Profile Dickson Poon: A silver spoon and a silver tongue

The owner of Harvey Nichols has got his way again, says Stephen Vines

Dickson Poon is used to getting his way. For years he has been hailed as the retailing industry's wonderkid. It was his magic touch that revived the fortunes of Harvey Nichols and, presumably, it was the same magic that recently persuaded shareholders in Dickson Cocepts to sell Harvey Nichols to his private company for what many consider a very modest price.

This week it may become clear just what a bargain he has arranged for himself when Harvey Nichols releases its results for last year. As for the shareholders in Hong Kong-listed Dickson Concepts, they are left with a mass of Asian designer label retail holdings all deeply immersed in red ink.

Yet Poon made his name in Asia by being among the first to realise that the emerging Asian yuppie class had a deep thirst for designer-label goods and would not mind paying very fancy prices to be covered in creations by Charles Jourdan, Ralph Lauren and Guy Laroche.

When he took over Harvey Nichols in 1991 he promised that there would be "no dramatic or immediate changes" to its management. A year later, Dick Maney, the managing director, was replaced by Joseph Wan, Dickson Concept's group finance director. Amanda Verda, the fashion director, went through the door marked exit soon after. However, the biggest about- face came this year, just three years after Poon told a Hong Kong newspaper: "Our vision is to be a company based in Hong Kong with a major presence in each international market place around the world."

That vision has now been junked, at least as far as Dickson Concepts is concerned. The company is now a purely Asian entity with no immediate prospects of returning to profitability.

Poon is, as usual, quite unfazed by all this. "I am totally confident that the Asian assets will again show strong growth in profits once consumer demand in Asia recovers," he said after learning that shareholders had approved his takeover plans.

Poon had structured his offer skilfully. He knows Hong Kong investors like he knows the yuppies who buy his clothes. The sweetener in the deal was a special dividend equal to almost two-thirds of the share price. This meant a short-term gain for recent buyers of Dickson shares, even though it failed to compensate for the sort of sums a third-party buyer would have had to pay for a business like Harvey Nichols.

But long-term vision in the Hong Kong stock market is measured in days rather than months, and money on the table is always viewed as more precious than money to be gained in the longer term. This is one of the golden rules of Hong Kong's stock exchange, well understood by all who play the market.

Poon is not typical of most Hong Kong entrepreneurs. While many others travelled down the rags-to-riches road, Dickson glided smoothly from the gates of Uppingham, an English public school, to university in Los Angeles and a spell in Switzerland learning the watch trade that had made his father's fortune.

He was part of a Hong Kong brat pack that included the son of the cinema and property tycoon Deacon Chui. On one of their outings, Dennis Chui knocked down a policeman in his car, and dragged him along the road for almost a mile. Chui was later found guilty of manslaughter. Poon and two women had been with him in the car.

This experience may have been a turning point for Poon, making him realise that he needed to be more than just another rich kid riding on his father's coat-tails. Fortunately, he did not have to start from scratch when he opened his first watch and jewellery shop in 1980. His father had given him half a million pounds to get going. Within a year he was poised to enter the high fashion business with a franchise from Charles Jourdan.

From then on, Poon's progress seemed to be unstoppable. Dickson Concepts entered 1999 with 185 shops and concessions throughout Asia, and franchises covering some of the biggest names in the fashion business, not to mention a dabble in selling Warner Brothers studio products. Innovative marketing also made Poon a force in Asia's watch and optical retail trade.

Were it not for the onslaught of the Asian financial crisis these shops might still be making money. But times are hard and something has to give. So the discerning buyer who just had to have a Ralph Lauren T-shirt is now settling for something much cheaper.

As a result, the Asian stores are losing money in spades. Poon recently unveiled results for the six months to September 1998, which showed a much higher than expected loss of HK$291m (pounds 23m). This compares with a HK$196m (pounds 16m) profit for the previous year. Had it not been for Harvey Nichols, which is still pumping out money, the loss would have been even higher.

It was Poon who turned Harvey Nichols around and confounded the critics who thought that the hapless Hong Kong company had been sold a pup by the Burton group.

However, Poon's magic touch has done nothing for his other acquisition, the ST Dupont group, a tired French luxury goods label that needs pounds 115m to put it on its feet. The words failure never cross Poon's lips; he is more comfortable with business-school buzz words such as "restructuring" and "refocusing".

Moreover, he is frequent visitor to the courts of law when he falls out with business partners. Burton, for example, was taken to arbitrators to cough up pounds 1m, which Poon said had been overpaid for Harvey Nichols' stock at the time of the takeover.

Last year he sued the Hong Kong Jockey Club and an apprentice for causing the death of one of his horses and launched a HK$40m (pounds 3m) suit against a Hong Kong hotel group for causing a three-month delay in the opening of a Tommy Hilfiger boutique.

But before he got busy suing, a Singaporean court found against him for having underpaid a business partner for his share in a fashion company after he bought out a business they both founded.

It is not only business partners that he has problems with. He has a knack of losing wives. He is now living with wife number three, Pearl Yu, the daughter of another rich Hong Kong family and a former stockbroking analyst. Unlike Poon's mother, who built up her own stockbroking business, Poon's wife no longer works. He does not appear to like working wives. That was why wife number two, Michelle Yeoh, a Malaysian Chinese actress and kung fu star, quit her job. When she left Poon she became better known as the latest Bond girl.

It will be interesting to see whether the old Poon magic will make a comeback in Asia. But it is hard to ask him about these things. After a brief moment of public exposure during the privatisation period, he has scuttled back to the security of his austere well-guarded office and is not answering many questions.

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