Consider this illustrious CV for a moment. CEO of Clarks shoes, the AA and Kenwood (the food mixer manufacturer not the stately home in Hampstead). A spell as first deputy mayor of London and at HM Treasury. Board member of Legal & General, Alliance Boots and the Compass Group. Personal owner of the British Pathé film archive. Chairman of Nine Entertainment – the largest media business in Australia – and the Emerging Africa Infrastructure Fund. Board member of the Audit Commission. Chairman of the Post Office, Samsonite and the National Trust. The final three are all current positions. Phew.
You’d have thought the CV’s owner would be a household name up there, if not with Sugar and Branson, then Rose, Leahy or McCall. But when I told people I was off to interview Tim Parker, most people had never heard of him. A few will recall the ‘Prince of Darkness’ epithet he attracted after wielding a sharp knife at Kwik-Fit, then the AA. The unions said he pulled up in his Porsche outside the HQ building of the latter, went in and fired half the workforce.
It’s not as if he isn’t distinctive. He hardly dissolves into the background. How many 60-year-olds maintain an extraordinary mop of hair like Parker – a tumbling mass of grey ringlets? ‘Yes, it’s entirely real,’ he notes. ‘People expect it to come off, like a toupee, when I dive into a swimming pool. But it stays on.’ We are sitting at a table in the house of Thomas Carlyle, the philosopher and essayist, on Cheyne Row in Chelsea, part of the National Trust estate. Parker has a place around the corner. Carlyle’s place has been preserved perfectly from the days when he first rented it in 1834 for £35 a year. The area was quite edgy in those days. A bit like north Peckham now. On the table is a copy of a biography of Carlyle entitled Moral Desperado.
Photography by Harry Borden
Parker, 60, is a big, tall guy dressed in a casual but slightly dandyish style. He’s confident and direct but – although renowned as a no-nonsense doer – thoughtful, as well. I remind him that the first time we met, as I walked into the room, he threw his iPhone to the floor and it bounced. (He was showing off a Samsonite product.)
Must be nice living in Chelsea surrounded by all these Russians. ‘Yes. It’s oligarch central round here. Bit different from Carlyle’s day. London’s now the first port of call for Russians in search of an insurance policy. Pretty different from when I ran Kenwood back in the 80s. Our Russian customers, if they got an exit visa during the days of the Iron Curtain, really wanted to make sure it was a fun week…’
How did Parker come to be here via such an interesting route? He did PPE at Oxford where he was a member of the Left and chaired the Labour Club. He was an unlikely recruit to capitalism’s sharp end. ‘I don’t know where it came from. My father [a Desert Rat] was in the army and we lived in Belgium, Germany and Malaysia before I was sent to boarding school. After university, I wanted to become an academic and then a politician, which is why I joined the Treasury. They were interesting times and I learned a lot. My chancellor was Denis Healey. We were in dire hock to the IMF. But I knew pretty fast I wasn’t cut out for the Civil Service and I only lasted two years. The thought of climbing those steps in Great George Street for 30 years…chilling.’
A young man who clearly already knew his own mind, he took himself off to London Business School where he did an MSc in Business Studies. This was then an unusual move for a smart guy going places. Those who did Business Studies A level back then were usually students for whom Economics was too taxing, never mind Maths.
‘I really liked it,’ he recalls. ‘They gave me a simple tool box in marketing and accounting. Michael Porter was there and he’d just produced his seminal work Competitive Strategy. However, while most people went off to become bankers or consultants I wanted to be a general manager.’
In 1981, he found a berth at Thorn EMI under Sir William Barlow, who in those days hosted an odd blend of engineering and music, while also possessing the highly lucrative Radio Rentals, which leased people TVs at fine margins. (It disappeared in the mid-90s, demerged and broken up with the Thorn bit eventually becoming Terra Firma Partners under Guy Hands, who came an appalling cropper with EMI.)
‘It owned loads of little engineering companies and would invest and divest. Happy family decisions. After a while there, I saw a vacancy for a small operation in Chicago – 100 people turning over $10 million making commercial catering equipment. I put my hand up and was regarded with disbelief. But they let me go and have a look,’ he says. The 26-year-old got on a plane, went out and ‘made a lot of mistakes. But it taught me management, which is learning about people. A good leader must have a team.’ After two years and realising the business had no scale, Parker had it sold off.
He returned to Bordesley Green in Birmingham and the considerably larger Crypto Peerless. It had 300-400 people and made quite unglamorous equipment for the restaurant trade. He kicked the wheels of that for two years before his first big break. This was Kenwood, founded by Kenneth Wood in 1947 and also part of Thorn EMI. Employing 1,600 souls, its Chef mixer had been a global success and was robustly engineered – millions of UK housewives swore by them and Parker still has two today.
Wood – whose grandfather made Maynards Wine Gums – was a showman legend. His mixer had a unique ‘planetary action’, cost £19 and it made him very rich indeed. Wood had a private plane called Kenwood, a yacht called Gay Jacqueline, and he spent 10 days a year at his very own hydro, Forest Mere, in Hampshire (Kenwood executives were also sent there every six months).
Parker, for the first time, had his hands on something substantial. ‘If I’ve learned one thing, it’s that it is far harder running small companies than big companies. Big brands and market share lead to inherent market power even these days. And market power puts you in control of events in a way that SMEs cannot manage. It’s very hard to make inroads against those who have scale, despite the new rules of the digital age. Those who are big today were usually big 20 years ago.’
Parker enjoyed Kenwood and was convinced it had a future but the then head of Thorn EMI, Colin Southgate, did not. He wanted it sold off as he desperately tried to find a lucrative focus for the sprawling empire. So it was that Parker first fell in with private equity and the outfit Candover, which had been founded in 1980. ‘It was a very simple MBO and I knew it was a real opportunity,’ he says. He remortgaged his house to raise the cash to get his hands on 5-6% of the company.
‘That was my first experience of the private equity model in action. I saw how effective it can be. It offers a vital alignment of interest between the management and the shareholders. There is an entry and an exit price and it shows unforgivingly if managers have actually earned their keep or not.’
But doesn’t private equity have a tricky reputation for harsh cost-cutting and short-termism? (Not to mention benefiting from playing the UK tax system to its limit.) ‘Nothing could be further from the truth,’ he retorts. ‘The reality is that you cannot create value unless the growth is sustainable – the fact that there must be room for future growth is vital. It focuses minds, and in the listed environment that focus is often not there.’
So did he think that the days of the joint stock company were now numbered? ‘No. It’s still a good model for the general development of firms. You get access to capital and can get good people. Although we’re losing faith in our business structures, you cannot overlook the immense prosperity that the system has delivered over the last century. It worries me that the loss of faith in business gets so much attention at the moment.’
He expands on his theme. ‘A free market system needs citizens to believe that the method of redistributing income is fair and effective. If you earn a lot, you should pay a lot in tax. At the moment you pay around 47% and it may be that this needs revisiting. There’s a current perception that a small raft of executives are doing very well indeed and that causes disquiet. Paying roughly half seems entirely fair to me.’
He is also concerned by high executive pay. ‘If it’s your company that you’ve created then that is a different story. You share in the wealth created. But listed companies are different. You’re there not because you created it but you are employed by it. Therefore you need to be aware of your reward relative to others who work inside that organisation. I think people should bear risk. As a country we need to settle what we feel is legitimate [on tax]. People must feel that the system is fair and we are far from a consensus at the moment.’
He is even less happy about inherited wealth. He says this disrupts the market system in which we ask the population to believe. This is made even worse by the housing boom and the vast sums held by those with property in unaffordable London and the south east. The playing field is far from level from birth.
‘If the starting points are so very unfair then that’s not good. Bluntly speaking is wealth yours when you die? Should assets stay with estates? It really surprises me how little discussion we have about this.’
But what of his own children – there are four ranging in age from 30 down to 18 – are they going to get zilch? This is all getting a bit Piketty. ‘I want my children to benefit to a certain extent. But they must create their own lives. And I’m right behind them when they set out to achieve what they wish to achieve.’
He isn’t the average plutocrat or tycoon. Had Parker been a high-profile billionaire type where it was all about him – no names mentioned – he would not have given a monkey’s if his offspring lay about in Barbados on the pages of Hello and some Made in Chelsea footage.
Anyway. To return to his upwardly mobile narrative. Once Parker had his hands on Kenwood, it was ridden hard to get both turnover and profit up. It was floated for £102m in 1992, which meant it had almost doubled in value from £54m in three years. Parker remained for a further three and a half. (Kenwood, incidentally finally fell into the hands of the De’Longhi Italian kitchenware company in 2001.)
It was a sprawling family of inheritors with whom he had his next major encounter – the Clarks shoes mob and their firm, which dated back to 1825. ‘Roger Pedder was the chairman and he read about me in a magazine,’ Parker recalls. ‘It was pretty interesting. There were around 200 descendants of the original CJ Clark with a family shareholder council and the whole business was doing very badly.’
This was decades before the kind of modern day Clarks hipsterdom, which has seen the likes of Florence Welch, Nick Cave, Dizzee Rascal and Robbie Williams wearing the Somerset company’s shoes. Jamaican dancehall star Vybz Kartel has even written three songs in praise of Clarks in recent years.
This was the bad old 90s. ‘The family knew they needed to do something and getting someone in from outside would, in theory, make it easier,’ he says. ‘They knew very tough decisions had to be made. It was almost loss-making and only the property portfolio was keeping it afloat – they had 1,000 shops. But the tail was wagging the dog.’
Parker’s corrective surgery was drastic. Manufacturing ceased entirely in the UK moving to Portugal and eventually Asia. This is where he first gained his reputation as a bloodless slasher and burner. ‘One thing you cannot fault me on is that I’ve always told the truth. I always carefully spell out the alternatives. It’s a challenge if people don’t agree on your strategy. But don’t personalise the argument.’
And the Prince of Darkness thing? How did he like that? ‘Anyone who meets me is baffled by it. I’m philosophical. One mustn’t expect an unruffled world where tough decisions have to be made. People who work with me form their own conclusions. But it’s true, business does involve rough and tumble. It’s never an easy ride solving problems.’ He didn’t just cut at Clarks, he also invested far more in design and marketing, making shoes that were less frumpy – they even came up with a new ad slogan: ‘Act your shoe size, not your age’.
The next double descent for the Prince of Darkness was on first Kwik-Fit then the AA. Parker was, by this stage, the go-to execution guy for private equity giant CVC. Both had grown a bit flabby, the former in the hands of Ford. But it was at the AA that he hit the headlines for the use of the knife. ‘The problem with the AA was that the organisation hadn’t acknowledged that modern cars simply don’t break down as much as they did in the past. So a patrol force of that size and structure was all wrong.’ One-third of the AA’s workforce of 10,000 lost their jobs but CVC got its turn nearly doubling its money. EBITDA increased from £120m in 2004 to £305m in 2007 and then it was merged with Saga, at an enterprise value of £3.35bn.
Parker is now a very wealthy man, probably worth around £185m, according to Philip Beresford of The Sunday Times Rich List. His long association with private equity and the lucrative spoils of that trade have seen to that. He lives in Sussex and has his London place. The family has a house in Majorca and he’s considering buying a place in Venice if he can ever find the time to have a proper look.
He also made the personal purchase of the British Pathé film archive around eight years ago, when it was sold by the Daily Mail. It cost ‘a definite seven-figure sum’, employs 10 people and is doing very nicely. Definitely not a vanity project like blowing the cash on a Damien Hirst. ‘It’s a unique and very important property. We’ve got many of the videos onto YouTube, which means anybody can see them. It’s a critical part of our history because the 20th was the first century to be filmed from beginning to end.’
Samsonite was the next project. And on this one he really hit the personal jackpot. The US luggage company, which was founded in Denver Colorado in 1910, fell right off the airport carousel after the 2008 crash. This was bad news for CVC, who had only acquired it the year before for $1.7bn. In came Parker, in late 2008, after profits had dropped by two-thirds to $53m. Not the kind of numbers that amuse any private equity investor. Again he did the transformation and Samsonite was floated – like Prada – on the Hong Kong exchange for $2bn in 2011. When asked, he says this was his favourite company and deal he’s ever been involved with.
He also did us all a favour because RBS was owed a small fortune by Samsonite. ‘I’ve not done badly for the British taxpayer,’ he said in an interview last year. ‘I think I’ve got back almost all of the money that was originally lent.’
Samsonite has been on an acquisitions spree in the past few years and in March agreed to buy luxury rival Tumi for $1.8bn. And Parker has said that the business still ‘has plenty more scope for growth’ in the future.
Now he has his triumvirate of chairs. My guess is that he will shake the National Trust up a bit. He’s a very different chairman from his predecessor, Simon Jenkins, the journalist. Parker is far less likely to write rhetorical, campaigning articles in the Guardian, more likely to have a good rummage around under the bonnet. ‘I’m very different from Simon and I’ll approach things slightly differently,’ he acknowledges.
The Trust is alarmingly large and influential. It has 4.2 million members, 10,000 staff and uses the services of 60,000 volunteers. Quite a management challenge. ‘Consistency is the biggest challenge. Keeping to the same standards across every property is difficult.’
In recent years, disquiet has been expressed that it’s become a bit of an eco/climate change crusader at the expense of looking after its buildings properly and showing them off at their best to the public. ‘We get 20 million visits each year to houses and gardens, but 200 million to outdoor sites,’ he responds. ‘Most houses are in good shape and their collections looked after. But the natural environment is a huge challenge. Making sure our natural spaces are in good shape is very important and our number one job is looking after what we’ve got.’
Taking over the chair at the Post Office is a rather charming full circle thing for Parker as his first boss in business, Sir William Barlow, did the same job when it also included the Royal Mail and the telephone system. ‘He was a straight-talking but charming man. He knew how vital it was for young people to get experience.’
Parker’s only serious hiccup in recent years has been his very brief spell as first deputy mayor of London under Boris Johnson. He was genuinely interested in going in to shake up this branch of local government but, on discovering he was one of about six deputies, he promptly handed in his cards. This produced the amusing Telegraph headline ‘The axeman who axed himself’.
He doesn’t mind shifting from one thing to another. I doubt if he lost a single wink of sleep about the Boris Johnson fiasco. Staying in a single organisation until he got his gold watch at 65 would have bored him rigid. He’s quite open about this. ‘Life is short. You can go and work for a large company for years if you wish. It’s my good fortune [and, one might add, his active choice] that my businesses have had little politics. I hate the thought of lurking in the corridors of the HQ of a large company. What I really like is picking good people and working hard and closely with them.’
And when the task is complete there will always be another. Don’t expect the Big Gun For Hire to hang up his 44 Magnum (or his axe) any time soon. ‘The happiest people I know in their 70s are those who are still working,’ he says.
Three challenges facing Parker
Ensuring his three boards keep firing on all cylinders
Finding more turnarounds ahead
Keeping his hair on
Parker in a minute
1955 Born on 19 June
1977 Economics assistant, HM Treasury
1981 Chairman’s assistant, Thorn EMI
1989 CEO, Kenwood
1995 CEO, Clarks
2002 CEO, Kwik-Fit
2004 CEO, AA
2008 Chairman and CEO, Samsonite
2015 Chairman, National Trust and Post Office