The Hilary Clarke Interview: An East End boy pulls Rank

Hilary Clarke meets Mike Smith, the leisure giant's boss, who has inherited a mountain of debt

The admits to being "a West Ham man", to getting "all the difficult jobs". But gleaning other snippets of information from Mike Smith, the new chief executive of Rank, is an uphill struggle. I suppose you can't blame him.

Almost every business the leisure giant owns, from the Tom Cobleigh pub chain and Odeon cinemas to Butlins holiday camps, has been the target of sale speculation over the past few months as the group looks to slash its pounds 1.26bn debt pile.

"Don't expect me to say anything, for a whole variety of reasons - not least because nothing is set in stone yet," he says.

"Whatever I say publicly can only be damaging. It either upsets my management, upsets my employees, upsets my customers or undermines my negotiating position," he adds.

In fact, he denies any of the companies has the definitive "for sale" sign attached.

Even so, Smith had some bad news to deliver when he faced investors for the first time last week since he joined the company in April. The company cut its interim dividend by a third and announced a pounds 50m cost-cutting program.

Pre-tax profits for the group fell from pounds 82m to pounds 30m after pounds 50m of exceptional costs.

When I meet him, Smith is dressed casually in beige cotton trousers and a blue shirt. He puts a tie on for the photographer, bringing in three and asking me to choose. He says he keeps a few suits in the office, just in case he needs to wear one. The interview's in the office soon to be occupied by the new finance director, Ian Dyson, formerly financial controller at Hilton hotels, where Smith's on the board. Smith will not let me see his office. "It's a working office, its a mess," he says.

In fact, he doesn't spend much time shuffling paper, preferring to be on the road visiting Rank's businesses around the country. "It's much better if I deliver the message face-to-face. It's more effective like that," he says.

Dyson's appointment, and the departure of the two men whom he replaces - Nigel Turnbull and commercial director Douglas Yates - represents Rank's final purge of the old regime.

It was in a room downstairs a couple of days earlier that Smith informed his staff of imminent job cuts - 465 in all, mainly in the middle management strata or, as he puts it: "Any one who doesn't work in a cafe."

You couldn't get a more contrasting background and management style that those of Smith, Rank's third chief executive in four years, and those of his predecessor Andrew Teare. Teare, who resigned amid criticism of a poor performance and a falling share price, was very much in the public school-boy mould, infinitely more comfortable at the opera than at a sing-along in a holiday camp.

Smith's working-class credentials, on the other hand, are about as bona fide as they get - even though he admits to going to Pontin's not Butlins as a boy where he "used to chase the girls along the cliffs". He grew up in Plaistow, in east London, the son of a printer: "You were either in the docks or in the print." As it happens, the young Smith was taken under the wing of the other big employer of the area - the local benevolent dictator at the time - Ford Motor company.

"I'm a Ford man. Ford took me off the streets," he says bursting into laughter. He went to the local secondary modern school, Lister, for which he is full of praise. That was in the Sixties "when education was the big thing". He was practically head-hunted by Ford. "They took a boy from the school onto a management course a couple of years before me and he did very well. So they came back and asked for another one."

He spent six years at Ford before moving to British Leyland in 1971. "I love the car industry. I still love cars," says Smith, who drives a Jaguar.

Later he went to Cranfield School of Management where he studied for an MBA before returning to Leyland. In 1984 he made his biggest career change when he joined Grand Metropolitan where he held a number of senior positions including managing director of Express Dairy.

It was at Grand Metropolitan that Smith first got a taste for the leisure industry when he oversaw William Hill, the company's bookmakers division.

Then he took up his first chief executive role at Bowater, the printing company, before moving to Ladbrokes to fill the top slot there in 1994. His time at Ladbrokes was seen as steady, with Smith only hitting the headlines when he was awarded a 98 per cent pay rise.

Things couldn't be more different at Rank. This son of the East End has been in Los Angeles a lot lately, mixing with the stars. Rank owns the Hard Rock Cafe chain and half of Universal Studios. One of his first assignments was an exclusive preview of Universal's new $2bn Florida theme park, "Island of Adventure". There he rubbed shoulders with the likes of Steven Spielberg and Michael Douglas. I can't imagine Smith is the type to be phased by the glitterati though.

"A lot of my mates are still in the East End and, er, perhaps I should go off the record here, I still prefer having a drink in low-life bars," he confides.

Smith is reluctant to say anything about his private life. He won't even tell me how many children he has, although I find out later he has two daughters and a son. I also manage to extract from him the fact that his sister and mother live in Essex, and that he lives in the "London area". "I'm very protective of the people in my orbit," he says.

He is going to find it tough staying out of the limelight over the next few months. A big restructuring of the company is inevitable. While most of the speculation so far has hinted at the sale of Rank's smaller assets, most analysts believe he will have to let go of a big fish if he is to succeed in injecting a new glow into Rank's financial health.

Some have suggested he might opt to sell the group's video duplication arm, Deluxe Entertainment Services. Yet despite its notorious failure to cope with demand for the blockbuster Titanic last year, Smith seems impressed with the business. The man who heads the company, Phil Clement wandered in during our interview.

"I have to be nice to him. He's an important man," jokes Smith. Deluxe probably has the biggest growth potential of all the groups assets. More likely to be on the market soon is the company's 50 per cent stake in Universal Studios, Florida. Seagram, the drinks-to-movies conglomerate, owns the other half.

"The existing agreement with Seagram foresees that in May 2001 we can part if we wish," says Smith. "We are working with Seagram now to see if there is a way of unlocking cash, be it by divesting or whatever. That's not to say it will happen tomorrow." Rank's stake is valued by analysts at pounds 440m.

With a 28 per cent share in a growing market, the Odeon cinema chain is unlikely to come on the market for a while too. As for Hard Rock, isn't the brand becoming a little jaded?

"Everyone has a view on Hard Rock. I would say it has seen off the other brands: look at the trouble Planet Hollywood is in. Music is a huge attraction to people: I think music will see out the Rain Forest," he says, referring to the rain forest-themed cafe in Shaftesbury Avenue.

He'll have done his job if he sees off the company's debt.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones