the finances, operations and policy making of public sector organisations may be equally significant. This is important. The health of public finances and the ability of government to deliver services are highly relevant to the public interest and the economy.

Turning the Tide urges the public sector to bring in tactical measures to manage immediate risks and vulnerabilities, and to ensure that government continues. But this alone is not seen as enough. There is a need to take forward a series of strategic reforms to adapt to the new climate. These include: Targeting services on a granular basis to maximise impact and deliver them in the most effective way: This includes harnessing valuable customer data from across government to improve the way services are planned and delivered and anticipate changes in demand and uptake of public services.

Managing the organisations that government depends on to deliver public services: Parts of the supply chain may now be vulnerable to failure. Contracting models must reward delivery and the public service industry (that delivers public sector services) needs to be managed to ensure continued service.

Exploiting their status as a ‘customer of least risk’: The comparatively strong credit rating that public sector organisations enjoy can be used to obtain better value for money and negotiate cheaper contracts.

Building new capabilities to adapt and survive the recession: Many public sector finance directors (like many of their private sector counterparts) are facing their first recession.

Across government organisations, finance functions may need to acquire new capabilities to oversee a strategic cost optimisation programme, assess supplier capabilities and risks, and develop new approaches to planning in an uncertain evironment.

Implement permanent cost savings: Steps could include a renewed focus on shared services, greater collaboration and joint strategic partnerships, in addition to changes to traditional human capital management to reduce ‘fixed’ costs.

In wake of the downturn, public sector organisations will have to change tactics immediately to assure their financial health and operational continuity. A programme of wider strategic reforms will also be vital if government bodies are to navigate successfully through this challenging period.

While economic uncertainty presents a threat to the public sector, it also presents an opportunity for public sector managers to drive through reforms they could not normally carry out. Public sector leaders should view the downturn in that context and seize the opportunities it presents. ■ www.deloitte.co.uk/turningthetide

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AS I SEE IT

Indicators from a range of sources suggest that: Net taxes and National Insurance contributions could fall by 3.3% in 2009-2010. Loss of revenue: £17bn at least.

Recent growth across the financial services and property sectors brought a £74.4bn increase in receipts between 2002-03 and 2007-08 - half of all total receipt growth.

These contributions are expected to fall over the next few years.

Stamp duty revenue is expected to fall by more than 40% in 2008-09, and business rates receipts could be around £300m below the 2008 Budget forecast. Local councils accrued £10.8bn a year (2006-07) from chargeable services, and 30% of local authorities in England generate more revenue from charges than they do from council tax. The value of government funding awarded to councils in England and Wales in the Comprehensive Spending Review 2007 is almost £500m a year below the original intention due to high inflation over the last two years.

UK unemployment is currently around 2m.

Some commentators predict this could rise to more than 3m by next year. Public sector pensions costs have gone up to £21.4bn – a rise of £2.7bn against 2005. The value of the UK’s largest public sector pension scheme, the Strathclyde Pension Fund, fell from a £1.6bn surplus in June 2007 to a £1.4bn deficit exactly one year later.

Demand for social housing may rise to 5m within the next two years, and one in 10 councils in England has seen greater demand for school places as demand for private education has reduced.

Organisations in the public sector face unprecedented risks across treasury functions. The Icelandic banking crisis alone is estimated to have cost local government nearly £860m. Possible threats now lie in the volatility in commodity and energy prices, systemic failure across key public service markets, and the failure of regeneration programmes.

BUSINESS QUARTER | SUMMER 09

ENTREPRENEUR

SUMMER 09

HOME PRIDE Hossain Rezaei, founder of Pride Valley Foods, Flatbread Cafe and numerous other businesses, could relax now in his historic Tyne Valley home, satisfied with a job done well, but as Brian Nicholls discovers, he’s far too busy to consider anything of the sort

BUSINESS QUARTER | SUMMER 09

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SUMMER 09

ENTREPRENEUR

There is lots of good, raw young talent in our region; people who could be nurtured into lots of Hossains - but better

Fifteen start-ups in 32 years - some going, that. It’s Hossain Rezaei’s entrepreneurial tally, and includes three in 18 months.

The 54-year-old multi-millionaire is especially noted for the successful Pride Valley Foods.

The unique bakery at Seaham was his 12th enterprise when it was sold in 2006 for £20m to Gruma, the world’s biggest maker of tortillas.

Now he’s back, no longer burnt out and fully fit. He’s also just returned from Sorrento; a surprise anniversary getaway sprung by his German wife, Nicole. The sound of Vivaldi in the background, playing softly against our conversation, suggests his heart might still be in central Europe, but no. “After a week in sunny Italy, the first thing when I got back was to tell the guys, ‘I’ve missed you, I’ve missed the buzz’,” he admits. “It’s not about having to work; I want to - for the changes one can bring for lots of people.”

We chat like old friends at his magnificent new home at Hindley Hall, near Stocksfield in the Tyne Valley. We sip cappuccino in a large lounge hinting of an oriental majlis; the proliferation of sofas, cushions and elegant ornaments signalling Rezaei’s Iranian origins.

He is still the ideas man and the moneymaker, but he has now also become a mentor. “I don’t want to do it all myself again,” he says.

“There is lots of good, raw young talent in our region; people who could be nurtured into lots of Hossains ... but better.”

He cites Justin Perkins, director of Flatbread Cafe - one of his latest ventures. “He’s a prime example. Many people have dynamism, but they need to learn the lessons that I have learned. They need to see and feel the problems and come through with the sort of help I can give.”

The background music now is Land of Hope and Glory ... “wider still and wider shall thy bounds be set”. Rezaei amplifies: “They can

then do in five years what took me 30.”

His other new enterprises are The You Company - “a cost-effective health and wellness assessment service to the occupational health and insurance industries” - and Bedou Kitchen, a manufacturer of healthy food.

Two or three more start-ups could follow, and might have done already but for recession. He believes Flatbread Cafe in Newcastle and the Metrocentre is ripe for three more siblings in the region. In total, up to 80 openings for the group are thought feasible, eventually.

As he talks, Rezaei glances with squire-like satisfaction through expansive windows to the rolling lawns that set off the hall - the focal

point of Hindley, a hamlet dating to 1232.

Previous residents of the hall have included Mrs Elizabeth Montagu, an 18th Century blue stocking, Sir Ralph Wedgwood and his daughter Dame Veronica - he general manager for 16 years of the London and North Eastern Railway, she a noted writer of 17th Century history, who died in 1997.

Other occupants have included a surgeon relative of Robert Surtees (author of the Jorrocks stories), also a relative of Alice Liddell, Lewis Carroll’s inspiration for Alice in Wonderland. Now, as the tradesmen outside bring the 1861 hall up to scratch, Rezaei says that this provides the home-work environment he needs now.

Company HQ is four minutes’ drive away, at Bearl Farm, Viscount Allendale’s statesupported £1.5m green development of 10 rural offices between Stocksfield and the A69.

Rezaei has three of the units.

“I love it here,” he says. “It has taken me a couple of years to shift from the SeahamDurham job-home scenario. Instead of two hours a day travelling, it’s now just eight >>

Ticking the box When supermarkets and other big retailers began using bread as a loss leader, Rezaei devised a new product which not only achieved higher margins, but extended its shelf life in a restrictive market The big retailers’ buyers, he discovered, made stock decisions based on the belief that customers preferred the most popular breads.

But Rezaei found, through his own costly surveys, that many customers would choose an alternative if only it were available.

He showed his survey results to the retail giants’ buyers. “You just tell the buyers there’s £3m of business to be had on the end of this research,” he says.

“I have done it for you,” his line went. “Shall I give it to you or to your boss? If you take it, I’m happy to tell your boss you had the foresight to ask me to do this research. The buyer is over the moon, he puts the product

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in, the product increases sales 40%, and he gets a big promotion, having told his boss that he asked Hossain to do it. I did that numerous times, and it worked every time.”

Before a major fire at the factory, Pride Valley claimed about half of the market. When it recovered after the blaze, much of that business had gone to its competitors.

Rezaei’s response was to bring in new products and new processes; better efficiencies and better pricing.

His typical business plan is a ‘tick tree’ of 10 steps. He puts a time and budget against every step, ticks each one on completion and makes sure to catch up during the next step if any aspect of the project falls behind. He also ensures everyone involved focuses on the same 10% of the job.

He likens it to decorating a house. “If lots of people strip rooms and then wonder what they’re going to do, jobs that should take a week can take six months instead ... with lots of unhappy wives!”

BUSINESS QUARTER | SUMMER 09

ENTREPRENEUR

SUMMER 09

Proving a point Ayatollah Khomeini never intended his revolution to drive any Iranian, let alone Hossain Rezaei, to drinking houses, yet it did, in a roundabout way.

He had come to the North East to study 33 years ago, having completed a diploma in electrical and electronic engineering back home.

Come the revolution, his £50-a-month allowance from Iran stopped; the £4,500 college fees didn’t. “I had to work in pubs and restaurants to live. Then I thought, ‘if I do this for others, why not for myself?’”

His initial venture was a takeaway in Bondgate, Darlington - probably the region’s first kebab shop. In 1985, when he planned a snooker club in Durham, his bank manager asked if he was crazy, but the club went ahead, as did ventures in property, and car and kitchen sales. Each sell-on took him closer to Pride Valley.

He gained a degree from the-then Newcastle Polytechnic, and a PhD in satellite electronics from Durham University.

He couldn’t find pitta breads to his taste, so he applied his engineering flair to mass-producing ethnic breads. After success with an initial operation at Bill Quay in Gateshead, he wanted to expand and, as shipbuilding’s demise ushered car making into Washington, coal mining’s death led to ethnic bread manufacture, among other things, at Seaham.

Through County Durham Development Company (who’d like him back on their patch today, no doubt) he secured a four-acre site which allowed phased growth. Five closed mines had left a labour pool of thousands, the coal industry’s resettlement funding offered backing, and Enterprise Zone status brought incentives.

Pride Valley became one of East Durham’s first new enterprises offering retraining. “Even as the first building was being finished, we discussed a second one, double the size. The banks were saying, ‘slow down, you can’t grow so fast’. But why not?”

British holidaymakers, he knew, were enjoying exotic foods, including ethnic breads, but he was not headstrong. “Essential to any entrepreneurship is admitting to what you’re not good at, then doing

BUSINESS QUARTER | SUMMER 09

something about it,” he says. “I had never worked in manufacturing and so had no relationship with it. I searched for a couple of good people from industry.”

He secured Roger McKechnie and Michael Hughes as non-executive directors. McKechnie had built the highly successful Phileas Fogg snack business at Consett and Hughes had founded the Dalepak meat group.

Their convertible loans of £100,000 each in Pride Valley gave each a 6.5% stake in return.

Venture capitalist 3i took 11%; £100,000 in preference stock came from British Coal; and a £250,000 loan at 7.2% fixed was advanced through European Coal and Steel Community funds.

An initial £33,000 turnover became £460,000 in the second year, £1.3m in the third, £4.9m in the fourth and £10.5m in the fifth. Rezaei says of McKechnie and Hughes: “They were a tremendous help, particularly early on. Manufacturing’s a tough, blue collar concept - lots of staff, lots of staff issues and many large contract concerns. Supermarkets were tough cookies to deal with. You need to know the game.”

A factory fire in 1995 was his nadir. “Everything I had worked for was at risk,” he says, but he never doubted the business would recover. “I never doubt my own ability or that of the people I am with. I have never known despair.”

As the just completed second unit smouldered, he sat with McKechnie, Hughes and four managers in a borrowed British Coal office. “I don’t know where I found the inner strength to calm them. They were 18 years older than me and experienced guys, but panicking. I remember the misty day, standing on a stack of pallets outside and promising hundreds of my staff what we were going to do. There were tears. But the promise was met.”

What might have been a 12-month restoration of the business was fully achieved in three. Now followed the battle for justice. Amid contributory misfortunes, four insurance firms had refused to meet the £12m cover Rezaei believed he had. Only after legal actions reached the House of Lords was 70% obtained.

About 30% of that was committed in costs, but two principles had driven him. “There was a minimum figure in my head I needed to survive with the business. The balance sheet had gone from £3.5m in the black to £4m in the red in the flames. Also, I wanted justice.”

Whispers suggested enmity because he was ‘foreign’, outside ‘the system’, yet held an MBE. Also, it was rumoured, because of the firm’s lightning growth and high gearing, if settlement was withheld, he’d go down. “The average guy would have gone down,” he says, “but they underestimated my inner strength. I was not going to let go.”

Disenchanted with Britain’s “arcane” justice, he nevertheless decided against moving abroad. “Once it was over, I felt I’d proved my point.

Why should innocent staff suffer? Better to recover and succeed so you get your reward, and customers, suppliers and everyone else are also looked after.”

By the time he sold the business – as he had always planned to do Pride Valley had become Europe’s biggest specialist bread maker, exceeding the £10m pre-blaze turnover and adding 100 more workers to the complement of 200.

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SUMMER 09

minutes - one road junction, no traffic lights, no city, no parking issues, very little pollution and nature all around.

“At my stage of life and experience, softer things become more important, particularly if you’ve worked hard and burnt yourself out once already. You’ve learnt from it and know how not to go in that direction anymore. It’s important to me now to keep this work and life balance.”

No surprise, then, that he should have dreamed up The You Company; a £4m investment. Planned over four years and online since last summer, it sells to firms upholding staff wellbeing, and to individuals who want to monitor their own health.

With a staff of 20, the prospects are considerable, he reckons. His hand-picked launch team included as chief executive Dr Fred Wright, former head of the Centre of Excellence for Life Sciences in Newcastle, and

ENTREPRENEUR

as marketing director Paul Jobling, former director of operations at South Tyneside Health Authority.

The sales pitch runs thus: while private health checks abound, this one uses unique technology, and is quicker and cheaper. A US launch had been considered, but he says: “For various reasons we decided to focus heavily on the British market instead, then Europe, and then go to the Americans.”

America will be tough. But, he points out: “It’s the biggest English-speaking nation, with the biggest desperate need for this product.

It’s where the next big crisis of our generation - health, or the lack of it - will hit first; a new trillion dollar industry of wellness.”

Even the traditional dishes from many parts of the world served at Flatbread Cafe are chosen for their nutritional value.

Rezaei’s third recent venture, linked to Flatbread Cafe, is Bedou Kitchen in

Gateshead’s Team Valley, which he has consolidated through buying Kris Blackburn’s award-winning corporate caterer Church’s Kitchen. Kris, now general manager of the new business, brought 16 staff to join 10 others in the enlarged operation.

Besides supplying Flatbread Cafe, it delivers local organic food to workplaces, offers corporate catering and manages events.

Head office for the three businesses will be at Bearl Farm, Rezaei says, until space runs out.

In this centralised management, he suggests he is the “dogsbody” - but few would believe that. “I’ve tons of good, solid business ideas,” he says. “It’s a question of which do I get on with first? I look for people who can help to bring those ideas to fruition. Ideas plus a little cash is an explosive concoction.”

Leaving Hindley Hall, as the electric gates hum to a close, it’s hard to imagine those ideas will be contained for very much longer. n

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BUSINESS QUARTER | SUMMER 09

INTERVIEW

SUMMER 09

Home suite home Newcastle is the second city in the UK to get a new kind of hotel, whose hospitality offers a home from home. Brian Nicholls finds out more

BUSINESS QUARTER | SUMMER 09

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Want to know something about the chap on top of the column outside Newcastle’s Monument Mall? Don’t ask a policeman, ask a member of staff newly recruited to run Staybridge Suites, the city’s progressive new hospitality venue.

They’ve been put through a Newcastle Culture Day - inducted not only into the running of their new workplace, but also into local knowledge, with guided tours of many attractions amid which most of them have actually grown up.

This complemented an interview and an audition that involved singing, story and joke telling and entertaining. Group culture coach Janet Roberts says the aim was to find behavioural patterns in each applicant that mirrored the values of Staybridge’s brand and that of its parent company, InterContinental Hotels Group (IHG).

She explains: “To break away from traditional hotel service, and help recreate Staybridge Suites’ unique and homely spirit in the UK,

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team members essentially become a part of each guest’s extended family.”

And, if a guest asks for local information, staff are expected to know the answer or to be able to track it down fast. Staybridge Suites breaks with tradition for a more significant reason, however. Its concept is the provision of “a home, more than a hotel” - a homily apparently borne out.

Mark Armstrong, the hotel’s inaugural general manager - formerly GM of the Caledonian Hotel in Jesmond - says: “IHG believes that having an involved and engaged workforce, confident they can bring to the workplace the same energy and enthusiasm shown in their passions outside work, is fundamental to our delivery of an outstanding service.”

In ongoing training, the staff will share best practice and awareness of guest likes and dislikes to strengthen the home-from-home experience - a blend of hotel and service apartments, aimed at extended stays.

Suite hotels have figured in US hospitality for more than 40 years. IHG has grown them for about 11- since its initial opening at Alpharetta, Georgia. Newcastle is the group’s second UK city - Liverpool was first - as it starts to roll through Europe and the Middle East its fusion of hotel comfort and serviced flats.

Its Liverpool and Cairo operations opened last year, and soon there will be further openings at St Petersburg in Russia, on Abu Dhabi’s Yas Island (a new home for Formula 1 grand prix racing from this year) and at Birmingham NEC. Further UK Staybridges will follow in London and Glasgow.

The £15m investment in Newcastle has

brought a distinctive seven-floor new build of sandy shade with terracotta tile cladding. It was designed by the young, award-winning Reid Architects of Manchester.

It stands prominently on a corner of Buxton Street, between St Dominic’s Priory Church at Shieldfield and the former Tyne Tees Television studios overlooking The Quayside. It has parking for 82 cars and is easily reached by public transport.

Built over a fragment of Hadrian’s Wall, it required the architects to negotiate planning consent from English Heritage. A structural solution was provided by building consultants Shepherd Gilmour, so the building now sits on the line of the preserved wall.

Mark Armstrong describes the location as “a great opportunity”. He explains: “We’re close to major universities and many city centre companies that, by their nature, would typically require extended stay accommodation.

“We’re close also to many famous local attractions, and our elevated position gives some stunning views of the city and the riverside, including the Millennium and Tyne Bridges and The Sage Gateshead.”

There’s certainly no likelihood of waking up and wondering whether it’s Belgium or Bristol you’re in today. Even if you forget to look out of the windows, there are photographs and paintings of Tyneside on the walls.

MIdweek, Staybridge’s 128 suites are aimed mainly at business people in the city for extended spells - perhaps relocating, on a project or training. Mark says: “Business travellers having to stay five nights or more >>

We’re close to many famous local attractions, and our elevated position gives some stunning views of the city

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INTERVIEW

Driving force Behind Staybridge Suites is the strength of a hotel group with the most rooms in the world.

InterContinental Hotels Group (IHG) owns, manages, leases or franchises, through various subsidiaries, more than 4,200 hotels and over 620,000 guest rooms in nearly 100 countries.

Besides Staybridge Suites, its brands include InterContinental Hotels and Resorts, Hotel Indigo, Crowne Plaza Hotels and Resorts, Holiday Inn Hotels and Resorts, Holiday Inn Express and Candlewood Suites.

There are another 1,700 hotels proposed over the next four years, creating 140,000 jobs around the world. It also manages the world’s largest hotel loyalty programme, Priority Club Resorts, with some 43m members worldwide.

Ten more Staybridge Suites are expected to open across Europe, the Middle East and Africa by 2012. These will complement 155 already in the USA. Longer term, there could be another 162 Staybridge Suites.

Also in Newcastle, IHG is expected to put up a 250-bedroom Crowne Plaza hotel in the Stephenson Quarter, presently being revived behind Central Station.

Staybridge Suites in Newcastle is managed

by IHG for the owner Trinity Hotels under a 20-year contract.

BUSINESS QUARTER | SUMMER 09

INTERVIEW

SUMMER 09

generally have to choose between a traditional hotel and a serviced apartment.

“We believe there’s demand for our alternative. It combines the best of both.

We expect growth in this segment.”

At weekends and holiday times, it is expected to attract families or other groups wanting more space without formality, but still with all essential services and support of a conventional hotel.

So what does Staybridge offer? Tastefully furnished and decorated studios and one-bed suites with open fires, and more space for your money than conventional hotel rooms might offer, management claims.

Both suites and studios have a kitchen area - with dishwasher, hob, combination cooker and kitchenware - or a call to the 24-hour reception desk will yield recommendations of local takeaways, who deliver downstairs.

There’s a complimentary beer in the fridge, and tea and coffee to sustain you through the first night. And of course, nearby on The Quayside there are many places to eat out. All that, and the staff take care of the housework.

The suites have a convertible sofa in the lounge for friends to stay over, there’s digital

Down Under and back General manager Mark Armstrong has 21 years’ experience in the hospitality industry, 15 years gained in Australia.

He went there at 18, spending five years in food and beverage management at the five-star Sheraton Sydney Airport Hotel.

Later, at the Brisbane Sheraton Hotel and Towers, he worked part time while studying hospitality and business management at Griffith University in Queensland.

On his return to Britain, he joined the Avon Gorge Hotel in Bristol. He was deputy general manager until moving north to be general manager of the Caledonian Hotel in Newcastle.

BUSINESS QUARTER | SUMMER 09

TV, internet access, radio, music, and DVD entertainment. There is also complimentary broadband and WiFi, and telephones with voicemail are direct dial.

Cooked and cold breakfasts are available daily in an open-plan hub kitchen on the ground floor, where coffee and cookies are also always on offer. Four evenings a week, Mark hosts an after-work reception, where guests can mingle or network over a complimentary drink and nibbles.

He explains: “It’s an opportunity for me to get to know guests and for them to get to know me. We hope they’ve no cause for complaint, but if they do, they can tell me and it will be looked into straight away.”

There’s also a convenience pantry where, 24/7, you can replenish your suite or studio with frozen meals, snacks, beer and wine, toiletries and basic medicines.

There’s also a lounge area and The Den; a quieter area with library, where informal meetings can also be held. There’s also a terrace for warmer evenings.

Back inside, there’s a free exercise room and laundry room. Dry cleaning can also be arranged. Steve Thorne, regional sales manager, recalls: “One of our longer-term guests told me his wife loves him again because he goes home at weekends now without a suitcase full of dirty washing!”

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The hotel rates are determined by the local market, and the benefit of an extended stay is that rates are discounted the longer you remain. Studio suites currently start from £59 daily bed and breakfast (ex VAT) for a stay of 29 nights or more, against £119 for a similar but shorter stay of one or two nights (ex VAT).

One guest presently working on an airport contract expects to be there five months.

While Staybridge Suites, open since April 4, is still growing, it has been listed as number one hotel in Newcastle on www.tripadvisor.com Is recession good for Staybridge’s business?

Steve suggests: “We offer value for money, as the sliding scale of charges indicates. And with breakfast, evening receptions and free WiFi included, there are no hidden extras.

“Also, given the flexibility and comfort of home here, employees can control their costs better.”

Guests’ verdicts so far have been largely favourable. “The general feel of the hotel is of quality,” said one, while another concluded: “There’s nothing snobby here. Staff are willing to help out at every opportunity.”

Which means, no doubt, you’ll be told without hesitation that the chap aloft by Monument Mall is Earl Grey, the former British prime minister who gave his name to that aromatic blend of tea that, yes indeed, they can serve you here in gallons, should you require it. ■

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INTERVIEW

SUMMER 09

MARION MAKES IT Marion Bernard’s peers say she’s one of the best advisers an aspiring entrepreneur can have. She tells Brian Nicholls why picking the North East’s soaraway firms of tomorrow is the best job she has had yet Amid the plethora of awards with which North East business entertains itself, one for the most welcoming smile - if it should ever come about - would surely see Marion Bernard favourite for the prize.

More than her smile and ready humour, of course, it’s sound judgment that has had her listed as one of 50 top players in the nation’s growth company sector.

Bernard, chief executive of venture capitalist NorthStar Equity Investors (NSEI), is the only person from the North East, and one of only five women in the country, to break into this latest Power Top 50 list. She does it with a demeanour totally in contrast to the flaming nostrils of TV take-offs like Dragon’s Den.

BUSINESS QUARTER | SUMMER 09

Business XL, a magazine for entrepreneurs, compiles the chart yearly, highlighting private equity’s most influential movers and shakers.

Bernard had no idea she might be nominated, but she’s proud that people in the national venture capital/PE arena have recognised her, and by doing so, recognised the entire NSEI team, she says.

And, she adds, it raises the profile of opportunities for venture capital and big international funds in the North East. A report accompanying the list says NSEI is: “Helping fledgling businesses in a part of the country where venture capital often fears to tread.”

Bernard laughingly agrees that it does make her sound something of a monetary Mother

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Teresa, “but whatever’s said about this region,” she suggests, “we know the knowledge economy is burgeoning here.

“That offers the opportunity to be involved at the inception of new science and technology start-ups, investing funds early when private investors may be hesitant. It’s a hotbed of talent; a great place in which to do business.”

NSEI, based in Newcastle, has two funds of £42m in all under management: a North East Proof of Concept Fund (POC) and a North East Co-investment Fund (CoIF).

Its 10-strong team manages these for the European Regional Development Fund and One North East. Investments are made on a strictly commercial judgment to help establish >>

SUMMER 09

INTERVIEW

No time like the present Is NSEI advising any aspirants to wait for an improved economy?

“No,” says Marion Bernard. “This is a time to grasp opportunities, as some young businesses are already proving.

No plan can stand still. The continual need to re-assess markets, to look ahead, is more important than ever now.”

Presently, NSEI favours the healthcare sector, IT, communications, low-carbon activities, renewables and advanced engineering.

Newcastle’s proposed Science City is eagerly awaited.

In Middlesbrough, NSEI has already attracted to the Boho Zone and Digital City a remarkable business: the technology licensing specialist, amBX UK (a name derived from ‘ambient experiences’). With £720,000 of CoIF funding, it’s establishing a regional centre to grow business associated with the £10m newly opened Boho One headquarters.

With licensed amBX devices, content creators using light, colour, sound, rumble and air flow can add effect to computer games, music, films and TV entertainment. They are revolutionising the home theatre industry, Some members of amBX management developed at Philips Research Laboratories the technology that Neil MacDonald, chief executive of the privately owned UK business, describes as, “connecting the creative and human senses”. The company was formed in 2008 with backing from Prime Technology Ventures, a leading independent panEuropean firm of venture capitalists working from the Netherlands.

Other NSEI prodigies recently include Quick.tv, Nomad, Palringo, Ethical Superstore and Reinnervate.

With a £335,000 round of backing led by NSEI, Quick.tv - operating in Newcastle under North East entrepreneurs Nick Bell and Tom Yeadon - is exploiting a tool allowing the owners of digital media content to make conventional video interactive. Users viewing say, a cookery demonstration, can click on the chef’s kitchen tools for detail of their qualities

and where to buy. NSEI has supported Quick.tv since 2006, helping take-off with £60,000 of funding. Another £500,000 followed within a year. Now NSEI has pledged £210,000 more, complemented by existing investors and new business angels.

Nomad Digital, another Newcastle firm, has a £6m commitment of new equity from NSEI and other venture capitalist bodies to win more global orders for its continuous high-speed broadband, enabling rail passengers to use their computers in tunnels or on underground stretches.

With £14.5m in total raised, Nomad’s chief executive Graeme Lowdon finds the tracks clear to expand in Europe, Asia and the USA, and to invest in creating networks.

Martin Rosinski, a 23-year-old inventor from a Polish family of engineers, has with £650,000

This is a time to grasp opportunities, as some young businesses are already proving

of seed funding from NSEI, and a second round of £2.4m from a US group, found the wherewithal to develop Palringo, an 11-strong Cramlington firm, and to commercialise a download which turns mobile phones into walkie talkies at the push of a button.

Ethical Superstore, through a £400,000 funding round led by NSEI, has completed a merger of two of the UK’s biggest online ethical retailers, itself and Natural Collection.

NSEI contributed £250,000.

This is on top of a £200,000 investment at the

51

start-up and early development of its initial www.ethicalsuperstore.com activity, and two more tranches since of £500,000 and £550,000.

The merged business, trading under both names online and by mail order, is being run from Newcastle, Sunderland and Bath.

Reinnervate, led by its chief scientific officer Dr Stefan Przyborksi, a researcher at Durham University, is going global with its polystyrene foam scaffold that enables human cells to be grown three dimensionally as in real life, instead of two dimensionally, as previously.

It secured £750,000 led by NSEI, whose £550,000 was complemented by angel investors who raised a further £200,000.

The Centre for Life Sciences gave a loan and consultancy.

NSEI encourages ideas from both sexes and from ethnic minorities. “We are most interested in getting the right entrepreneurs through the doors, regardless of their background. We need to see a proposition or product that will be commercially successful,” says Bernard.

Presentations that fail initially usually do so through lack of planning - mainly in commercial and financial areas. As Bernard defines it: “Enthusiasm for technology without a clear focus on how a commercial business will be built around the technology offering – for example, who will buy the product, for what price and, therefore, what commercial business activity can be created in the future.

“NSEI’s funds, team and contacts,” she adds, “can help businesses very early on to define the business plan and recruit the commercial people to take a fantastic technology product forward.”

Can NSEI funds meet the need? “Demand is greater than ever,” Bernard says, “partly due to the momentum developed over the five years we have done this. But also it reflects partly on the banking crisis.”An extra cash inflow this year is helping though, and with £5m still in hand she can declare: “We are very much open for business.”

If you cannot be guaranteed approval, you can at least be sure of a smile and no hint of fire.

BUSINESS QUARTER | SUMMER 09

INTERVIEW

SUMMER 09

Investing in regional venture capital deals has a major positive impact on the regional economy ... and that attracts me and grow companies with a technology bias.

“The biggest misunderstanding about NSEI is that we invest government money rather than investing funds on a commercial basis. We take a rigorous and commercial approach to every investment we make,” she stresses.

Her best advice before a proposal is made: “Take a step back and decide if you would back this proposition yourself. And would you back yourself to fulfil it?”

Bernard, still in her mid 30s, has 15 years’ experience in debt and equity finance. These include four years with Barclays where she started, and six years with 3i, where she focused on regional investing (from 3i’s Newcastle office), global technology sector investing and portfolio management (from its London operation).

Then, prior to NSEI, she managed an equity gap fund for the environmental finance group Impax, supporting the recycling sector. She’s one of only a few women heading a venture capital company and investing public funds commercially along with private sector funds.

Her involvement at the inception of new-tech start-ups, and the opportunity to invest when private investors might hesitate, makes her job the most satisfying yet. “We’re making a real difference to the local economy. Our achievement at NSEI is beyond most people’s expectations when I first took this job in 2005.

“The day-to-day, deal-by-deal activity of our team, backing world-class technologies, creating new and stronger businesses, makes it so rewarding. NSEI’s work also forms part of a bigger strategy for the North. It makes a hub for high-growth technologies, and is a major component of the Northern Way initiative.

“Collectively, NSEI is having a powerful effect on the region. It has completed nearly 300 transactions since starting in 2004, backing more than 200 high-potential companies.”

She stresses again, though, that this duty to

BUSINESS QUARTER | SUMMER 09

invest public funds alongside private sector investors (on a pari passu basis) calls for equally strict rules of commerciality and rigorous due diligence to test new businesses.

Proposers who are accepted get, besides financial support, lots of help to form the right offering, the opportunity to appoint a hand-picked team, and the right connections for raising further funds.

Bernard graduated from Newcastle University, returned south to work, but was then posted back to Tyneside by 3i. She returned south to Impax, then returned again on her present appointment - “the best decision I’ve ever made,” she says - and set up the family home in Hexham with her husband Mike, a senior lecturer with Northumbria University’s bar vocational course.

Mike is from Essex, Marion from Reading, and the couple sealed their affection for the North East by marrying at Chillingham Castle.

What drew her to venture capitalism? Her degree was in economics, as too one of her A-Levels. From studying global markets, the switch to finding out how finance can help people became engrossing. “Venture capital has a multiplier effect on the economy, through direct employment, new business activity, and also the positive effect on infrastructure surrounding a business as, for example, with suppliers and customers.

“Investing in regional venture capital deals has a major positive impact on a regional economy. It’s the impact of money and the support a venture capitalist provides around money that attracts me.”

Why not be an entrepreneur herself? “I’ve asked myself that. I’ve thought about it. But I’ve always pulled back up to now. I find my job really rewarding, and feel lucky to work with so many inspirational entrepreneurs. I also recognise my strengths as assisting entrepreneurs, not trying to be one.”

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What’s the greatest pleasure of the job, then?

“Seeing small and medium enterprises grow, and having a part in that.”

Worst business mistake? “I’d prefer not to say!

Of course there have been deals I’ve regretted, but if you don’t take risks as a venture capitalist you’re not trying hard enough.”

She relaxes by playing the piano – classics, jazz and now gems from The Jungle Book to the delight of daughter Charlotte, who’s three.

Looking now at her 40th place in the national rankings, Bernard observes: “With some of the most experienced and successful industry players featured in the Power Top 50, I feel especially privileged to be in there; an ambassador for North East England.” ■ See the full Power Top 50 list at www.businessxl.co.uk

How the funds pay out Of the £42m funding NSEI commands, £5m is still available to invest in 2009.

Early this year, £9m was added to the original pot of £33m. Some £33m comes from the ERDF and £7m from One North East. Proof of Concept investments range between £60,000 and £90,000. They are convertible loans providing capital at the critical earliest stages of start-ups.

Co-investment Funds make investments of between £100,000 and £1.5m in high-growth technology.

They lead multi-million pound deals alongside networks of co-investors, including business angels, corporates and other venture capitalists.

These funds, provided by the ERDF are invested on a commercial basis to pull private sector investment into the region.

The POC has helped 195 companies and individuals to date, while the CoIF has supported 37.

For more information, contact NSEI, tel 0191 211 2312, or see www.northstarei.com

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BUSINESS LUNCH

SUMMER 09

in association with

NEVER SATISFIED A good lunch may sate his appetite, but in business, restaurateur Terry Laybourne still isn’t satisfied, discovers Jane Pikett

It’s quite a thing, inviting Terry Labourne out to lunch. I mean, if you’re not going to go to one of his restaurants (which, when you’re reviewing the food, as we are here, wouldn’t be ideal) where do you go?

Terry suggests Bouchon Bistrot in Hexham, owned by one of his former protégées Greg Bureau, a young Frenchman of impeccable culinary credentials. Since opening Bouchon two years ago, Greg has achieved in Hexham that rare feat of delighting a discerning customer base; people who are unfailingly loyal to those who graft and achieve a consistently high standard, and who will soon sound your death knell if you get complacent.

Terry and I roll up for lunch on a Tuesday to find the place buzzing and Greg also preparing for 60 covers for dinner. On a Tuesday. In Tynedale. And that’s not unusual. As I say, in the Tyne Valley, if you do what you do honestly and well, people will support you. If you don’t, you might as well pack up and go home.

“The food is good and honest,” says Laybourne of Bouchon. “There’s a confidence and directness about the place and the menu.

It’s very good, and people do support you if you’re working hard and trying hard.”

Busman’s holiday it may be, but he claims he doesn’t get out a lot, so he’s keen to have three courses and take his time, which is probably why we don’t leave until nearly 4pm.

Laybourne favours quality produce, confidently, expertly and unfussily prepared.

The region’s first Michelin star winner in 1991, the restaurants in the 21 Hospitality Group he runs with his wife Susan and brother Laurance are renowned for consistent quality.

BUSINESS QUARTER | SUMMER 09

My last visit to one of the stable was Caffe Vivo in Newcastle and it was, I tell Laybourne, exceptionally good. He acknowledges the praise with a quiet thanks before adding that actually, you can always do things better. “I’m motivated by getting things right and no-one needs to tell me if something’s wrong, because I know it before anyone else,” he says. “There are hundreds of actions in a restaurant in any one day, so the potential for error is great. I can’t help it, I dwell on things that go wrong.”

He claims to be no perfectionist, but his language is littered with words like ‘right’, ‘properly’, ‘correct’. ‘Technically correct’ is a favourite - he likes to cook, to do all things, in what he calls the ‘technically correct’ manner. His language is that of the engineer, a profession he might have entered.

“There are technical processes to get it right,” he says. “I like to know the result I want before I start, so that I know the steps to get there, and you can apply that to cooking.”

54

In the restaurant industry, he is a leader and innovator, constantly looking to improve and drive himself, and those around him, to ever further excellence.

He has a quietly considered air, but he admits he drives himself and his staff hard, and sometimes his staff (there are about 240 employed by the group) might get the rough edge of his tongue. “Kitchens are noisy and fast,” he says. “You don’t often have time to sit down and have a cosy chat. It’s just a style of communication that’s necessary in the job.”

His lunchtime conversational style, by contrast, is comfortable and unhurried, meandering from anecdote to anecdote, his tales deadpan funny and highly entertaining. Ask him about dinner with Charles and Camilla at Highgrove, and the royal aide who confided her secret desire for the former footballer Emlyn Hughes.

It’s a corker.

At work he drives hard, he says, and Susan sometimes has to go round and smooth things out with the staff later, he adds, with a rueful smile, but it’s this drive and attention to detail, no doubt, which has made the 21 group among the UK’s elite. Its establishments - Cafe 21 and Caffe Vivo close to Newcastle’s Quayside law courts, Cafe 21 at Fenwick in Newcastle, Bistro 21 in Durham, and Jesmond Dene House boutique hotel - drive the culinary reputation of the North East.

Interestingly, after 21 years, the group has only relatively recently taken on a PR agency, in the wake of Cafe 21’s move from 21 Queen Street on Newcastle Quayside to Trinity Gardens, and the opening of Cafe 21 at Fenwick.

“It could have got a bit messy from a marketing point of view,” says Laybourne, who has had a delicate job in recent years managing the branding; deciding not to use the renowned 21 name at Caffe Vivo and Jesmond Dene House in order to emphasise individual characteristics within the stable. >>

SUMMER 09

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BUSINESS LUNCH

BUSINESS QUARTER | SUMMER 09

BUSINESS LUNCH “I’ve become convinced over the last few years that the rolling of a brand in such a tight geographical area is flawed,” he explains.

“People were making direct comparisons between the restaurants, which is inevitable, but they are different places. Also, I didn’t want to do just one thing and replicate it, irrespective of how strong the name was.

“It has to be clear that the same DNA runs throughout, but each place must have its own personality, much of which is dictated by the architecture and the front-of-house man.”

Laybourne has relaxed the restaurants’ style since the upmarket 21 Queen Street of the 1990s, creating a light, uncluttered style of food served in similarly light, uncluttered surroundings.

Caffe Vivo has a fun, Italian vibe, Cafe 21 nearby is coolly relaxed, Bistro 21 in Durham is French bistro in style, Cafe 21 at Fenwick does great pastries, salads and light lunches, Jesmond Dene House is a paragon of understated luxury. All are confident, relaxed, and infused with the quality DNA of the 21 group, but each has its own personality.

So how did Laybourne get here? Well, his childhood - “solidly working class, unremarkable” - was spent on a council estate in Lemington, Newcastle, where he grew up fancying he might be an engineer. “I was always fairly good with my hands and my brother Laurance, who’s a good bit older, was a big influence. He raced cars, and I grew up surrounded by machines.

“I was going to go into engineering, but when I was doing O-Levels in 1970 - time of the three-day-week and power cuts - my dad suggested I think about something else.”

Laybourne’s mother was an accomplished cake and pastry cook, turning out big Sunday teas with jam tarts, sausage rolls, scones and cakes, but Laybourne had little interest in cooking until one day he bumped into an old school friend, now an apprentice chef, in town.

“He told me about it, showed me some books about food, and that was it, I decided to be a food engineer. It was as instantaneous as that,” says Laybourne, smiling at the memory.

Soon after, turning up for his first job at the Swallow Hotel in Newgate St, Newcastle, he met his first mentor; a wild-haired, wild-eyed Rasputin figure, who emerged from the

BUSINESS QUARTER | SUMMER 09

SUMMER 09

I never considered that it wouldn’t work.

I had a heavy dose of ignorance, which was a good thing then. I didn’t know what I wanted, but I knew what I didn’t

larder fridge, stopping the new boy in his tracks. “Robert Waggitt - larder chef. I knew the minute I saw him it would be okay,” he laughs. Laybourne loved the frenetic energy of the kitchen - he still does - thriving on the energy, the excitement, and the deadlines.

“All my life I’ve had two deadlines a day: lunch and dinner. If there were no deadlines, I’m not sure I could do it. In fact, I’m actually naturally quite lazy. I’m a last-minute merchant too, always have been. I need to be driven.”

And driven he was by life in the kitchen, until, still only aged 19, he had a serious motorbike crash on Newcastle’s West Road. “It changed everything. Major stuff, 16 pints of blood, I was in hospital for three months and probably out for the best part of a year. You can do a lot of thinking lying on your back for that long,” he says, and he did just that.

“I think it made me independent. I did a lot of reflecting. I didn’t think about working for myself, but I did start to look ahead.”

He spent three years broadening his horizons in Jersey, then worked in Germany and Switzerland in five-star hotels.

He was home for a few weeks one summer when he bumped into his old friend, Waggitt.

He was running the kitchen at the famed Fisherman’s Wharf and was short of staff, so Laybourne decided to go and help out.

“I discovered a completely different world,” he remembers. “I had been working in huge hotel kitchens in a very structured way, but this was much smaller and much freer. Culturally, it was totally different. It was then that I realised you could achieve things with a different culture. It didn’t have to be so rigid.

“I decided not to go back to Switzerland. We were having a lot of fun at Fisherman’s Wharf, and I wanted to start to change things here.

We didn’t even get fresh fish in those days, yet

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in Switzerland, a country with no seaboard, we’d get fresh deliveries every other day.

“I had developed certain disciplines in Switzerland - attention to detail, management skills - and I started to really make changes.”

Which he did, raising standards in the Newcastle restaurant scene before deciding, in 1988, with Susan and Laurance, to open a place at 21 Queen Street.

Named for its address, it was to become one of the best restaurants in the UK. “I never considered that it wouldn’t work,” he says of those early days. “I had a heavy dose of ignorance, which was a good thing then. I didn’t know what I wanted, but I knew sure as hell what I didn’t.

“Restaurants in those days were all Victoriana and Capo di Monte, but we created a place that was plainer, sharper, cleaner, paired down and technically correct. We got rid of the need for ties and for waiters to be done up in penguin suits. We set about dismantling service and simplified everything.”

He describes Nick Shottel, operations director and front-of-house man then, and now at Cafe 21, as “a cockney barrow boy”, which certainly would not have fit the posh establishments of the day, yet Nick has driven the service ethos throughout the 21 group for the last 21 years.

“He became the face of 21, and that allowed me to bury myself in the kitchen, which is how I like it,” says Laybourne.

He says that age and experience have made him more relaxed than he was in the early days, though he remains highly analytical and slow to take praise, dwelling, as mentioned, on areas for improvement.

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BUSINESS LUNCH correct. I admit it, I’m very analytical and obsessive about service,” he says.

The business has grown steadily and enjoyed enormous success, with openings and new ventures every couple of years. 21 Queen Street was eventually re-branded Cafe 21.

“People were coming because of me and I wasn’t there all the time because I was also at the other restaurants,” says Laybourne of the re-brand. “I was sneaking in and out the back door, which was ridiculous. Anyway, the time had come to loosen things up a bit.”

Then along came Jesmond Dene House. He’d had no ambition for a boutique hotel, but the building turned up and, after much analysis (no surpise there), Laybourne jumped. He was delighted to discover that he enjoyed the lengthy process of renovating the place as much as anything he has ever done.

“I’ve got a logical brain and I had this vision for it. The development process, working with all the experts, was fascinating. I loved the exchange of ideas and the hurly burly, the falling out, all of it.”

He loves restaurants, he says, enjoying life in the kitchen enormously. “You get immediate gratification when it’s right, and I know when it’s wrong,” he says. “It’s different every day because every day you have different customers with different needs and wants.

“I like to be in there, in amongst it. Jesmond Dene House is different - breakfast, morning coffee, lunch, afternoon tea, dinner, room service, weddings, funerals, Bar Mitzvahs, and the customers stay of course. It’s incredibly diverse. A restaurant kitchen is disciplined by rigid timelines. It starts and stops; there’s a beginning and end. A hotel kitchen is a different animal and the customers have more ownership. It’s their temporary home.”

He is not scouting for more hotels, though his personality demands he is open to opportunity and there will likely be more restaurants.

“Now isn’t the time. Or maybe it is. Business is fine at the moment and I suppose if something came along, I wouldn’t be able to resist.”

What would his best friend say about him?

“Oh, that’s hard. Honest, forthright, hard working I suppose. On the negatives demanding, unreliable, disorganised, a short-term thinker, forgetful.

“Laurance and Susan are the long-term

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SUMMER 09

Bistrot fayre Bouchon is the essential French bistrot (that’s the traditional spelling); serving classic, affordable dishes in a comfortable and convivial atmosphere.

The menu includes escargots with garlic and parsley butter, oxtail terrine, poulet au citron, rump of lamp with flageolet beans and tomato Provencale. There are classic desserts like clafoutis aux cerises, crème caramel and tarte tatin.

Owner Greg Bureau insists on quality seasonal produce prepared in the customary French manner, which is perfectly suited to the restaurant’s comfortable 18th Century home in Hexham’s old tanning quarter.

Star of our lunch for me was my salmon tartare, which was fantastically fresh, zingy and a superb blend of textures. Terry’s chicken, my mullet, his iced verveine parfait and my tarte tatin were all expertly executed. Greg, as always, was a superb host; happy to chat, happy to stay in the background; and a man much admired by Terry Laybourne, which is quite a recommendation.

Bouchon Bistrot, 406 Gilesgate, Hexham, NE46 3NJ, tel 01434 609 943, www.bouchonbistrot.co.uk

thinkers. I see this as a reactive industry.

Nick once said to me, ‘once the restaurant is set and ready, all you can do is wait for the doors to open and service the customers’. We debated that for a long time, but he’s right.”

There’s not a lot in the fridge at home – some salad and tomatoes, good cheese. Susan generally cooks. They also have an Airedale

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terrier, “he’s a spoilt brat,” laughs Laybourne.

He works six days, treating himself now to Sundays off, when he relishes doing precisely nothing.

Aged 53, he is still motivated by the business, despite the fact that his reputation has been made many times over. “It’s easy to stay motivated because it can always be better, more polished. I’m not motivated anymore by awards or write-ups in The Sunday Times, but I am my own biggest critic. There are hundreds of thousands of actions you have to take to get a restaurant through the day, and getting those right motivates me.

“The most satisfying thing to me is coming out the kitchen on a Saturday night to find the buzz through the roof and a line of people enjoying themselves at the bar. Doing what we do, you get an instant measure of success.”

The restaurant food served in the region is better than it’s ever been, he says; the result of a quiet revolution. We need to be better at hospitality he says, though financial pressure on students has resulted in a more socially aware, intelligent crop of potential staff to recruit from.

He likes to eat at Bouchon, Piccolino in town, Mark Langun’s Barn restaurant group, and a few others. Outside the region, he is a fan of Rick Stein’s operation at Padstow.

Of the famous chefs, by the way, he praises Jamie Oliver, whom he once thought a bit of a prat. He bases this on the aforementioned trip to Highgrove for dinner, along with 19 other leading chefs, at the invitation of Prince Charles when he was on his mutton crusade.

Laybourne, as mentioned, tells a good story (hence the long lunch), hooking you in with his meandering anecdotes, all told with a twinkle in his eye. That Highgrove story is highly entertaining. Charles was a superb host, he says, Camilla less so. Marco Pierre White, a fellow guest, “was far more regal than any of them.” Jamie Oliver, “he was razor sharp.”

The business is sharper too these days, more price conscious to stimulate business. “We’ve also learned to deal with more customers, whereas one time we would have turned them away. It’s been healthy to pull it apart and really look at what we’re doing. I‘d hate to be in the position where you think everything is right. That wouldn’t motivate me at all.” ■

SUMMER 09

SWALES ON WINE

FINE INVESTMENT Investment director Nick Swales is pleasantly surprised by Portugal’s latest produce

Think of Portugal in drinks terms and one instantly thinks of Port, followed, I guess for most people of my generation, by Mateus Rose, beloved of our parents in the 1970s.

Rarely, however, did the parents ever speak well of the contents of the strangely shaped bottle, many of which ended up as candle holders, and beyond these two thoughts, I expect most people interested in wine at an amateur level like myself would have very little to add.

So I did some research on the internet and discovered that Portugal is in fact a prodigious wine producer; the seventh biggest in the world.

It has one of the largest numbers of indigenous grape varieties, testament to the fact that it has not slavishly followed the rest of the world in ripping up their root stock to nurture ‘French’ grapes.

The Portuguese traditionally serviced only their domestic market, but after years throwing money at the industry and growing experience by bringing in ‘flying wine makers’, plus the adoption of modern methods (ie using

stainless steel vats like the Australians and the Americans), they now believe they can export quality wines.

So, with an open mind, my wife Fiona and I tackled the first bottle - Vinha da Defesa White 2007, £10.50 from Portovino.

The label didn't say what the grape varieties were, so another look on the internet revealed that this a blend of the Portuguese grapes Arinto, Roupeiro and Antao Vaz. The wine was a pale straw colour and on the nose there was a slight hint of lime and tropical fruits. The taste revealed a good, balanced acidity - the sign of quality production probably learned recently as traditionally Portuguese whites were acidic in nature - and a long finish.

Fiona and I concluded that this was a good summer quaffing wine which would probably go well with Asian food, although we may drink it on its own, perhaps while sitting in

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the garden at the end of one of the long hot summer days we are being promised.

On another evening I opened the red - Quinta da Mimosa 2005, £14 from Portovino - asking my father-in-law to assist. Some 12 years ago, we attended a wine-tasting course together and since then we have tried many different wines, so I knew he would enjoy the opportunity to try this one.

The label told us it was made from a grape indigenous to Portugal, the Castello, and all the grapes were from a single estate.

Deep purple in colour, on the nose I detected strong hints of tobacco - cigars to be precise and a hint of pepper. Father-in-law mentioned he noted vanilla; a sure sign of oak.

On tasting, there was a smooth construction, little (if any) tannin, which was interesting, as previously a Portuguese wine ‘fault’ was overdoing the tannin. We both detected a slight sweetness initially and then a hint of bitterness; a good contrast on the journey past the palate.

There was a good, clean, long finish; the mark of a wellbalanced wine. It’s probably a little young just yet and will open up with time, but it is still very good and would give most Australian reds and many Bordeaux lesser clarets a run for their money.

We drank it on its own, but I imagine it would go well with steak or barbecued red meats.

And now that I have discovered that Portugal can produce good wines other than Port, I am keen to try more. ■ Portovino - email paul@portovino.co.uk or see the website at www.portovino.co.uk

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FASHION

SUMMER 09

BOrn in the usa

Fashion designer Tommy Hilfiger tells Chris Porter why his particular brand of American fashion remains a British wardrobe staple

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Earlier this year, the New York Times reported that a man had been spotted in a small town department store spending hours wading through a pile of jeans.

Studiously, he was trying on each pair, checking them for fit and feel. The label on each pair of jeans read Tommy Hilfiger. The reason for the esteemed paper’s interest? The man trying the jeans on had the same name.

The hands-on fashion designer has thought long and hard about that name. He knew that Thomas Jacob Hilfiger, his given name, was, as he puts it, “too aloof” for the fashion market.

As for his surname, he was convinced nobody would be able to say it, let alone remember it, and so originally launched his company under the name Tommy Hil. Until, that is, he discovered that name was already registered.

Then someone pointed out to him that no-one in the US could pronounce ‘Yves Saint Laurent’

SUMMER 09

correctly either, so he announced himself to the world with an audacious billboard campaign. It listed four names with letters missing, hangman-style. Three were obviously Ralph Lauren, Calvin Klein and Perry Ellis. The last - which was his - made up a group that the ad stated were ‘four great American designers for men’.

Few would forget Hilfiger after that. And it was a lot to live up to.

He did live up to it, however, and the company, which next year celebrates its 25th anniversary, made $25m annual sales within its first five years.

That is a remarkable achievement given that Hilfiger’s classic clothes are far from remarkable in themselves: a uniform of updated preppy classics, all vanilla chinos, button-down shirts and denim, sportswear for men, women and children, uncomplicated and wearable, and to which might be added equally uncomplicated bed linen, eyewear, jewellery and assorted bathroom paraphernalia.

Yet there has been flavour enough. After all, that uniform has travelled globally, part of the exports of American culture that Hilfiger celebrates in a book published this year entitled American Icons.

“American culture rings a bell because it’s so immersed in pop culture; rock ‘n’ roll, Hollywood,” Hilfiger enthuses, speaking to BQ amid the bustle of preparations for the recent New York Fashion Week, during which his latest collection took to the catwalk in front of the world’s key fashion buyers and paparazzibait including Hilary Swank and Diane Kruger.

“I travel all over the world and the lifestyles I see are to some extent Americanised. They’re drinking Coke, using Apple computers, watching Disney.

“Sure, America has offered the world a lot of stupid stuff - McDonalds, Dunkin’ Donuts, Britney. But then I think even with the resentment towards America as a result of political blunders, the country still has a lot to offer in terms of its heritage.”

Certainly sales would suggest so - two thirds of them are outside of the US, with sales to Europe up 23% last year. Two years ago, Hilfiger sold his shareholding in what was >>

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then a public company to private equity company Apax Partners for $1.6bn.

At the time, sales were dipping in the face of competition from the likes of Abercrombie & Fitch and Banana Republic. Now, as chief designer, Hilfiger is overseeing a move upmarket and a revival of the brand.

Last March, the company reported record results, with total group net sales up 14% to $1,964m. The period has also seen the opening of 140 new stores, taking the global portfolio to 796, with more in the pipeline, including a monolithic new four-floor, 22,000sq ft flagship store on New York’s Fifth Avenue, following on from others in London, Paris, Milan and Moscow.

There is also a programme this year of buying back licenses, such as those for the entire Japanese market and for footwear throughout Europe. “Every business has setbacks along the way,” says Hilfiger, now aged 57. “I’ve been bankrupt and run out of money more than once.”

He has been in the retail business since his teens. From in Elmira, New York, the second of nine children, in 1969 he began travelling to New York to buy bell-bottom jeans, which he customised and sold to a local Elmira store, before opening his own, The People’s Place, and selling them alongside beads and incense.

He was 18.

Ten stores of his own and seven years of importing big city style to the sticks later, the local trade evaporated and he went bankrupt.

That may have been the moment that he disappeared into the back room. He was offered design jobs with both Perry Ellis and Calvin Klein, but, perhaps more businessman than designer, he declined.

In 1984, he launched the Tommy Hilfiger Corporation and, by his own admission, timing was on his side. “It was a moment when men began to put away their ties and dress more casually, first at the weekend and then through the week,” he says. “And that idea is very American. It came out of Silicon Valley and the idea that workers would be more productive the more comfortable they were.

“I think that’s what American designers can lay claim to - the >>

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casualisation of dress, that idea of being free of the confinement that some clothes can bring.”

Hilfiger is also often cited alongside Ralph Lauren as a pillar of American clothing - the likes of Donna Karan and Marc Jacobs seen, meanwhile, as purveyors of high fashion.

But if Lauren’s schtick is English aristocratic style seen through a transatlantic lens, Hilfiger is a purely American preppy designer.

It is one reason that in the early 90s his label became a staple of urban, notably black fashion.

The other is that Hilfiger was the first designer to respond to this new market with superbaggy sizes and colourful, logo-centric clothing of a kind that saw his name cited in rap songs.

It also gives an ironic spin to the internet rumour that Hilfiger declared on the Oprah Winfrey Show that he wished certain ethnic groups would not buy his clothes.

He ended up having to go on the show - on which he had never actually appeared before - to scotch the groundless impression that he was a closet racist, but not before the gossip had no doubt hit his bottom line.

The success of so many American fashion brands might be attributed to the fact that, unlike their European counterparts, they are rarely the sum of a season’s new trends.

What Hilfiger and the rest do so well is the creation of that holy grail of sales: the lifestyle brand, able to put its stamp to just about anything.

The reason for this? Hilfiger’s explanation is as direct and as unexpected as catching him in the changing rooms trying on his own denims. “A lifestyle brand is more than clothing, more than just things to wear,” he explains. “It’s a feeling, an attitude that somehow affects the emotion - consumers want to immerse themselves in what the brand does, to be a ‘Ralph Lauren person’.

“Companies over here are especially good at building lifestyle brands because the more successful we are, the more creative we have to be to maintain that success. And you know, I think that creative drive is the product of capitalism.” n

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TIME FLIES

If you’re wearing a Bremont watch on your wrist, you’re flying high, asserts Chris Porter

Launching a new watch brand in a market that esteems heritage and history may be one thing. Launching one with the proud boast, not of its Swiss or German design, but of its Britishness, may seem foolhardy.

And yet when brothers Giles and Nick English’s father Euan was killed in 1995 in an air crash that also badly injured Nick, that is what the pair set about doing, putting their careers in the City behind them in favour of doing something for the love of it, rather than the tidy bonus.

It took a decade of planning, during which time they set up an aircraft restoration business, but in 2007 Bremont was launched.

“We were brought up building grandfather clocks, so an interest in watches was always there,” explains Giles English. “But there is also a practical appeal in these watches. Flying has everything to do with time.

“I’ll admit that I thought it would be easier to launch the company than it turned out to be. In terms of getting parts, for example, as a small company you’re right at the back of the queue. And how slow the watch industry can be is painful sometimes.

“But luckily, we have never had investors breathing down our necks, so we have been free to grow at our own pace. We’ve been able to create the >>

Boys’ own: Brothers Giles and Nick English combine their love of flying with their love of flying high in business with their watch brand Bremont; beloved of adventurers the world over

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watches we most would like to wear ourselves, which is quite a luxury.”

Indeed, what is perhaps more remarkable is the swiftness with which Bremont has been established among serious watch buffs (some models already have a three-year waiting list) and those, like the brothers, with a penchant for vintage aircraft.

The brand’s association with flying is fast becoming its signature. Bremont comes from the French farmer, and former pilot, into whose pea field in Champagne the brothers once had to make an emergency landing in their vintage bi-plane.

Bremont’s EP120 model also contains parts of the Mark V Spitfire of the same name which, in one notorious day in 1942, made six German kills.

It is all very Boys’ Own - and Bremont can count adventurer Bear Grylls, yachtsman Mike Golding and Everest climber Jake Meyer among its fans, enhancing the allure of a brand whose watches will be worn by men drawn to their spirit of adventure and the tough utility of their design.

Even if the closest you come to sitting in a cockpit is turning left into First Class when you board for a business trip, the appeal is clear. “Bremont watches are about going out there and pushing yourself, in whatever way,” suggests Giles English. “A watch says a lot about you. Any brand needs to have a theme.”

The English brothers’ connections have put them on the inside track of the luxury goods industry too - John Ayton, founder of the Links of London jewellery chain, and Robert Bensoussan, former CEO of Jimmy Choo shoes, have both provided expert advice.

The company was also smart in supplying the actors Ewan McGregor and Charley Boorman with watches for their televised motorcycle trek, A Long Way Down, and it also now sponsors the Goodwood Festival of Speed.

The timing, far from being a disastrous time for growth, has been good for Bremont. In part, Giles English argues, because other companies with a reputation for pilots’ watches have “lost a bit of their soul”, by becoming part of luxury goods conglomerates and by chasing fashion.

If English likes to describe Bremont’s rigorously tested, tool-like aesthetic as being one of high functionality (later this year it launches its first diving watch the SuperMarine 500, named after the Schneider Trophy seaplane) it certainly makes its watches stand apart from the glitzier styles some more established brands have produced, perhaps at a cost to their image.

Bremont is also playing a part in a renaissance of British watchmaking. The world-class bespoke watchmaker Roger Smith, based on the Isle of Man, has in recent years been joined not only by Bremont, but by the likes of Graham and also Dent, pioneer of the marine chronometer and maker of the clock mechanism on the tower at the Palace of Westminster (also home to Big Ben).

Watch collectors are beginning to appreciate that before mass-manufactured watches squeezed out the artisan, and the Americans and then the Swiss came to dominate the industry, Britain once led the way.

Hans Wilsdorf, after all, launched a company here in 1905, renaming it Rolex in 1908; its name, inspired by the sound of the winder, coming to him while sitting on a London bus.

“Britishness is part of what makes Bremont different,” explains English. “It is probably too soon to speak of a renaissance, but certainly there is a new >>

Time of his life: Charley Boorman sporting his Bremont watch during the filming of his and Ewan McGregor’s motorcycle adventure A Long Way Down. Boorman is one of several adventurers to endorse Bremont

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Britishness is part of what makes Bremont different ... there is a new credibility for English watches now; people are thinking about them again

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There is a huge history in British watchmaking that nobody seems to know about, but there is very much a British style of movement

Form and function: Bremont watches, known for their blend of great design and industrial-strength functionality, are favoured by sportspeople and explorers. Bremont’s first diving watch launches later this year

credibility for British watches now; people are thinking about them again.

“After all, there is a huge history in British watchmaking that nobody seems to know about. But there is very much a British style of movement, right down to the thickness of the plates.”

The slowdown affecting many giants of the watch industry means Bremont is no longer at the back of the queue, and the downturn has freed up time and components from the Swiss workshops that supply the parts inside Bremont’s distinctive, curved, British-made steel cases manufactured by a Cambridge company that also, appropriately, finishes jet turbine blades.

In fact, business is so good that the company can even afford to give its watches away, albeit once its recipient has undergone something of an ordeal.

For when Bremont launches its entirely British-made MB1 watch at the end of this year, it will award one to every pilot to survive a crash using an ejector seat made by the pioneering British company Martin-Baker.

Thankfully, a more commercial version, the MB2, will be available for those who would rather not go through the trauma of being rocket-propelled out of an aircraft at 30,000ft, which is a relief. ■

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SUMMER 09

GOOD SPORT

Ben Cottam, MD of Cottam Brush, Jarrow, unleashes the boy racer within when he takes to the road in the new Audi S4

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SUMMER 09

When I met Chris March, BQ’s publisher, at a business dinner a little while ago, I think it took me about five minutes to ask him if I could test drive a car for the magazine.

I would describe my interest in all things motoring as a hobby, a pastime or maybe even a passion. My wife would describe it as an obsession.

I’m a car guy, a petrol head, a los… well, we’ll leave it there. So reviewing a car is my dream job. Talent for writing is another matter; let’s hope my enthusiasm gets me through this.

So, as the Managing Director of my family’s business, it’s my job to keep our customers happy, our vision focused and our business profitable. Nice and easy then, and fortunate that we’ve got such a fantastic team here at Cottam Brush; our business is strong.

We’ve been designing and manufacturing industrial brushes in the North East for more than 150 years now.

We supply into many different markets and that has proven critical in the recent economic downturn; our risk is spread. So what does a car-crazy MD

drive? Well, sorry to disappoint, but I’m a serial Smart car driver (I’m on my 3rd now).

I love the concept, experience, cost (or lack of it) and status-free image. Smart cars are like Land Rovers - they’re one of the few class-less cars that keep you guessing about the owner.

It could be a student, an MD, a single mother or Lord of the Manor. I’ve got a couple of other cars lurking in garages around the North East, but I’m already eating into my space allowance, so we’d better get on with the review.

So to the Audi S4. If Jeremy Clarkson is to be believed, the annoying fraternity that spent the 90s and early 00s buying BMWs (you know, the ones that don’t let you out of junctions and use too much hair gel) have made the switch to Audi recently.

I’m not so sure; my Dad’s got an Audi and he’s a nice chap. And he doesn’t have enough hair to need the gel. Anyway, let’s park the image issue for the moment and look at the car.

First impressions were, well, underwhelming initially. This car lists at nearly £36k before you start playing with the option list, from which you could easily find another £10k of things

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MOTORING

you’ll convince yourself you really do need.

The car looks like, well, an Audi A4, which is a handsome enough car, but lacking a little in wow factor.

The test car’s silver paint also reduced the impact, simply because it’s such a popular choice. In another colour it would stand out a little more, particularly with the aluminiumeffect wing mirrors.

A quick walk around the car and it gets a nod of approval for the quad exhausts sticking out the back. I’m sure they’re not necessary (I can’t get my head around four exhaust pipes for six cylinders) but they look great.

I jump in and start it up using a slightly odd key arrangement - you push the key fob into the dash and then push it again to start the engine.

I’ve never thought there was anything wrong with the basic design of a key that turns, but I guess this keeps the design engineers happy and it works well enough. The electronic handbrake button is also a neat touch.

I showed the car to a few colleagues and, in summary, we liked the reversing camera, the daytime running lights, radar cruise control >>

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MOTORING

SUMMER 09

I quickly change the suspension to sports, the gearbox to sports and the engine to sports; must be a bloke thing

(never used it, but it looks good) and the three-zone climate control.

And we didn’t like the naff S4 logos on the seats, the white stitching on the black seats, daytime running lights (again), and the boring silver paint.

My personal take on the daytime running lights is that, despite being generally proEU, I’m not that keen that a committee somewhere in Europeland has decided that I have to have my lights on all the time. I like to make that decision myself.

And to make matters worse, someone at Audi thought that fairy lights from a

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Christmas tree on the front of a car was good idea.

Anyway, what’s it like to drive? Pretty good really. It’s quick enough (0-60 comes up in just over five seconds) and it will sit on its self-imposed speed limiter at 155mph - in Germany, obviously.

Although this car would be classed as a ‘compact executive’ it is still a big and heavy beast. Audi have done a good job with the handling though, as it feels pretty nimble to me.

The test car was fitted with Audi’s latest seven-speed dual clutch automatic gearbox

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which was fantastic. Move the gear selector to manual and change gears with the paddles behind the steering wheel. I’ve driven a few cars with this set up and I’m a big fan. I’d prefer larger paddles, as on this car they are no more than buttons, but no matter, I like.

I delve into the car’s menu system – quite intuitive to use when stationary and guaranteed to make you crash if you try and use it on the move.

I quickly change the suspension to sports, the gearbox to sports and the engine to sports.

Not sure why; must be a bloke thing. >>

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SUMMER 09

What Bob says ...

Everything set to sport: Ben Cottam brushes up on German engineering in the Audi S4 Anyway, with everything set to sport the car was still pretty comfy. I didn’t have it long enough to try all the settings and I suspect you would never bother changing them if you owned the car. Nice touch though; I like having the choice.

Personally, the thing I like most about this car is that it has a smaller, lighter, less powerful engine than its predecessor. But crucially, it’s quicker and more fuel efficient.

I’m pleased that German car manufacturers have declared a truce and have stopped playing a Top Trumps power game. By being more intelligent, this new S4, with its 3.0l V6 engine is lighter and more fuel efficient and faster than the 4.2l V8 car that it replaces.

Well done Audi; now let’s see BMW and Mercedes doing the same.

As the legendary Lotus founder, Colin Chapman, said: "Simplify, then add lightness.”

It would be great to see more of this philosophy in automotive design. It’s a shame that it’s taken environmental pressures for this to start; to me it’s just good engineering.

So then, back to the image; well, I don’t think that anyone will be making ‘special’ hand

BUSINESS QUARTER | SUMMER 09

signals to you if you drive one of these. Well, not on the relaxed and friendly roads of the North East at least. So, I wouldn’t worry too much about it.

I think that this is also one of those cars that (despite its price) you needn’t be embarrassed to park in your customers’ car parks.

It’s not a ‘we must be paying him too much’ kind of car, which is a good thing. Rather, it’s solid and interesting without being flashy and let’s face it, you can’t always say about its German rivals.

So, overall I like this car. Personally, I’d take the estate version - there’s something special about a fast Audi estate. I’d also choose any colour except silver.

It’s maybe lacking a little in excitement, but perhaps that’s the point. This is a Q-car - an under the radar machine. Except for the fairy lights and the dodgy seat logos of course.

So then Chris, same time next quarter? ■ The Audi S4 driven by Ben Cottam is priced £44,990 and was provided by Teesside Audi, Brook Lime Avenue, Stockton-onTees, TS18 3UR, tel 01642 603 444, www.teessideaudi.co.uk

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Audi have recently been on a winning streak recently with the excellent RS4, which has given the BMW M3 something to worry about.

When Audi launched the S4 they changed the engine from a 4.2lt V8 to a petrol 3.0lt V6. I for one thought it was a very brave move. The new engine is also 11 bhp down on the outgoing model, however the new S4 is 37% more economical and it should average around 29mpg in the right hands. The new engine has reduced emissions by 30%. This puts the car in road tax bracket K with annual road tax bill of £300 (obviously the reason for the change). The S4 can accelerate from 0-62mph in 5.1 secs and its top speed is limited to 155mph. The car is available in either 6 speed manual or with the excellent 7 speed S Tronic double clutch gearbox.

The car comes with Audi’s excellent Quattro 4 wheel drive system. This has been given a new sport differential. Which allows the torque to be distributed between the rear wheels and enables power to be distributed between the wheels where necessary, which in turn makes the car more fun to drive in corners and when accelerating out of bends.

As you would expect from Audi the S4 receives a 5 star NCAP rating. Along with the all wheel drive system, the car also benefits from LED daytime running lights and LED rear lights, side assist (which monitors blind spots during lane change) ESP, ABS, and EBD (electronic brake distribution).

If you are looking for a car with excellent performance and with understated looks then this is the car for you. It is priced at £36k and is a viable alternative until the new RS4 comes out!

Bob Aurora is an independent car reviewer and also owns Sachins restaurant on Forth Banks, Newcastle. bob@bq-magazine.co.uk

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ENTREPRENEUR

SUMMER 09

SOMETHING FOR THE WEEKEND? Saks, one of the UK’s most successful hair and beauty groups, is about to move into men’s barber shops with a cheeky grin and lots of laddish humour. Jane Pikett discusses the relative values of marketing via sex, sports cars and something for the weekend with MD Stephen Kee

Bad news. I need a haircut. And I’m meeting the MD of Saks - the 140-strong salon group and internationally renowned leader in hair and beauty. I almost crash the car on the way there because I’m trying to brush my hair and drive at the same time. This is not to be recommended.

I’m only there five minutes, however, when he - Stephen Kee, known as ‘Skee’ - asks me where I get my hair cut. “It’s lovely,” he says, “do you go to Saks?”

No actually, I go to Hooker & Young. The hint of a frown plays across his brow before he rearranges his features into a smile. “Hmmm, good. Of course, they’re excellent.”

As is Saks; a completely different animal, with its 140 hair and beauty salons, its national Academy programme and plans to launch scores of barber shops and stand-alone beauty salons.

Kee also admits that he has cut his own

BUSINESS QUARTER | SUMMER 09

hair himself the previous night. “I know, it’s ridiculous, no-one’s cut my hair for ten years.

I’ve cut my own hair in hotel rooms before major award ceremonies. It’s mad isn’t it? I’m just not organised about it,” he laughs.

He’s done a fine job; his thick silver mop cut into a choppy style which suits him well. He’s easy, relaxed company, talking about opening scores of salons and launching new business divisions as if it were as routine as nipping out for a Sunday paper.

In the mould of the natural-born entrepreneur, his radar is constantly tuned in to opportunity and possibility, and he’s secure in his instinct when it matters most.

He’s strongly proactive, flexible, and he gets a real buzz out of left-field, creative thinking.

He also makes it all out to be so easy, puzzling over people who find reasons not to do things, in life or in business.

“It’s too easy to say it’s too hard to do things.

You’ve got to get out there and do it,” he says. “People say, ‘how did that opportunity come along?’, but they don’t come along, you just go and find them. It’s not hard at all.”

He joined Saks at 17, having dropped out of sixth form. After a couple of years, he bought into the company and began to drive a prodigious growth into franchises and the highly successful, proactive business model there is now. One of the two founders is still

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involved, though not operationally, the other sold out and enjoys the life of an international jet setter.

There are three directors in the company today, and several different businesses – including the franchise set up, the Academy business, which is credited by the LSC for NVQs and the like, a salon in Dubai, which is the beginning of a growth strategy in the region, and the new barbershop and beauty chains, both soon to be launched. Kee is major shareholder in some parts of the business, a partner in others.

They have just launched a new barbering course, capitalising on the increase in the newly redundant looking for a new career or a new business, either as a Saks barbershop franchisee or for themselves.

The Saks barbershops are yet to be named and Kee is having a lot of fun thinking about it. “Oh yes, this is fun. It’s shallow marketing; men are only interested in cars, women and sport. I mean, how subtle is the men’s market?

No, there’s no subtlety at all,” he laughs.

“The barber shops will be cool, young, funky and lad-driven, which doesn’t fit in with the Saks concept at all, so it has to have a different brand aimed at lads who read FHM, Nuts, that type of thing. In men’s hairdressing, no one has ever said, ‘all our people are trained, we have the latest collection and the

SUMMER 09

latest looks’. You just turn up and they cut it and then they ask if you’d like something for the weekend. Mind, we’re doing that too. Ha, ha; it’s fun, isn’t it?”

Kee certainly has fun in business. The working title for the men’s barbershops is CAF (Cool as F**k). “Do you think we can get away with that?” he asks, with a broad grin.

The first salon will open the end of this year, either in Newcastle or Leeds. These will be small salons with an industrial feel, a shabby chic to the interior design. “It won’t be wood panelling and a red and white pole outside, that’s for sure. It’ll be cool; a bit cheeky. It’s not a grooming salon with shaves and stuff; it’s a lads’ club where they can talk and read about cars, sport and women.”

They will open 20 barbershops a year, starting in the North. They will run the first for six months and start to roll out the brand after that. Easy, he says.

Saks salons are ubiquitous, just off the main drag in city centres and in market towns.

“Good properties at the right sort of rent,” says Kee, the canny businessman.

Saks’ target customers are women aged 25-55 with disposable income and high expectations, hence expert staff training is crucial. There are Saks Academies in Darlington, London Covent Garden, Edinburgh and soon in Cardiff.

There are accredited courses for both Saks staff and fee-paying delegates, much admired by national training bodies. Education and NVQs provide a significant and growing revenue stream, the core of the business being the salons, obviously. There is also an international art team and an Academy in Italy.

There are plans to franchise abroad, in the Middle East, and that has begun with Saks’ new salon in Dubai. “It’s the gateway to the region - Abu Dhabi, Bahrain and the like - and we will grow there in the next couple of years.

If you get established in Dubai you’re on your way,” says Kee, who investigated international markets before opting to roll out the brand in the Middle East.

Originally, and unusually in this business, he set out to be a businessman first, hairdresser second. “Okay, yes, most hairdressers set out to be hairdressers, but I wanted to be in business; it just so happened that I walked into a hair salon down the road in Darlington and >>

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ENTREPRENEUR

BUSINESS QUARTER | SUMMER 09

ENTREPRENEUR

Founded in 1974, Darlington-based Saks has 140 salons.

Franchising took off in 1981, when the Saks group stood at 12 salons. Since then, it has grown year on year.

The beauty concept was launched in 1995 and Saks is now the UK’s leading high street beauty salon group, with standalone Saks beauty salons now planned.

In 1998, the business became David Lloyd Leisure’s nominated salon group. As British Airways’ nominated salon group, Saks also has salons at Heathrow Airport, catering for BA personnel.

A new salon opened in Dubai in 2008, and more will follow in the region in the next two years.

Awards won by the group include British Hairdresser of the Year, the L’Oréal Colour Trophy, the HSBC Franchise Award, British Franchise Association Franchisee of the Year, and numerous British Beauty Awards.

Saks Academies offer NVQ training and the company has been awarded Beacon Status by the Quality Improvement Agency and grade ones by the Adult Learning Inspectorate for outstanding training. Saks is a benchmark for educational best practice across all industries.

The Saks Art Team inspires hairdressers in India, Greece, Denmark, Prague, Malaysia, Crete, Ukraine, Switzerland, Lebanon, Germany, France and more, presenting shows and seminars.

BUSINESS QUARTER | SUMMER 09

SUMMER 09

asked if they had any jobs. There was a guy in there canoodling with a receptionist and I thought, ‘hey, that looks fun’. They said, ‘how long have you been in hairdressing?’, and I said ‘I haven’t’. Then they said, ‘well you might as well start on Monday then’, and that was it.

“For about six months after that, my father used to say, ‘you don’t have to keep on going there you know’.

“I just thought that in the land of the blind, the one-eyed man is king, and if you had a bit of business nous you could do well.”

If he hadn’t walked into that Saks salon, he might have ended up in the City or been a professional gambler - not that there’s a lot of difference between the two, he says. “That’s what I liked, playing cards or whatever, not that I’ve done it since college, and in the City, playing with other people’s money might have been fun.”

His father was general manager of the Northern Echo, and as a teenager he’d done a few Saturday shifts, running copy for reporters in the field back to the office. “Oh, I remember some football match in Shildon, and an afternoon spent at Darlington Dog Show, but you know, I didn’t like dogs, so it wasn’t my scene,” he says with grin and a twinkle in his eye.

He enjoyed hairdressing, loved interacting with the clients (“yes, women do tell their hairdresser everything...”) and relished the business side. “I realised all you have to do is talk to people and that makes you money, and that’s how I’ve worked ever since.

“You can just sit there and think, ‘how am I going to make money’, but if you go and talk to people about ideas, that’s how you do it. No good sitting there thinking ‘what am I going to do’; you just have to go out there and do it. I was about 21 when I realised that and that’s how I’ve done things since.”

He likes to do a project, get it finished, and move to the next thing, or at least that’s how it’s panned out. “I’ve got loads of bottles of champagne here, when people have said ‘hey, let’s celebrate’, but I’ve never done that.

I say ‘yeah, great, but we’re working on this thing now; we’ve moved on’. I don’t stop to celebrate. Is that a failure? I don’t know, I just like to move on with the plan.”

He considers further, before adding: “I used to

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really like the process, but now I like it more to see all the plans come to fruition. I guess I’m more into the outcome now, rather than the journey, probably because there is so much going on in the businesses.

“When we open the first barbers, that’ll be a big one. That, and when we launch the new stand-alone beauty salons.”

Beauty at Saks is a big deal, and the new concept is for a clinic group majoring in highly specialised treatments – Botox, fillers, peels, IPL hair removal and the like. Stuff you need a science degree to understand.

Kee is extremely well versed in the science.

“These treatments can make a real difference.

It’s about skin. It’s not about eyebrow shaping and that sort of stuff. It’s more heavy duty.”

He goes on to advise me that a bit of filler in my frown lines would be good. “Those lines there,” he says, peering at the offending articles, “a bit of Botox would do for them. If they get worse, you might need a bit of filler.”

By this point I’m frowning, which is no doubt helping those lines carve their way deeper into my forehead.

“It’s okay to have this stuff,” he says. “Women want instant results these days, and why not?

These things are changing people’s mentality.

Botox is brilliant. You say to me, ‘oh, I’d never have Botox’, and I say you would, and I can’t lose until the day you die can I? It’s a bet I can never lose.”

He’s grinning broadly again, and while I might live with my frown for a while yet, doubtless Saks has hit on a growing market again.

Kee has surrounded himself by good people, experts in their field, and he calls on their expertise when deciding the direction of the business. At the same time, however, he also has the confidence to trust his own instinct.

“I can usually see something and know we need to do it, then break it down into bitesized chunks and farm it out to folk. You have to surround yourself with good people; you don’t have to do it all yourself.

“It’s no bad thing not to know everything. Just surround yourself with people who do know what they’re doing. And you know, the main thing with managing people is being totally consistent, fair and straight.

“You have to see what the consumer wants and then think, ‘okay how do we give it to

SUMMER 09

ENTREPRENEUR

them?’ Then when it comes to the marketing, “We had to get more creative about it. It’s you just think, ‘okay, how do we tell them’. not shaving, it’s not facials, it’s just lads; giving It’s easy, isn’t it?” He uses the word easy a lot, them somewhere cool to get a haircut. I had and he certainly gives the impression of being to push to make people loosen their thinking, fantastically relaxed about it all. His instinct, and say, ‘look it’s about cars, sex and Viagra, clearly, has served him well. lap dancing in the window from 10pm till “Gut instinct is important, yes. At certain times midnight’. Then they got the idea; you have to I’ve gone against it and taken too long trying be a bit extreme to get people thinking.” to convince everyone around me, instead of Where’s the business headed? More growth, thinking, ‘no we need to just do this’. It’s not obviously, with some consolidation just now. about being dictatorial, it’s just about having “We want to be an international household confidence. You can do research to death.” name. We have a well-known brand, we’re His creative thinking strategy is way out in left concentrating on our core service, quality and field, and that inspires those around him. “We education. We can benefit from recession wanted to do the men’s barbering for ages, because we’re being offered good rents. but we thought it would have to be a Saks for “Women are coming a bit less frequently now, men, which wasn’t what the market wanted. but spending more. It’s okay. We have a vision, One day I just thought, ‘who says it has to be and in five years we will be the household like that?’ We were hung up on it. We had to name for hair and beauty, we’ll have the men’s 0309_LH_BQ Mag_120x180 17/7/09 16:44 Page 1 move out of that mindset.This brand is going chain, products for men and women, more to be more cheeky, more laddish.

Academies and more international business.”

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He spends a lot of his time now, he says, thinking and strategising. And he allows himself to work only five days a week, splitting his work life between Darlington and London and home time between homes in those two cities and in Marbella, where he and his girlfriend of 30 years, Maxine, spend every weekend during the summer “I love bringing in new creative projects. I love the creative buzz here and in Covent Garden.

And I work hard, so if I’m not working, I want Maxine and I to spend our time together, which we do. It’s a good life.”

He’s having fun as he grows Saks into a truly international brand. He’s not driven by external recognition (interviews like this are rare) and he appears relaxed and genuinely ego-free. He is driven, rather, by hitting goals and having fun. This ensures his smile muscles receive regular exercise, which will presumably ward off the Botox for another day yet. n

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BUSINESS QUARTER | SUMMER 09

INSIGHT

SUMMER 09

A matter of taste Good coffee is always a pleasure and, agree coffee expert Stuart Lee Archer and Brian Nicholls, it can be a deal clincher

How often do you visit some senior executive’s office and get a warm greeting, but a lousy cup of coffee?

We do know one chief executive in the region who keeps the percolating paraphernalia beside his own desk, insisting on making his visitors’ coffee himself. Even some vending machines can now drop a reasonable plastic cuppa, though Stuart Lee Archer of the famous Pumphreys - roasters since 1750 - may not agree.

He does agree, however, that many executives seem to underestimate the value to a company of giving clients the best coffee. It can, he

BUSINESS QUARTER | SUMMER 09

says, signal instantly that your business champions quality in every area, including its refreshments.

“Coffee making is led by people’s intrinsic motivation,” he says. “If they love good coffee themselves, they will be interested. But you can’t force it on them.

“If the person in charge of the company cares a lot about the taste of its coffee, the quality for everyone - staff and visitors - will generally be higher, and the more competent your hospitality, the better your chances of a success in the business.”

And if it’s corporate parsimony to blame,

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remember this: the cost difference between a satisfying drink and a disappointing one could be nothing compared with the cost of a contract lost through a failure to impress.

Public taste is becoming more discriminating and to Stuart and other members of the Archer family - who have owned Pumphreys since 1983 - the arrival in the North East of Starbucks, Costa and the like has been, in Stuart’s words, both a blessing and a bit of a hindrance.

While these brands intensify competition for coffee suppliers, they have also inspired an upsurge in numbers of people now inclined to set up cafes themselves.

Says Stuart: “We can, and do, set up small independents to make better coffee than the big players, given the choice of coffee they’ll have and its freshness.

“Big national and international chains have marketing punch and pots of money to guarantee their presence, but small independents, through local suppliers, can get coffee very fresh indeed, react faster and produce real quality drinks.

“As suppliers ourselves, we build close relationships. Instead of delivering one-off bulk orders maybe three times a year, we can deliver twice a week. Independents can get their beans just a day off the roast. We’re roasting all the time.”

Despite stiffer competition, Pumphreys, with 18 staff, turned over about £1.2m last >>

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INSIGHT

Good taste: Stuart Lee Archer and his sister Paula are right at home at the family coffee business, Pumphreys

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INSIGHT

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year, with business in the core area of Edinburgh to North Yorkshire and Cumbria rising 5% year on year.

Its modest retail outlet in The Grainger Market, Newcastle, only yards from a Starbucks, is showing a marked rise.

The upmarket Whittard of Chelsea, which was also nearby, pulled out when the Icelandic bank backing it collapsed, and Fenwick department store, also nearby, dropped Pumphreys as a supplier around the same time - after some 126 years - in favour of a franchise.

The outcome of all this has been a greater footfall for Pumphreys’ shop, Stuart says.

“People come to us saying they can no longer get the quality of coffee they want.”

Pumphreys’ main operation is in Bridge Street, Blaydon. There, customers from the catering and retail trades mingle with shoppers, chatting in a continental cafe atmosphere as they sample and purchase not only coffee, but tea and various brewing accessories.

All this is in the factory shop adjoining the roasting house and cave-cool store, from which quality beans from many countries are drawn to be flame-roasted in drums more than 100 years old.

Customers call personally and online; shopping for hotel and restaurant chains, local authorities, coffee shops, tea rooms and offices nationwide.

It may be espresso, Fairtrade and organic (demand for both is growing), decaffeinated, flavoured or even chocolate-coated beans they seek, plus many more; for there are more than 80 kinds of coffee and tea on offer.

This tree and rock-sheltered caffeine haven has traded since 1983, when the main business relocated from Newcastle’s Bigg Market. That year, Stuart’s grandfather Charles Jeffrey, who died last year, bought the business and relocated from the old market streets of the city centre after more than 230 years there.

The decision was courageous. Though Pumphreys had abandoned grocery trading nine years earlier, the Bigg Market was still a popular venue, with archaic benches and stools, and the aroma of brews greeting as you stepped upstairs.

Gadabouts regularly moved between there and what, nearby, was once Robinson’s Wine

BUSINESS QUARTER | SUMMER 09

I don’t drink instant, but if some people only want a hot caffeinated drink that’s up to them ... but in terms of quality, producers try to get above a certain threshold

Cellar; sawdust floors and all, where you sat on stools amid aged wine barrels to down Madeiras copiously. A short walk then to a singsong at Balmbra’s Music Hall – a cultural pastiche, fated when uncouth replaced unconventional and the raucous party milieu of today prevailed.

Blaydon, happily, has been good for Pumphreys, though business now is, to a degree, barista-led - much as Stuart would love the coffee to remain predominant.

“Coffee remains important. But you need machines to sell it too. Espresso and filter are what the public expect now,” he says.

Pumphreys offers barista training. It’s a distributor also for many Italian manufacturers of traditional espresso machines, and has its own service engineers. On behalf of UK users, it also advises on design and production processes, and is UK distributor for coffee bean dispensers used by delicatessens and groceries. Many cafe start-ups are the

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outcome of redundancy payments from other jobs, and Stuart finds it odd, perilous even, that some enthusiasts jump in with little experience.

“You don’t start a car servicing business if you’ve never serviced a car before, yet people plough into cafes and throw money around.

Proper equipment for coffee making costs maybe £5,000. There’s a lot more to this than meets the eye, as they find out.

“But we have good relations with many who do succeed. And they come back repeatedly when they see good quality, good service. If their machines break down, we fix them.”

What about instant? Stuart is diplomatic: “Instant has its place. The market’s a bit like the meat trade. You have quality meats and steaks at one end, sausages and burgers at the other. You try all of a cow to really appreciate the nice bits.

“I don’t drink instant, but if some people only want a hot caffeinated drink, that’s up >>

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INSIGHT

SUMMER 09

Bean Feast Coffee grows only in countries between the Tropics of Cancer and Capricorn.

The main producers are Colombia, India, Indonesia, Ethiopia and Mexico, but Brazil still grows most of the world’s coffee – about 70%.

Vietnam has shot up the production table over the last five years, but Stuart asserts that the quality only suits instant.

Beethoven, a coffee addict, counted 60 beans for every cup he made.

Surprisingly, the world’s largest coffee consumers, per capita, are not in France, but in Finland, Sweden, Norway and Denmark.

Japan is a big consumer – partly because the Japanese ferment coffee grounds with pineapple pulp and apply it to improve their skin and banish wrinkles.

Coffee has been drunk for more than 1,000 years, but only since the 16th Century in Britain. London’s first coffee houses opened in the 17th Century, and from them Lloyd’s of London and the Stock Exchange evolved.

Turkish bridegrooms once had to vow at their wedding always to provide their new wives with coffee. Failure to do so was, pardon the pun, grounds for divorce.

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to them. I’m not snobbish; they can do that if they want, but in terms of quality, producers always try to get above a certain threshold. A crop below that will go to instant coffee, and they get nowhere near the price they would otherwise. Some producers, just set up for instant, accept that and do it in vast bulk.”

Instant suggests all coffee will last for ever, even through a nuclear holocaust. “Not so,” says Stuart. “Fresh coffee is fresh coffee. Beans are good for a month stored carefully, but you start to lose gases from ground coffee after two minutes of grinding.

“Buy beans fresh, grind just before using and you’ll have a really good cup of coffee.

Light, heat, air and moisture all attack beans, so keep them well away from the kettle.

The fridge isn’t a good storage place either.

Though cool, it’s moist and your coffee may taste of whatever else is in your fridge.”

Many customers favour the tang and taste of a specific bean but, as with tea, blending can be fun. “In some ways, blending can produce a drink more than the sum of its parts,” Stuart explains. “Something from Kenya could have a nice bit of acidity going well with some good body from Indonesia. Maybe add some nuttiness from Brazil, too.

“We sometimes look for an estate or a region somewhere in the world offering a lot of the desired characteristics without blending. We try both ways. We are also bespoke blenders for people who know exactly the flavour they want.

“Crops vary with the nature of the season, so slight variations within batches are inevitable.

We happily advise on blends until customers find the taste that suits.”

Customers buying beans should be able to find out when they were roasted. “If people are hiding that information, it’s probably longer ago than it should be,” Stuart advises.

“I treat coffee like a carton of milk and keep my beans no longer than that.”

So in supermarkets, Pumphreys restricts business to a limited amount of retail packs in ASDA. “Other than that, we are competing with most supermarkets on freshness.

They can’t match us unless they roast on the premises.”

Still only 28, Stuart has been savouring the bean for longer than most. “I’ve been packing

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since I was a grasshopper,” he explains.

“Through summer holidays, from the age of eight, I was packing. Before we had racking, I’d pile the sacks and run up and down, fall asleep on them. It might be considered dangerous now!”

Stuart, of Powburn in Northumberland, entered the business full time seven years ago.

Being family, the company is not big on titles.

“We’re all vital. No-one’s above anyone,” he explains. A director, he prefers to be known as the face customers see on entering. He’s also website and internet specialist, and trains people in cafe expertise.

His father, Stuart Wilson Archer, roasts and deals with day-to-day issues. Sister Paula markets the business and maintains machines.

Cousin Sarah is on packing. Uncle Malcolm, of Darras Hall, is crucial as head roaster, cupper (taster) and coffee sourcer.

He globetrots farms, sampling. The world’s major markets are London and New York and Pumphreys forward buys through brokers who take prices above New York’s mark. Purchases are shipped to Hamburg, then Southampton and trucked to the North East.

Stuart Lee believes office standards of coffee making would rise if the hotels and restaurants where bosses entertain had sommeliers of coffee, as they do of wine.

“Too many of these establishments regard coffee as an add-on, not something in its own right. They often have a problem of staff turnover, so coffee making falls at the very end to someone who has served the meal.

“In short, there’s not so much effort. Also, the establishments often want to turn over the tables fast. Yet there’s so much scope for someone who can brew coffee properly. It promises as much, percentage-wise, as the food does.

“Some places I go to do everything wrong preparing coffee. For me, it’s akin to a beef farmer knowing how his beef should be served but, on eating out, finds someone is burning it.”

The wine sommelier can entertain with talk and taste of a wide variety of wines. A coffee sommelier could do likewise with coffee beans, then blend them for further appraisal.

Now that would seal any good business deal, surely. ■

SUMMER 09

COMPANY PROFILE

DEVELOP YOUR WORKFORCE AND YOUR BUSINESS

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MPLOYERS who invest in the skills of their employees will be in a much stronger position once the economy improves.

Businesses that grow their own workforce benefit from motivated employees possessing the specific skills that they need to compete.

One way that employers can show their commitment to workforce development is by making the Skills Pledge. Driven in the region by the Learning and Skills Council (LSC) North East, the Skills Pledge aims to encourage businesses and organisations to commit to staff training and development.

Tyne and Wear based company, New Skills Consulting, is one of a growing number of North East companies that have made the Pledge.

Founded in 2005, the company is an ambitious and growing economic development consultancy,

Clockwise from left: Helen Joicey, Ian McKinnon, Chris Russell, Claire Graham, Peter Graham and Lucie Edwards committed to supporting the acceleration of regeneration in the North East.

New Skills Consulting managing director Peter Graham said: “As a company whose activities focus on promoting skills and business development, we recognise the importance of investing in people

and supporting them to reach their full potential.

We are focused on providing an excellent service to all of our clients and this means having enthusiastic, skilled and motivated staff.”

Employers that make the Skills Pledge have access to a Skills Broker through the LSC’s Train to Gain service to help them identify their training requirements and come up with an individual action plan tailored to their needs.

Chris Roberts, interim chief operating officer, LSC added: “There is a clear link between skills training and improving a business’s chance of survival in an increasingly competitive marketplace. There are huge advantages for employer, employee and for the region in raising skills levels.”

For more information on how to make the Skills Pledge visit www.lsc.gov.uk/skillspledge or call 0800 015 5545

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ENTREPRENEUR

SUMMER 09

STAR

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At 7ft 1ins tall, Richard Metcalfe was a tower of rugby strength for Newcastle Falcons and Scotland.

Now he’s a pillar of encouragement to men’s, women’s and children’s teams in a host of sports through the sense of identity his sports kit instils.

This rare breed of player, capped by two nations, should have been living off rugby still and, at 35 he remains, in his own mind, “a wee snip of a lad”. But a cruel injury forced early retirement and the need to re-think his

SUMMER 09

ENTREPRENEUR

QUALITY Richard Metcalfe’s international rugby career was cruelly cut short, but now he’s a major player in customised sportswear.

Brian Nicholls joins him at his Cramlington factory game plan. Hence, in the past four years he has, with his brother Mark, 42, and their co-director Craig Steven, have built Orion Teamwear - a company employing 13 which has doubled sales annually since start-up and which is likely to achieve more than £1.7m this year. It is main rugby kit supplier for the likes of Blaydon, Moseley in the English first division, and the cream of players from independent schools who make it into their teenage version of Barbarians.

In football, it equips leading North East junior clubs like North Shields and Cramlington. It is niche-building in grassroots with a bespoke service for even the youngest of sides.

Metcalfe has bounced back from bitter disappointment and, as a team sportswear provider, he expects five years hence to have sales up to £10m and his employees up to 40.

When he was told by a hospital consultant that he would be crippled with arthritis within three years if he ever played professional rugby again, he reluctantly stepped down.

That was six years ago and, like many professional sportsmen, he had seldom thought of what he might do when the glory days and the cheers of the crowd faded.

Married with two young children, he needed an alternative. “I worked for another business also in sportswear manufacturing,” he says, “but the company wasn’t for me. When you’ve played rugby for 10 years professionally and built a reputation, you don’t want to lose that working on the back of someone else.

Customers kept saying if I ever set out on my own they’d move with me. It sank in. I thought I could do it better.

“Working for someone else, you find things out of your control, whereas as a professional sportsman things are in your control. You can train. You can play. For me, a start-up seemed a natural progression into working life.”

Small business, however, was not a family tradition. “I think I’m the first in our family to say, ‘right, let’s give this a try’.”

Metcalfe accepted a friend’s offer of a room in his office premises at Gosforth, where he and his wife Kate and children Olivia, nine, and Max, six, also live. By the time a phone line was installed, he was making inroads into the lucrative sector of sportswear manufacture.

“We set off with me on my own with a bag and an email, and Mark invoicing.”

Metcalfe soon realised that manufacturing

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wholly in the UK could be cost prohibitive, so all the basic manufacturing is done in China, with the value added, such as club badges, made in Cramlington.

He explains: “We have partners where we have our production lines, and we control everything from start to finish. Running factories isn’t for us, but we do have a long-term relationship there.

“Everything is to our specification. We travel to the Far East every five weeks. It’s quite easy, and in-house here we have embroidery and heat-sealing machines and presses. We finish the items with the personalisation.”

The Chinese work is spread over three factories. “As we grow, we don’t want all our eggs in one basket. If one factory goes down with problems, we can move work to another one,” he explains.

But how does one trace reliable partners in a vast Chinese population? “It took a long time to pinpoint them,” he says. “It was a case of going there with my rucksack, walking round, finding the factories, and knowing different people. Some family friends involved in sourcing at the time helped us. From there it has been a progression. When we visit >>

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China or other Far Eastern countries, we take time for research and development, and for finding other factories for the future. It’s exciting; you’re always looking at new things.”

Big brands like Adidas will not be confronted, though. “They are leisure brand people. You go to them for a replica shirt and tracksuit bottoms. We’re mainly into schools and universities, where sport is actually played and people want value for money. Because we’re flexible, a good team, and our fingers are on the pulse, we can move things quickly.”

Within five to seven days, in fact. Of his business rivals, Metcalfe says people are sick of buying kit designs, only to find them discontinued a year later.

“We say to clubs, ‘why don’t you design your own identity?’ We guarantee to keep those designs as long as they want. We have just won over Newcastle University so are supplying for all their sports next year. “We’ve

ENTREPRENEUR

It’s exciting that we’re sampling kit for a crew that for the last two years has been in the country’s top two

just had their rowing team here. We’ve never done rowing before and the guys came in, showed us the products they use, and we’ve been doing R&D with them.

“It’s exciting that we’re sampling kit for a crew that for the last two years has been in the country’s top two. Nobody in the North East does this kind of business to the extent we do it on professional fabrics and garments.”

After a year at Gosforth, the business moved to a Cramlington unit, moving again 18 months later, still in Cramlington, but

to purpose-built premises on Nelson Park Industrial Estate, with a showroom and production space enough to grow in the future.

“We cover virtually all sports, which is unique in its own right,” Metcalfe points out.

On the new website, for which he lavishly praises ZebraHosts of Newcastle, he says people can go online - whether for tennis, hockey, badminton, rugby, netball or football.

They can pick a design and team colours, then download, add sizes and order. “It’s a >>

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ENTREPRENEUR tool helping customers to design their own corporate identities,” he says.

Originally, Orion was set up to serve rugby, but it diversified by demand. Now it provides balls and other equipment for numerous sports, using major manufacturers. The maker of Gilbey balls for international rugby, for example, makes balls for Orion.

Initially, Orion was regionally focused, but this year it has, says Metcalfe, “gone through the roof” nationally, through a seven-figure, threeyear contract with Trutex, the UK’s biggest independent supplier of school and teamwear.

Trutex, of Clitheroe, Lancashire, founded more than 100 years ago, has a school customer base of 1,200, and includes a Fairtrade range.

Metcalfe says: “We can now look forward to being a national and an international brand.

SUMMER 09

We’re getting overseas orders already, dealing with Dubai and with orders in Europe. In the next two years, we want to push further there.”

The website should help. But has the recession hit? “Yes and no. This time last year we would have had a lot more orders in place, whereas customers are holding off a bit now until they have to buy. Invoice payments are also affected. Gone are the days when people would pay on time. We’re the same, so it’s swings and roundabouts.

“You just have to get into the mentality of chasing your money regularly. We’re fortunate; the people we deal with are mostly clubs, universities, schools - they’re not businesses inclined to hold back payment.”

What motivates him? “Seeing a little lad

walking around Newcastle with an Orion top on. Also, I love coming to work to see what we can do today to help another club, another player, feel proud.

“Any professional sportsman will tell you that one of the best things is turning up for the first pre-season training and getting your huge bag of kit; it’s something to be proud of.

It’s about having that identity, feeling part of something with your team mates.

“If you get off the bus looking smart and the other team don’t look as good, right away you’ve got the first five minutes on a free ride, because they think, ‘if they’re looking this good, they must be good at playing’. Kids want to be a part of something and be proud of playing for someone - whether it’s football, netball, cricket or hockey.” ■

Picking holes Only a faint accent confirms that Richard Metcalfe, though capped for Scotland, hails from Leeds. At 18, the second row forward, obviously an asset in lineouts, moved to Newcastle to play for what was Newcastle Gosforth before the game went professional. He was the first player to sign for Falcons when professional status came.

He played for them until they won the Premiership League in 1998-99, then played for Northampton Saints for two years when they reached the Tetley Bitter Cup final and won the European Cup. “It was marvellous to play with the likes of Matt Dawson, Federico Mendez and Tim Rodber,” he says. “I played with them week in, week out.”

Then he got a phone call from Ian McGeechan, the Lions’ current chief coach, coincidentally another Leeds man with Northampton associations. He had also played for Scotland before running its team.

Metcalfe’s grandparents were Scots, he had already been picked for Scotland, and Ian said, would he also play for Edinburgh?

Metcalfe had already played for England Under 21s and England A. He discussed the offer of a Scottish cap with his family. “Martin

BUSINESS QUARTER | SUMMER 09

Johnson was playing for England then, and I thought if I got caps for England they would be very limited, so why not Scotland?”

Metcalfe, his wife Kate and a little Olivia moved north. “It was the best decision I ever made. I loved playing for Scotland. My first cap was in 2000. We were down for the wooden spoon and it was against us. It was driving rain on the day. It was a huge day, rugby-wise. Backs against the wall, we did really well and beat England. I had another 10 caps after that.”

He also played for Edinburgh for three years until 2002. “Then I had one year at the Borders and, unfortunately, a routine operation after a knee injury went wrong.”

Five operations later, at 29, his playing career was over. “The decision was made for me.

I was at the top of my game, playing for Scotland. But I had two young kids by then.

I didn’t want to be walking round with arthritis at 32. We moved on.

“It was one of those unfortunate things that come to try us. We came back to Newcastle - my wife’s family are from here - and we’ve never looked back. I shall always class Newcastle as my home. It’s where my friends, family and everything else is. Little Max was born in Scotland, a fully fledged Scot, so he can play for Scotland one day if he wants.”

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He does admit, however: “It’s horrible when you finish playing and you’re on the sidelines and still only 35. I could still be playing. I miss the roar of the crowd. Playing for Northampton Saints at Franklin’s Gardens was an amazing experience, but nothing compared with running out at Murrayfield in front of 68,500 singing the national anthem.

“It’s something you can’t explain - what it feels like to run out and the entire crowd are roaring. The noise is deafening, unbelievable.

You’ll always have memories of that and you’ll always wish you could do the same again. But time moves on.

“After two years of retirement I still thought, while watching games, ‘I could be doing that - that could be me’, then you’ve just got to let it go and think, ‘this is my life now’ - and I have got a fantastic life.”

Besides running a successful business, he’s increasingly giving back to rugby. He helps Northern coach Dave Guthrie with the club’s U7s, who include young Max. He also helps a few clubs and schools with their coaching sessions, and may help Dave further with Northern seniors this year.

And of course he’ll always be free to pick holes in Falcons and Scotland when they fail to meet his expectations. “I’m a picky supporter.

I like picking holes,” he laughs.

Learn from each other.

“If I hadn’t become a member of the Entrepreneurs’ Forum, I don’t think I’d ever have had the confidence to go for our recent acquisition.”

Derek Curtis, founder of Bond Solutions who grew the business by acquiring On Site Marketing Solutions.

To read more about Derek’s story visit www.ifwecanyoucan.co.uk

There are plenty of people out there who will share their time generously. It’s this generosity and altruism that the Entrepreneurs’ Forum is built on and is attracting interest from many quarters around the rest of the country.

For more information call 0870 850 2233 or visit www.entrepreneursforum.net

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RAISING THE STEAKS!

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- John A. Quelch Harvard Business School Professor

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EVENTS

SUMMER 09

BQ’s business events diary gives you lots of time to forward plan. If you wish to add your event to the list send it to: editor@bq-magazine.co.uk.

The diary is updated online daily at www.nebusinessguide.co.uk

JULY

8 OCTOBER NSCA Annual Dinner. Civic Centre, Newcastle (7pm). marie.rice@icaew.com

24 JULY North East England and London, 2012 Olympics and Paralympic - win new business. Briefing at Durham County cricket ground, Chester-le-Street (9am). Contact: Anna Patrick, 0191 244 4031.

Email: annapatrick@service-network.co.uk

14 OCTOBER NECC South Networking Lunch (11am). information@necc.co.uk

29 JULY NECC South Networking Lunch (11am). information@necc.co.uk

21 OCTOBER NECC North Breakfast Club (8am). information@necc.co.uk

31 JULY A songwriter, his songs and his lawyer. Music industry representatives including song writer Steve Thompson, in association with Stockton Riverside Festival and Tees Valley Music Alliance, discuss commercial aspects of the industry.

Comedy tent, Stockton Riverside Festival (1.30pm).

21 OCTOBER NSCA Tax Basics Part II. Ramside Hall Hotel, Durham (9.30am).

Also VAT Update (1.30pm, same venue). marie.rice@icaew.com

19 OCTOBER NSCA briefing, Audit Emerging Issues and Common Problems.

Ramside Hall Hotel, Durham (2pm). marie.rice@icaew.com

28 OCTOBER NECC North Networking Lunch (11am). information@necc.co.uk

NOVEMBER

AUGUST 12 AUGUST NECC North Networking Lunch (11am). information@necc.co.uk

3 NOVEMBER NSCA Tax Update, Ramside Hall Hotel (9.30). Also Accounts and Audit Update (1.30pm, same venue). marie.rice@icaew.com 4 NOVEMBER NECC North After Hours (5.30pm). information@necc.co.uk

SEPTEMBER 2 SEPTEMBER NSCA Finance Act Update. Ramside Hall Hotel, Durham (1.30pm) marie.rice@icaew.com

9 NOVEMBER NSCA Tax Investigations and Enquiries. Ramside Hall Hotel, Durham (9.30am). Also Personal Tax Update (2pm, same venue). marie.rice@icaew.com

7 SEPTEMBER NSCA briefing, Legal Issues Affecting the SME. Ramside Hall Hotel, Durham (2pm). marie.rice@icaew.com

11 NOVEMBER NECC South Networking Lunch (11am). information@necc.co.uk

7 SEPTEMBER Business Networking Racing. Newcastle Racecourse and Conference Centre. Contact: 0191 236 2020 .

12 NOVEMBER NECC Annual Dinner. Civic Centre, Newcastle (7pm). information@necc.co.uk

9 SEPTEMBER NECC South Networking Lunch (11am). information@necc.co.uk

13 NOVEMBER CECA (NE) Annual Dinner. Marriott Hotel Gosforth Park (7pm) members only. Vicki Munro, tel: 0191 228 0900. kellceca@aol.com

16 SEPTEMBER NECC South Breakfast Club (8am). information@necc.co.uk 17 SEPTEMBER BQ Live debate: What are the big priorities for the North East business community to ensure we sustain the momentum generated over the last decade? In the chair: David Bowles, chairman of Entrust, and Brian Manning, chief executive of Esh Group. Bishops Suite, Ramside Hall Hotel, Durham (6pm for 6.30). Contact: The Bridge Club 0191 230 5742. www.bqlive.eventbrite.com

18 NOVEMBER NECC South Breakfast Club (8am). information@necc.co.uk

21 SEPTEMBER NSCA Tax Update. Ramside Hall Hotel, Durham (9.30am).

And Accounting Update (same venue, 2pm), marie.rice@icaew.com

23 NOVEMBER NSCA briefing, Regulatory Threats to Your Practice. Ramside Hall Hotel, Durham (2pm). marie.rice@icaew.com

30 SEPTEMBER NECC North Networking Lunch (11am). information@necc.co.uk

25 NOVEMBER NECC North Networking Lunch (11am). information@necc.co.uk

OCTOBER

20 NOVEMBER Teesside SCA Annual Dinner. Thistle Hotel, Middlesbrough (7pm). marie.rice@icaew.com

Please check with the contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above e-mail address of any changes or cancellations as soon as they know of them.

5 OCTOBER NSCA seminar, Incorporation – When, Why and How? Ramside Hall Hotel, Durham (2pm). marie.rice@icaew.com 7 OCTOBER NECC South After Hours (5.30pm). information@necc.co.uk 8 OCTOBER Lifespan Charity Auction. Lifespan offers care and support to people with serious illness in the community. The Biscuit Factory, Newcastle (8pm). Contact: Nancy Radford 01434 673 777. Email: info@lifespanteam.org.uk

BUSINESS QUARTER | SUMMER 09

20 NOVEMBER NSCA Tax Update for Members in Business. Ramside Hall Hotel, Durham (9.30am). marie.rice@icaew.com

KEY:

Acas: Advisory Conciliation and Arbitration Service, CECA (NE): Civil Engineering Contractors Association (North East), HMRC: Her Majesty’s Revenue and Customs, ICE: Institution of Civil Engineers, NSCA: Northern Society of Chartered Accountants, FSB: Federation of Small Business, Tbc: to be confirmed.

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BIT OF A CHAT

SUMMER 09

Michael Naf (Naf by name, no doubt conscientious by nature) came up with the findings. And, as you might imagine, he’s now offering a profitable - albeit free to you - solution. It’s an online tool called Doodle, requiring no registration. “It also counters the UK’s long hours working culture through which workers lost £26.9bn in wages last year,” he points out, stating that, according to the TUC, around 5m UK employees worked extra hours for nothing in 2008, losing a potential £26.9bn in pay.

Award-winning Doodle already has users in the UK and its homeland Switzerland. So if you don’t find an alternative way to wangling Friday afternoons off try www.doodle.com

with Frank Tock >> Alarm bells UK managers and admin assistants spend an eighth of their working week fixing up meetings and conference calls - or so some character, presumably armed with a stopwatch and clipboard - reckons.

I can’t be the only one wondering why we don’t do something about that, if only to let everyone have a Friday afternoon off.

On average, it’s claimed, we spend five hours arranging seven meetings a week. And UK managers spend more time doing this organising than admin staff. Even then, one in every six meetings is rearranged.

If this research is accurate, the time spent yearly on co-ordinating meetings equates to £3,932 of an average manager’s salary, and £1,886 of an underling’s.

The survey in question suggests the commonest ways to organise meetings are by calendar (32%), email (31%) and phone (22%). As arranging each fixture may involve four to five participants, this helps to explain why three-quarters of professionals spend almost five hours each week - more than half a working day - just arranging things.

If you’re a masochist but would still like to do something for your beloved and beleaguered country, then consider that with more than 4.3m managers in the UK, the annual economic cost to the UK of all this time wasting is £16.3bn.

BUSINESS QUARTER | SUMMER 09

Perhaps though, Ken has an irresistible formula for success. What about deep-fried stotties for the Scots this time? Or jam and clotted cream-filled ones for the South West, where Greggs is planning to make inroads?

Cornish pasties into Cornwall, now there’s a brave man ...

>> Taxi?

If we really wanted to help our business visitors get around the region more easily, we’d learn from many big cities abroad and insist on all our taxis being painted some flamboyant and unmistakable livery – be it orange, claret and amber or purple with orange spots.

So many black cars fill our roads now that spotting the taxis among them can be frustrating, yet you certainly know a New York taxi or a Mumbai cab when you see one. How about black and white stripes for Newcastle, and red and white for Sunderland? Suggestions please ..!

>> Whatever next?

Deep-fried stotties?

It’s hardly surprising Greggs’ sales are 2% up on recent reckoning. If that bakery chain can’t see a silver lining through recession clouds, who can?

Interestingly, it is now promoting stotties beyond their native North East. It’s the first major marketing diversification I can see since new chief executive Ken McMeikan succeeded Sir Michael Darrington.

Indeed Mike (“call me Mike or Sir Michael but never Sir Mike, please,” he once implored) did try to spread stottie appeal geographically before, but even the Scots, with tastes akin to this region, seemed to prefer their potato scones.

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>> Making ends meet There is a beggars’ recess sometimes fitted out with cardboard near the entrance to Central Station in Newcastle.

There, a down-and-out young man appears to have been displaced recently by a clean shirted and generally quite well turned out middle aged man who, sitting there, clearly still carries a shaver and may even visit a barber. He’s articulate, too.

Understandably, he begs, more than anything else, the question of how he got there. I thought maybe he was a News of the World reporter gathering first-person experiences of how miserly we can all be.

Then I thought maybe he was from customer relations at Network Rail, simply sitting at the spot to keep the beggars away; a sort of piranha in a goldfish bowl.

But then it suddenly struck me.

Of course - a displaced investment banker! (and no, that’s not him in our picture)

SIMPLY STUNNING OFFER FROM MILL VOLV0 VOLVO XC60 DRIVE S £350 A MONTH

SPEC

£21, 495

Life is better lived together

IAL M

ILL P

RICE

VOLVO XC60 DRIVE S THE XC60 SPLICES TOGETHER THE VERY BEST OF BOTH WORLDS. CROSSOVER SIGNALS LIKE 20-INCH WHEELS, ACCENTUATED WHEEL HOUSINGS AND ALUMINIUM SCUFF-PLATES EMPHASISE UNMISTAKABLE XC MUSCULARITY. WHILE ABOVE THE WAISTLINE, SLEEK WINDOWS AND A DRAMATIC ROOF LINE TRACE THE PROFILE AND SPORTY CHARISMA OF AN ELEGANT, SEXY COUPE. IT HAS THE LOOKS TO STOP TRAFFIC BUT IT’S ALSO A CAR THAT STOPS ITSELF THANKS TO CITY SAFETY, AN INGENIOUS LASER-BASED SYSTEM THAT APPLIES THE BRAKES TO HELP YOU AVOID LOW SPEED COLLISIONS. ARRANGE AN XC60 TEST DRIVE AT ANY MILL VOLVO DEALERSHIP.

VOLVO XC60 DRIVE S 5 DOOR ESTATE 2.4 MANUAL 175PS DIESEL

Special Mill Volvo price on the road

£21,495.00

Customer Part Exchange/Deposit †

£1,437.29

Mill Deposit Contribution

£1,000.00

Balance To Finance

36 Monthly Payments of

£19,057.71

£349.98

Optional Final Purchase Payment

Total Charge for Credit

£10,187.00

£3,948.57

guaranteed future value

includes a £95.00** purchase fee and £125* facility fee

Total Amount Payable (includes documentation fees)

£25,443.57

APR

9.0%*

*Offer based on a Volvo XC60 DRIVe S 5 door estate 2.4 Manual 175PS Diesel. Contract mileage 12,000 per annum, excess mileage charged at 0.14p per mile***. Optional extras available at extra cost.

Price includes £2,000 part exchange deposit contribution and dealer discount, normal mrrp £24,995.

†

MILL GARAGES about Customer Service Mill Hexham Bridge End, Hexham NE46 4JH. Tel: 01434 605 303

Mill Sunderland Wessington Way, Sunderland SR5 3HR. Tel: 0844 470 4364

Mill Newcastle Scotswood Road, Newcastle NE15 6BZ. Tel: 0844 470 4393

Mill Stockton Preston Farm Business Park, Stockton TS18 3SG. Tel: 0844 470 4381

Mill Harrogate Grimbald Crag Road, St James Retail Park HG5 8PY. Tel: 0844 470 4373

FUEL CONSUMPTION FOR THE VOLVO XC60 RANGE IN MPG (L/100KM): URBAN 28.8 (9.8) TO 16.5 (17.1), EXTRA URBAN 45.6 (6.2) TO 31.7 (8.9), COMBINED 37.7 (7.5) TO 23.7 (11.9), CO2 EMISSIONS 199 TO 284G/KM Finance subject to status. Guarantees/Indemnities may be required. *Payable with your first monthly payment. **Payable with the GMFV if you wish to own the vehicle at the end of the agreement. Further charges may be made subject to the condition of the vehicle, if the vehicle is returned at the end of the finance agreement. *** Payable if you wish to return the vehicle at the end of the finance agreement and the agreed mileage has been exceeded. Volvo Car Finance SL7 1YQ.

www.millvolvo.co.uk www.driveavolvocompanycar.com

103248_BQ_06_09_XC60

TESTEDÂ BEYOND

ENDURANCE

ALT1-C/CR/07

Bremont is a British company making beautifully engineered mechanical timepieces that are hand assembled by their watch makers at their dedicated atelier in Switzerland.

www.bremont.com tel: +44 (0) 845 0940 690

47-48 Eldon Garden Newcastle upon Tyne NE1 7RA 0191 232 0788 info@richardsintonjewellers.com www.richardsintonjewellers.com