From humble beginnings in London’s East End to a £770 million fortune and a ranking of 89th in the Sunday Times Rich List 2011, Alan Sugar’s is a true rags to riches tale.
Knighted in 2000 for services to business and given a peerage in 2009 as part of a new enterprise role for Gordon Brown’s government, wannabe-entrepreneurs can learn a lot from Baron Sugar of Clapton.
But it’s not all been plain sailing. Despite making millions from Amstrad and making fools of hapless candidates on the Apprentice, Sugar has also made plenty of mistakes along the way.
How he got started
Born in Hackney in 1947 and brought up in a council flat, Sugar left school at 16 and after a brief spell in the civil service, famously started selling car aerials out of the back of a van using savings of just £100. His earnings were soon outstripping those of his father, Nathan, a tailor. At the age of 21 he founded Amstrad, a name which came from his initials (Alan Michael Sugar TRADing).
Within two years he was manufacturing low-priced hi-fi turntable covers and in 1980, Amstrad was floated on the London Stock Exchange.
The 1980s were Sugar’s heyday. It was the era of home computers and the Amstrad CPC 464 proved popular despite tough competition from the Sinclair ZX Spectrum and Commodore 64. The Amstrad PCW 8256 word processor shortly followed and its success meant Amstrad’s share price and market value doubled each year.
By the time he turned 40 in 1987 Sugar was worth about £600 million and was the 15th richest person in the UK. At its peak Amstrad was valued at £1.2 billion.
No repeat success
However, the 1990s weren’t quite so lucrative for Sugar. The launch of a range of business PCs was damaged by unreliable hard disks and Amstrad took the disks’ manufacturer Seagate to court. Although Amstrad won the case, its reputation in the PC market was severely dented and the company moved instead into the games console market. But the Amstrad GX4000 couldn’t compete with consoles by Nintendo and Sega which offered a wider choice of games – another bad decision.
Diversification into the telecoms market followed in 1993 with a PDA called PenPad and later a combined telephone and email device called the e-m@iler. Neither sold well and in 2007 Amstrad was sold to BskyB for £125 million, a fraction of its peak value. Initially Sugar planned to continue to play a part in the business – which by then made set-top boxes for Sky – but he stood down as chairman the following year.
As well as business, Sugar is a big football fan and teamed up with Terry Venables to buy Tottenham Hotspur in 1991. Although he helped the club out of a financial hole, his involvement didn’t go down well with Spurs fans and his relationship with Venables turned sour. He sold his majority stake in Spurs in 2001 and the remainder in 2007, citing his time at the club as “a waste of my life”.
Locking in his wealth
By this time he had several other companies up and running under his holding company Amshold. Founded in 1993 and run by his son Daniel, Amsair offers business and executive jet charters. Daniel Sugar also oversees Amsprop, a property investment firm. It owns the IBM South Bank building and is the company Simon Ambrose, winner of the 2007 series of ‘The Apprentice’, went to work for (although he has since left).
Winners of the 2008 and 2009 series of ‘The Apprentice’ (Lee McQueen and Yasmina Siadatan) both went to work at another of Lord Sugar’s companies, Amscreen, which sells advertising space on digital signage. Amsceen is run by Lord Sugar’s other son Simon.
Formed in 1975 and acquired by Amstrad in 1994, Viglen is now Lord Sugar’s only IT company. Viglen is run by Bordan Tkachuk who makes regular appearances on ‘The Apprentice’. Viglen’s headquarters in St Albans also plays a part in The Apprentice, providing the scene for the “walk of shame” when the fired candidate departs in a taxi.
Turning success into fame
‘The Apprentice’ made Sugar a television star as well as business guru. Starting in 2005, the reality TV show saw candidates compete for a £100,000 job with one of Sir Alan’s companies, and later a business partnership with the man himself. Unsuccessful applicants were sent on their way with the non-negotiable “you’re fired” accompanied by Sugar’s famous pointing finger of doom.
Contrary to his on-screen Mr Grumpy persona, Sugar is pretty generous with his cash. He donates his BBC fee for presenting ‘The Apprentice’ to Great Ormond Street Hospital as well as his pay for appearing in adverts for National Savings and Investments. He also allegedly returns his £200 Winter Fuel Allowance, an annual sum given out to all over 60s.
Despite giving money away, the serial entrepreneur still has enough left to own mansions in Essex, Spain and Florida which he can fly between in one of his two private jets worth a combined £33.5 million. His fleet of expensive cars include a Land Rover, Bentley, Ferrari and a Rolls Royce Phantom.
The secret to his success, according to him
Lord Sugar also negotiated his own book deal for an undisclosed sum with Pan Macmillan. His autobiography ‘What You See Is What You Get’ was a best seller in 2010.
In the book Lord Sugar reveals the secret of his success. His method involves watching what the market leaders are doing, making better and cheaper products, and selling to the mass market at cheap prices rather than the “hi market”.
In his autobiography he claims to be an “all-rounder” in his business, sitting on the production line and assembling the first units of any new models his company produced.
However, despite his millions, his business sense is not always spot on. In February 2005 he predicted that the iPod would be "dead, finished, gone, kaput" by the following Christmas. Six years later Apple reported that 300 million iPods had been sold worldwide.
But then having the ingenuity to make money from almost nothing, riding a technology boom and then having the sense to diversify in case the good times ended meant his mega-wealth is assured, even if he never has a good idea again.