From Sunday Times Rich List and an estimated worth £430 million in 2010 to a costly divorce and £122 million in debt in 2013, Duncan Bannatyne discusses his roller-coaster wealth journey in our exclusive interview
At 64, Duncan Bannatyne is a Scottish entrepreneur, philanthropist – though from his fire-breathing TV persona you might not know it – and author. His business interests range from hotels and health clubs to stage schools, property and transport, though his major fame is as a business angel on BBC’s Dragons’ Den.
His six books, with titles such as 43 Mistakes Businesses Make, talk about snapping to attention career-wise; but his seventh, Riding the Storm, is extraordinary.
Debt and divorce
First, it details the revelation of autumn 2013 that the mogul is £122 million in debt, via a loan taken out before the recession from the Anglo-Irish Bank – though Bannatyne insists this is company debt, and that the company has £230 million in assets. Almost more shocking is the graphic description of his wrenching divorce from his second wife, Joanne McCue – and its financial implications.
This, and the charitable causes for which he earned his OBE (the Bannatyne Trust has so far raised more than £2 million), show the gruff Scot to be a deeply emotional man.
However, in person, there’s little sign of sentiment. Bannatyne is brusque and, though oddly likeable, he clearly doesn’t suffer fools. He grew up in a prefab in Glasgow’s post-war Clydebank, the second of seven children, and the son of a factory worker and a cleaner.
Did his upbringing instil a need to drag himself out of poverty by his bootstraps?
“I really just wanted to make enough money to buy a house and have a nice car – my parents never had a car. But when I actually got into business, I realised that I really enjoyed it. And I still love it.”
Business, though, took a while. He’d been an early entrepreneur – when his parents couldn’t buy him a bike, he knocked on doors, dredged up 100 potential customers for a local newsagent and got a paper round, earning the cash for the bike himself. But career-wise he was unfocused. After a Royal Navy stint he moved to Jersey, where he drove cabs, sold ice cream and met his first wife, Gail. Then, sitting on the beach, he chanced on a newspaper piece about tycoon Alan Sugar. “And, if I remember right, he said, anyone can do it.”
From penniless to business empire
The bit between his teeth, Bannatyne relocated with his wife to Stockton-on-Tees. At 30, penniless and without a bank account, he applied the work ethic he’d seen in his parents, combining round-the-clock shifts in an industrial bakery with bar jobs. He got a mortgage. Then he bought an ice cream van for £450. And another, until he had a fleet – Duncan’s Super Ices – and a £300,000 turnover.
With profits, he picked up cheap houses (£10,000 a pop in the early 80s) and began renting flats to DSS claimants.
And in 1985, learning that the Government had decided to contribute to the care of the elderly, he sold the ice cream business and every asset he had – car, TV, stereo, even remortgaging the house in which his wife and children lived – to build a chain of care homes.
It was massive diversification, and an area Bannatyne knew nothing about.
He’s talked about the importance of recognising an opportunity and exploiting it. Now he adds: “The Government had decided how much they were going to pay for each resident. I simply did the sums, and thought, Wow, this is great.”
Still, to risk everything for a step into the unknown must require more; a gut feeling that tells you it’s right. Would Bannatyne say instinct also drove his decision?
“Yeah – for that particular endeavour, it just seemed a no-brainer. It was right, I couldn’t see how I could lose.”
Does instinct drive him often, knowing in the abstract, as well as on paper, that he should run with a project?
“It does, though not so much lately, because I spend a lot more time looking at things before I do them. I’m expanding slowly. That is, in relation to what I have – so if I build a health club now for £4 million, that’s a slow development. I can take my time. I’m not in a hurry any more.”
Quality Care Homes was a success. With each venture, Bannatyne’s knowledge grew, and he insists you can only learn about business by being in business. He’s developed a sixth sense. “I know what’ll work and what won’t – absolutely.” What you can’t know about in advance, of course, is a global downturn.
Bannatyne sold the care home business in 1996 for £26 million. By then he’d met his second wife Joanne, a nurse with an interest in fitness. His empire currently includes the Bannatyne Health Club chain, 26 clubs bought from Hilton Hotels for £92 million; Bannatyne hotels; and a more recent venture into spas. In 2010, his wealth was estimated at £430 million by the Sunday Times Rich List.
Global downturn and facing failure
Bannatyne had also become a fixture on Dragons’ Den. What does he look for in a business or entrepreneur? “You’ve got to understand your market. And you need passion and drive and a business plan. But you can have all that and a rubbish idea!” Great guffaw.
If everything is in place, is shaking hands on a deal instinctive, too?
“Yeah, usually.” The hairs, after all this time, don’t stand up on the back of his neck. “You just feel it internally. You feel it works, you can see it works. You sense you can do business with that person, and you can see where you could take it.”
In 2010, life seemed rosy. The scenery changed with that costly divorce and the Irish Government’s demand for repayment of a loan from the now-defunct Anglo-Irish bank to buy the health club chain. By 2011, Bannatyne’s wealth was listed at £85 million. Now he’s off the Rich List altogether.
The option in play is to refinance his business, excruciatingly scaling back and selling off. Or he could sell the business. Fast as a gunshot: “That won’t happen. I’ll pay off the loan. It’s not a problem.”
With such an attitude, the answer to my next question is obvious. How does Bannatyne deal with failure? “It’s like falling off a horse, isn’t it? You get back on the horse.”
What does success look like now?
In some ways, three gruelling years have altered Bannatyne. How does he describe success these days? “Being happy. I rate success on whether or not I’m a good parent.” Bannatyne has six children. “And all I ever wanted is to be a great dad.”
Yet part of him remains as tough as ever, with even more fighting spirit. He’s said the fire he’s been through has renewed his vigour, that “I don’t think I’ve ever been so determined to succeed, and that determination is getting stronger”.
No one needs those kind of setbacks, but they’ve provided galvanic motivation. So when I ask for three key steps to business success, he doesn’t pause. “Decide what you want to do. Go and do it. And keep on working hard.” Despite everything, you can feel his relish for it palpably.
Riding the Storm: My Journey to the Brink and Back is published by Random House.