The sweet and sour times of Alan Sugar

By 1988 Amstrad was making pounds 150m a year. Then Sugar agreed to make Murdoch's satellite receivers. From there it was downhill
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The Independent Online
"This company is mine, those are my initials up there, and it's going to be around for ever." For ever, it now transpires, is a short time in business. Yesterday Alan Michael Sugar Trading, or Amstrad for short, was consigned to the dustbin of corporate history. Alan Sugar, the man who made personal computers affordable and friendly for a generation, is hanging up his boots to concentrate on running Tottenham Hotspur. In the process, Amstrad's founder, chairman and living embodiment is distributing his electronics empire to the four winds.

Mr Sugar, who owns 34 per cent of the company, will be quids in when the break-up is complete. His stake alone could be worth pounds 145m. But Amstrad itself will no longer exist, other than as a vehicle to pursue legal action against two American computer disk manufacturers which the company blames in part for its demise.

It is, as they say, the end of an era. How many millions of consumers got their first taste of the information technology age at the hands of a low cost industry-standard Amstrad PC? How many millions of homes today sport a Sky satellite dish - his other contribution to civilisation? For all that, should anyone mourn the passing of Amstrad or the style of doing business that Mr Sugar came to personify?

Amstrad's rise in the last 29 years from a one-man band selling aerials and reconditioned televisions into stock-market darling and perhaps Britain's best known name in consumer electronics invites comparison with a string of other home-grown business success stories: Branson, Hanson, Conran, Lord King and Arnold Weinstock. But Amstrad and Alan Sugar could just as easily be bracketed with those shooting stars that faded and died: Ronson, Ralph Halpern, John Gunn and Michael Ashcroft.

Whereas Richard Branson has created a truly international brand in Virgin capable of selling anything from records and airline tickets to cola and vodka, Amstrad never repeated the success it had with the PC. It might be harsh to characterise it as a one-product company. But try as he might - and there have been plenty of attempts - Mr Sugar has never worked the same magic with personal stereos, cordless phones, videos, answering machines, faxes or any of the other consumer electronic products that have spewed off the end of the Amstrad conveyor belt. The mere fact that he is prepared to let Amstrad disappear as a company, to be replaced by something called Viglen Technology, speaks volumes.

Whereas Sir Terence Conran has demonstrated the ability to roll his brand successfully from one format to another - design house to restaurant to shopping emporium - Amstrad has failed to re-invent itself in quite the same way. The publicity blurb boasts of "an international electronics, telecoms and computer group with one of the strongest brand names in Europe". If that is so why ditch it?

Lord Weinstock never showed any sign of returning to shareholders the pounds 2.5bn cash mountain accumulated during his reign at GEC, but Mr Sugar is returning Amstrad's more modest pounds 200m cash pile to investors. In other words he has run out of profitable schemes for investing the money and has conceded that his shareholders might have better ideas.

For all that, Amstrad deserves to be remembered for bringing the computer age into the living room in a way that made it accessible and, above all, within the reach of most pockets. Mr Sugar professes not to admire the Japanese, whom he considers lacking in originality. And yet he has pursued a similar blueprint - exploiting products developed by others, manufacturing them as cheaply as possible (in his case in the Far East) and then selling them in bulk at discount prices.

For a while that served Amstrad very well. The company began by manufacturing and distributing hi-fi equipment. With the benefit of a public listing, in 1980, Mr Sugar branched into computing, launching first a games computer, then a word processor system and then, in 1986, a low-cost industry standard personal computer. By 1988 Amstrad was at the zenith of its fortunes, making profits of pounds 150m a year and valued on the stock market at pounds 1.2bn.

A year later Mr Sugar did his now famous deal to help launch Sky by agreeing to make Rupert Murdoch's satellite receivers - a contract that is said to have been worked out on the back of a napkin over lunch. But from there on it was downhill. Amstrad's attempts to conquer the business computer market failed disastrously - the result, according to a High Court judgment last month, of faulty computer disks supplied by two US manufacturers. By 1992, Mr Sugar's love affair with the City had turned so icy that he attempted, unsuccessfully to buy out the majority shareholders. He set about rebuilding Amstrad but this time it was through acquisition - first of a cellular phone business and then of Viglen - a company that specialised in selling PCs direct rather than through high street retailers.

Amstrad will be remembered as much for the man as for its best-selling product. Mr Sugar left school at 17 and after a short spell as a statistician in the Department of Education, branched out on his own. The son of an East End tailor, he was a loner at school with a love of cooking and photography. They were not obviously the best credentials for him to make his way as a trader in the rough and tumble of the East End markets but Mr Sugar quickly demonstrated his acumen for making money. Within four years of forming Amstrad, the business was making nearly pounds 200,000 profit a year on sales of pounds 1.3m.

Today he has all the trappings of wealth - a Rolls-Royce with the personalised numberplate AMS1 and a 160ft yacht, the Louisiana - but his pugnacious, impetuous, back-of-a-lorry style of doing business has scarcely changed. And he still inspires fear and awe in equal measure among those he employs. He also inspires great loyalty. Many of his managers at Amstrad, known collectively as Sugarlumps, aped his appearance - the stubbly beard, bulldog expression and free flow of expletives.

Now Mr Sugar says he wants to devote his energies to football. At Spurs, his relationship with supporters and shareholders has been the mirror image of that he cultivated at Amstrad. The shareholders love him for turning the club's precarious finances around. The fans, or at least a vocal minority, loathe him for Spurs' lack of success on the field. Mr Sugar's disdain for paying high prices for "foreign mercenaries" or "Carlos Kickabouts" as he has dubbed them is well known. In a reversal of his individualistic business philosophy, he says no one player is going to win the Premier League. Rather, composing a football team is like assembling a business. "It's like a manufacturer who has laid down the plant, put the machines in place, finished the designs and now everything is ready to roll," he recently said of Spurs.

Yesterday, with unfortunate timing, one of its most important pieces of machinery - the star striker Teddy Sheringham - stuck in a transfer request, apparently disillusioned with Mr Sugar's style of negotiating new contracts. Who says life at Spurs will be any easier than running Amstrad?

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