Top 50: Upwardly mobile

Mobile phone retailer DX Communications topped our survey of private companies by growing at an annual rate of 164 per cent. Roger Trapp talked to the firm's founder, Richard Emanuel
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The Independent Online
If Richard Emanuel's parents were disappointed in him for not going to university, they should have got over it by now. The business he founded when many others of his age would just have been emerging from their studies has this weekend become the fastest-growing private company in Britain, according to the ninth annual survey by the Independent on Sunday.

The league, compiled in association with the business forum KITE, found that Mr Emanuel's company, the mobile phones retailer DX Communications, was top of an impressive list of entrepreneurial businesses as a result of growing at a staggering annual rate of 164 per cent for the past five years. Nor has it stopped there. Its turnover has moved on from last year's pounds 37m to pounds 62m in the year just finished, and the projected figure for the current period is about pounds 120m.

DX Communications' success puts it alongside other telecommunications companies that have featured strongly in the listing over the years - notably The Carphone Warehouse, which appears this year in 16th place with a still impressive turnover rise of 68 per cent, to pounds 159.6m; The Caudwell Group, which is 39th this year with a 30 per cent rises to pounds 263.2m; and European Telecom, which topped the rankings two years ago before floating on the stock market. It also places it in the same company as such early stars of the listing as the pubs chain JD Wetherspoon and the transport group Stagecoach.

With 140 stores spread across Britain, DX has certainly come a long way since 1991 when, at the age of 23, Mr Emanuel put up his savings of pounds 1,300, persuaded the Bank of Scotland to lend him a few thousand more and began selling what were generally still bulky mobile phones to small businesses. Two years later he opened the first mobile phone shop in Scotland and for the past six-and-a-half years has opened another outlet every few weeks. Having already launched a mail-order operation, from tomorrow the company is offering the phones for sale over the internet.

The core business is the mobile phones retail operation, explains Mr Emanuel. But that is supplemented by the other two distribution channels and a general support service.

Such planning is part of a well-ordered approach to the business that he has sought to impose from the start. Pointing out that high-growth markets like mobile phones can encourage "a fast-buck mentality", he says he has taken "a long-term approach to developing the business". Accordingly, he has invested in the infrastructure, bringing in "a super management team" early on.

Mr Emanuel has also worked hard at developing people - seeing them as vital to the success of a service business such as DX. "First and foremost, it's people. No matter how motivated or able the management is, the system will implode without people," he says.

Though many people in Britain will have only really become aware of the giant US retailer Wal-Mart as a result of its recent bid for the UK supermarket chain Asda, Mr Emanuel read the autobiography of the company's late founder, Sam Walton, some time ago and was struck by the claim that broadening the ownership of the company had been a key factor in the success of the business.

"A lot of UK companies still under-estimate the power of that," he says, adding that he launched an employee share option scheme late last year.

Always keen to get into business, Mr Emanuel left school and went into the leisure business - in defiance of the wishes of his academic parents that he should go to university. Having gained his management training there in the Eighties, he saw "a terrific opportunity" in the telecommunications market and at the age of 21 obtained a job with a company that sold a wide range of products, including cellular phones.

After a while, he came to the conclusion that he could do it better himself and DX Communications was born. "For younger people, it's sometimes easier to take the plunge than if you've got a mortgage and children in school," he says of the decision to go it alone. "In your early twenties you can brush yourself down and start again if it goes wrong."

For the moment, of course, it is a long way from going wrong. While Mr Emanuel's parents are apparently pleased that he appears to have found "a reasonable career", DX is riding a wave that shows little sign of slowing. As he says, though the market has grown very fast and become highly competitive, it is still some way off saturation point. While countries such as Finland have about half of the population using mobile phones, in Britain it is still only about 20 per cent. Moreover, there are developing opportunities in the transmitting of data as well as voice.

Indeed, the breadth of the market can be hard to handle. One minute a salesperson in a store can be dealing with a teenager who just wants a pay-as-you-go phone to keep in touch with their friends, the next they might be serving a business person who travels around the world and wants a range of data applications. As Mr Emanuel says: "It's a great challenge to train people right."

It is for reasons like this that Mr Emanuel is constantly on guard: "I feel we're fairly robust. But we're not complacent."

Aware that the market is likely to contract, he believes it is important to differentiate the company from others, while broadening distribution across the UK. Rivals such as Carphone Warehouse and The Link "have roamed north" from London, while DX has headed south. But there is still much of the country to be covered.

At the same time, the company is "carefully diversifying" by adding appropriate products and services.

"My job is to keep us all humble and the eye focused on the ball," says Mr Emanuel. "If you believe in what you're doing, it's a key factor in keeping fresh and innovative."

Moreover, though there are challenges, he adds: "It's a lot easier to motivate an organisation when it's growing. It's far harder when you're fighting to keep market share."