Fayed: a tycoon consumed by his troubles

The Harrods owner, who spent millions seeking the truth about his son's death, now needs to focus on his business empire
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The Independent Online

To some he is the pharaoh of fantasy, a conspiracy theorist and a man obsessed with defeating the British Establishment. To others, a grieving father who had fought for a decade for what he believed was the truth and has now come to the end of a long and bitter road.

Mohamed Al Fayed's speech, abandoning his 10-year quest to prove that his son, Dodi, and Princess Diana were murdered by the security services, marked the nadir for the Harrods tycoon. He's at a point lower than the moment, in 1989, when the Department of Trade and Industry inspectors appointed to investigate the takeover of House of Fraser, including its flagship, Harrods, remarked on Fayed's "capacity for fantasy... and the large number of lies he certainly told us".

In strikingly similar words at the weary conclusion of a six-month inquest, Lord Justice Scott Baker described Fayed's theories about the deaths of Princess Diana and Dodi as "worthless" and without evidence.

The inquest cost more than £10m and seems to have achieved one small thing: Fayed has now given up his quest to indict the "Nazi" Prince Philip – the man "who really runs this country" – for the wilful murder of the couple. Yet far from being able to recover from this exhausting pursuit, Fayed faces a difficult few months across his business interests.

There is his beloved Harrods store. Despite losing its royal warrants in 2000 and managing to attract only B-list celebrities like Lily Allen to open its latest sales, the blue-riband store is at the heart of his commercial empire.

In the current economic downturn all but the wealthiest consumers will be spending less. In the 53-week period to 3 February 2007, Harrods Holdings – the main Fayed company – recorded pre-tax profits of £34.8m, a modest improvement on the figure (for 52 weeks) in the previous year of £25.8m. The figures would have been better except for interest charges of some £55.3m, compared with less than half this at £25.1m in the previous year.

These figures are scarcely earth-shattering for such a prestigious store, but the underlying trend is even more worrying than this. The figures for 2006 show a cumulative loss of some £72.1m. By 2007 this had been transformed into a profit of £353.7m because of a gain on the sale of properties of £426.1m. But the properties in question were only sold to a fellow-Fayed vehicle, Harrods Property. This new company has yet to file accounts.

Ten years ago Fayed was enthusiastically talking up a proposed flotation of 25 per cent of the Harrods group for £500m, which would have valued the whole of the company at around £2bn. Last year's Sunday Times Rich List valued Harrods at just over £400m and Fayed's total wealth at £507m. In the event the flotation was pulled, but the respective figures tell their own story. It may be argued that one reason for the decline in the value of Harrods is that Fayed and his brothers have been paid more than £250m in dividend payments over this period.

One motive for those hefty dividend payments was Fayed's need for cash to fund his numerous other enterprises. The Ritz Hotel in Paris shows a cumulative loss of €136.4m (£109.5m) according to the last available accounts for the hotel. And a bank loan for €109m will have to be refinanced before May 2009. Again the global credit crunch and recession in the USA do not bode well for bookings at this "exclusive" hotel.

Then there is Fulham Football Club – another cash-devouring hobby of Fayed's. Latest accounts for Fulham Football Leisure show a cumulative loss of some £150.2m. Virtually all of this loss has had to be provided by Fayed.

Worse and far more damaging to him is the fact that, barring miracles, Fulham are likely to be relegated from the Premiership this year. If they do go down, Fulham will lose the all-important TV income that Premier League status brings with it. His boast that he would make Fulham FC "the Manchester United of the South" rings a little hollow with some supporters at Craven Cottage.

Finally, there is the huge cost of his investigation into the deaths of Dodi and Diana. Conservative estimates suggest that he has spent the best part of £10m in his doomed quest to indict the Duke of Edinburgh. His QC at the inquest, Michael Mansfield, is estimated to have been paid some £675,000, and there have been payments to private detectives and PR personnel.

The greatest cost, however, may be that paid by the man himself. Friends say that Fayed has begun to look his age and much of his previous irrepressibility seems to have evaporated. He now says: "I am leaving the rest for God to get my revenge". His own energies are urgently required elsewhere.

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