Obituary:James Gulliver

Brian Basham
Sunday 22 September 1996 23:02

James Gerald Gulliver was an outstanding entrepreneur. He built three businesses and made himself many millions in the process before in 1985 launching the bid for the drinks company Distillers which, for most people, became the defining issue of his life.

He was a man of great ability. Born in 1930 in Cambeltown, Strathclyde, he studied at Glasgow Univeristy where he was awarded a First class honours degree in Mathematics and Engineering together with a gold medal. His former tutor Professor Hugh Sutherland described him as one of the most outstanding pupils he had known.

At the time, the pounds 1.9 billion bid for Distillers by Gulliver's company Argyll was the biggest ever in British history. Distillers was the central pillar of the Scottish commercial establishment and Gulliver tracked it for two years before launching his attack. His analysis revealed that it was both undervalued and very poorly managed.

Eventually Gulliver lost Distillers to Guinness, who engaged in wholesale cheating for which three people went to prison. Gulliver died believing that some of the most guilty people had escaped unpunished.

Subsequently great reputations were forged on the anvil of Gulliver's brilliance in isolating what is still regarded by many in the City as the deal of the century.

The Distillers bid motivated him for many reasons. It had scale, status and vast potential for profit but, most of all, Distillers was Scottish.

Gulliver had an ambition which ranked high alongside his desire to produce value for Argyll's shareholders and that was to build an energetic world- class company in Edinburgh. By creating such a centre of energy, he believed that he would be able to play an important part in generating an infrastructure which would relieve talented people like himself of the need to seek their fortunes outside Scotland.

Despite all his previous achievements, Gulliver approached the Distillers bid with a caution which reflected his inner awe at his temerity in taking on such an icon of the Scottish establishment complete with its estates and loyalties forged over decades in country houses and on company-owned grouse moors.

For advice he turned to bankers who reinforced his private insecurities when they told him that he needed the support of an establishment industry figure if he was to succeed. Acting upon their advice, Gulliver permitted an approach to Lord Weinstock of GEC. It was a mistake which began a chain of events that eventually cost him Distillers.

Having put forward the suggestion that Weinstock should sponsor the transaction by taking a percentage, Gulliver was unable to obtain a formal response for some three weeks. He was told that Weinstock was at a music festival in Germany and could not be disturbed. In the meantime, the Distillers share price rose on rumours which leaked with usual City ferocity to a point at which Gulliver began to reconsider his position.

At that moment, he was approached by a journalist who asked him about the rumours. Using carefully selected words, and acting again on legal and other professional advice, Gulliver told the journalist it was not his "present intention to bid".

Accurately, his advisers had told him that, on the basis of precedence, such a statement would put him in baulk for three weeks. He was told that at the end of that time, he would be free to bid, having re-evaluated his position,

But the Takeover Panel took a different view and under the then Director General, Tim Barker, it imposed a three-month ban. During that enforced lacuna, Ernest Saunders of Guinness made his preparations and later launched the attack which eventually won.

The overall performance of the Takeover Panel during the bid badly dented Gulliver's regard for City self-regulation, As a man with a great regard for authority and tradition, he was discountenanced when, by coincidence, Tim Barker left his job at the Panel the very weekend the three-month ban was lifted to join his old bank, Kleinwort Benson, who were Distiller's advisers.

Neither Gulliver nor anyone else cast doubt upon Barker's integrity but Gulliver took the view that a system which allowed such things to happen could not be a good one. He also believed that the Panel refused to recognise the obvious manipulation of the Guinness share price when it was perfectly clear - and was drawn to the Panel's attention - that the share price was simply levitating. He deemed it confirmation of his view that self- regulation had failed when it took Department of Trade inspectors to discover what had really been going on.

It may be that Gulliver had started to lose his appetite for business well before he launched his bid. Subsequently he became involved in a number of public company ventures but he could never again generate the enthusiasm required and they did not succeed.

His private ventures fared better. His Lords of the Manor Hotel in the Cotswolds, with its Michelin star, is recognised as one of the finest country hotels in the UK, and his two farms at Pitlochie in the County of Fife are fanatically neat models of their kind.

But if Distillers was Gulliver's final big commercial part, his opening scene was Fine Fare, a subsidiary of Associated British Foods, which he joined following a short-service commission in the Royal Navy and four years with management consultants Urwick Orr.

At Fine Fare he was appointed manager of a shopfitting subsidiary which he turned round with such brisk efficiency that he came to the attention of Associated British Food's chairman Garfield Weston. Bringing his capacity for analysis and detail to bear, he became chairman of Fine Fare and worked closely with people such as Kenneth Gill of the advertising agents Garland, Compton to introduce mass media advertising. He also brought in information technology at an early stage. His introduction of scientific management techniques represented an innovation in retailing management at Fine Fare which was complemented by Jack Cohen's seat-of-the-pants approach at Tesco. Together these two very different men laid down the ground rules for modern supermarket retailing.

Gulliver spent seven years with Fine Fare, turning the ailing business into one of the UK's top three supermarket operators. He parted company with Weston in 1972 because he felt that his contribution was not properly rewarded and that Fine Fare did not give him scope for his talents. That year he was given The Guardian Young Businessman of the Year Award for his work at Fine Fare. It was the accolade of which he was most proud.

It was then, aged 42, that he joined with Alistair Grant, aged 36, who he had recruited at Fine Fare to handle marketing, and David Webster, aged 28, a quiet but innovative merchant banker. With Gulliver autocratically in the lead, the trio of Scots bought Oriel Foods, a small edible oil processor. Together they lifted sales ten-fold to pounds 140 million and sold out two years later to RCA of America for pounds 11 million, netting Gulliver his first pounds l million.

In 1977, he set up James Gulliver Associates in offices at the advertising agents Saatchi & Saatchi which were loaned through his old friend from the Fine Fare days, Kenneth Gill, who was then the Saatchi chairman.

James Gulliver Associates became a kindergarten for a number of successful entrepreneurs. Among them Philip Jefferies was an early personal assistant to Gulliver. Jefferies went on to make a substantial fortune by rationalising large chunks of the UK paint industry and through the Fads decorating business. He says that Gulliver taught him more about business than anyone he had ever met.

Derek Hunt, who founded MFI, and Louis Sherwood of HTV passed through, but when Gulliver moved on, Martin Sorrell, an original Associate, stayed with Saatchi as finance director and then went on to build his tiny company WPP into the world's largest advertising group.

The City soon sat up, and began to take notice of this very unusual and fast-moving entrepreneur. In short order Gulliver and his team acquired 21 companies, including Oriel Foods which he had bought back from RCA, and the Louis C. Edwards meat business in Manchester, bought at a bargain price and carrying with it a 16 per cent interest stake in Manchester United together with a role as vice president of the Club. That stake was sold in 1986 but Gulliver, who had become an ardent Manchester United fan, held on to the privilege of two seats in the Directors' box for his personal use.

In 1982 when Sir James Goldsmith withdrew from the British market, Gulliver bought his Allied Supplies grocery chain for pounds 104 million. He then merged Allied with the ADP distilling and off-licence company in a pounds 250 million deal to form the Argyll Group.

He had the knack of being able to select brilliant young entrepreneurs to work for him. He drove them hard, working a six-day week and then starting at 9am on Sunday morning at his house in Hertfordshire on the details of the next acquisition.

One of his colleagues observed that most people think in terms of one per cent. Fewer think of half a per cent. Gulliver surprised his victims by asking for a quarter or even one eighth per cent discount and he almost always got it. That eye for detail stood him and his shareholders in good stead as Argyll's turnover rose towards pounds 2 billion.

He had an irrepressible sense of fun. But, although irreverent in his approach to some aspects of life, he valued establishment recognition. His Glasgow gold medal and his recent CVO were displayed in the drawing room of his fine manse in Edinburgh's Herriott Row.

A man with many friends and a staunch Tory throughout his life, he enjoyed the company of John Smith, the former Labour Leader of the Opposition. Once, at a party at Gulliver's house, Smith quietly pocketed the massive Glasgow gold medal which Gulliver displayed with such pride. He meant to replace it almost immediately but unfortunately in the melee, Gulliver didn't notice it had gone and Smith forgot to return it. It wasn't until the next day, in different parts of Edinburgh, that Gulliver walked into his drawing room to discover the medal had gone at the same moment as John Smith realised with horror that he still had it in his jacket pocket. While Gulliver was looking around for the medal, the telephone rang and he answered it to find Smith laughing on the other end. He used to carry Smith's subsequent letter of apology on House of Commons notepaper which he often showed people when telling the tale.

Although Distillers was a blow from which Gulliver never recovered, the following year Argyll bought the UK arm of Safeway from its American parent for pounds 691 million. Safeway and the birth of modern supermarket retailing is Gulliver's real commercial epitaph, not the loss of Distillers.

Brian Basham

James Gerald Gulliver, businessman: born Campbeltown, Strathclyde 17 August 1930; CVO 1996; married 1958 Margaret Joan Cormack (marriage dissolved; three sons, two daughters), 1977 Joanne Sims (marriage dissolved), 1985 Margorie Moncrieff (marriage dissolved), 1993 Melanie Crossley; died Edinburgh 12 September 1996.

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