UK: THE ANDREW DAVIDSON INTERVIEW - CHARLES DUNSTONE - The young Mr Normal who in 10 years turned his ...

UK: THE ANDREW DAVIDSON INTERVIEW - CHARLES DUNSTONE - The young Mr Normal who in 10 years turned his ... - THE ANDREW DAVIDSON INTERVIEW - CHARLES DUNSTONE - The young Mr Normal who in 10 years turned his no-frills Carphone Warehouse shop into a £350 mi

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Last Updated: 31 Aug 2010

THE ANDREW DAVIDSON INTERVIEW - CHARLES DUNSTONE - The young Mr Normal who in 10 years turned his no-frills Carphone Warehouse shop into a £350 million a year communications chain is also keen to avoid extravagance in his personal life. But it's not easy when the world beats a path to your door [PP] 82, 087 Photograph (omitted).

Will success ruin Charlie Dunstone?

'Sometimes,' he says, apropos of nothing much, 'sometimes ...' Then he half mutters, half whispers the rest, so I can't really catch it. He is sitting, looking strangely disconsolate, curled up on the corner of the sofa in his modest, west-London office. Outside, on the grey, congested car park beneath his window, it is just beginning to drizzle. Sometimes, I think he is saying, he cannot believe just how successful he has been.

That figures. In the 10 years since he opened his first shop in London's Marylebone High Street, Charles Dunstone has made a fortune surfing the boom in one product: mobile phones. Now at 35, as boss of the £350 million-turnover Carphone Warehouse retail chain (650 shops and counting), he is probably the most-successful young entrepreneur in Britain. But sometimes, he says, sometimes he can't quite believe it. Everyone wants a piece of him now. Invitations to appear on Question Time, dinners with press moguls, little chats with Peter Mandelson, nightclub openings, rich lists. No wonder Dunstone keeps pinching himself. You feel like saying: It's OK, Charlie. It's not a dream. Don't worry about it.

And that's because, unlike some young, rich, driven individuals, Dunstone is quite easy to like, really. He doesn't build barriers between himself and the rest of us mere mortals. In fact, he doesn't really talk or act, or even look, like someone overbrimming with business savvy. Still so young and fresh-faced, short, a bit plump, unnervingly courteous, he seems like a rather nice, liberal chap who probably went to a solid public school and has since spent a lot of time in Notting Hill. Perhaps a manager in something a touch creative - publishing or advertising, maybe. That checked workshirt and the Saturday-shopping trousers are something of a giveaway, really ...

But personally worth £275 million? No. Pull the other one.

'You know this wealth thing?' he asks, appearing slightly bemused. He has a way of looking up to you a bit like a kid hoping for extra pocket money. 'One of the guys I work with says: 'We are the poorest rich people we know.' The Sunday Times might say we are worth this, but we haven't got it.' He shakes his head at the bizarreness of it all. No Porsches in the car park, no fountains in the foyer. Charlie just likes working.

Then you look at the pictures of the big yachts (his) on the office wall. You remember that his latest marketing director stormed off after just six months. Then you also remember that Dunstone is the man who went out of his way, despite considerable criticism, to employ Ernest Saunders, the disgraced former Guinness chief, after he had served his time in prison.

Saunders' big-company experience, says Dunstone, has been a key ingredient in Carphone Warehouse's extraordinary success. And when I ask him if he didn't worry about the controversy he courted by appointing Saunders as a consultant, he replies: 'Actually, I don't really give a toss.'

So, not just a charming naif. Others in the telecommunications business say that Dunstone is all of the above: tough but kind, supportive to those who are loyal to him, determined and very focused - but most of all he's much smarter and much more energetic than you might think on first meeting him. He has also developed a disarmingly informal style of business that one supplier describes as 'typifying the modern management methods you find among younger bosses in America: not driven by ego or personal ambition, he just cares passionately about his baby, his business'.

Yet there is nothing American about Dunstone's background or schooling.

Born in Cambridge, educated at Uppingham school, he had the sort of affluent, British, middle-class upbringing that he describes as 'very normal, very unremarkable'. Dad was a big wheel at BP, mum didn't work. Young Charlie was the eldest, with just a kid sister to compete with. By the time he was at Uppingham, Dad was sent abroad to run BP Denmark, so Charlie learnt to cope on his own over here. The biggest shock to anyone came when he decided not to take up a place at Liverpool University because he was enjoying his holiday work as a computer salesman so much.

So what's driven him on? As I run through the usual culprits - naked ambition, pushy parents, sibling rivalry, financial crises, academic failure, the urge to prove someone wrong - Dunstone shakes his head and practises that apologetic half-smile he does so well. None of that, he says, although it did take him three attempts to get his maths 'O' level (once he had put pound signs in front of everything, he jokes, he found doing figures a lot easier). No, he has just always had an interest in shops and selling things. Understatement, it transpires, is something of a Dunstone forte.

He says he first got the business bug at Uppingham, selling 'fancy goods' - sunglasses, lighters, pens - which he bought bulk through a small ad in Exchange & Mart before slapping on a 100% mark-up. (In fact, smart man, he didn't sell them himself; he hired a lippy schoolmate to do the selling. The friend, television presenter Johnny Vaughan, was just beginning to find his metier.) After that, everything just seemed to fall into place.

The gap-year sales job at Torch Computers in Cambridge gave Dunstone a company car - brand new Ford Escort, registration A468JER, he remembers fondly - and his ex-pat parents' need for someone to repossess the family home from a bad tenant gave him a posh house in Saffron Waldon. Who wants to go to university when you've got your own gaff and you're earning money?

Torch was 'a bit of a shambles', he says. When it reorganised, he moved to NEC. He loved the big company security. Then NEC moved him onto selling mobile phones.

'It took me about three days to realise that this was the best thing that had ever happened to me,' he says, gazing out at the rain now pouring down his wide office window. The market for mobiles was just taking off, demand was outstripping supply. He didn't have to sell, so much as allocate.

But after three years of doing that, he got bored. He'd noticed that the biggest users of mobiles were the self-employed - tradesmen, builders - yet big companies like NEC were snobbish about dealing with them.

He had £6,000 in savings - just enough to open one shop - a handful of good contacts in the industry and a limitless supply of energy. So he left and set up Carphone Warehouse with another old Uppingham mate, David Ross. Dunstone did the sales. Ross did the finance. They never looked back.

The trick, I guess, is having the confidence to make that leap. He nods.

Did his Dad help? No, he says, he never really consulted his father, nor did he borrow money from him to start the business. In fact, he didn't tell him till after he'd made the move, although his father was always supportive and helped him financially after the launch. 'I am conscious I owe him a debt, but he doesn't own a stake in the business.'

Otherwise Dunstone has built the Carphone Warehouse chain without borrowing huge sums of money from the banks. Everything is funded by profits made, he says. He leaves the financial details to Ross, preferring to concentrate on plotting strategy, motivating staff and tracking consumer preferences.

According to those who do business with them, it's been a productive partnership for the two old school chums. While close, Dunstone and Ross are very different personalities. Dunstone is all smiles and flesh-pressing, more democratic in manner; Ross is more taciturn, slightly flashier, more businesslike.

'Charlie is a good walk-round manager, does a bit of everything, very good at sales,' says one network executive. 'David's a nice guy, too, but he doesn't smile as much, he is much more taciturn. In fact, you will be lucky if you get more than a grunt out of him in meetings.' Another friend adds, 'Rosso pretends to be the hard one but he is a big softie underneath. I think when someone has to be sacked, he always makes Charlie do it.'

What's nice about them, the same friend adds, is that wealth hasn't changed them: they are both still just two mates who have done well in business but don't throw it around, probably because they come from the sort of affluent background that mistrusts extravagance.

So Dunstone lives with his girlfriend in a small house too near the Circle Line in Kensington and he looks after his chums. He buys his office coffee off another old school friend.

He is always ready to help others who ask for advice, and the only problem there is that the queue is growing. Helen Bentley, Dunstone's girlfriend, who runs her own catering business, says he is already feeling the pressure socially.

'So many people want his advice now,' she says. 'They see him as some kind of business guru but he points out he's only really made it in one thing.' He's not, despite others sticking the tag on him, the new Richard Branson.

But no one can accuse Dunstone of lacking ambition. He aims, he says, to be the biggest retailer of communication products in Europe within 10 years and his company is expanding at an extraordinary rate. He bought the 271-store Tandy chain in the UK earlier this year for less than £10 million and Ross, who spends much of his time abroad, has been busy setting up 'Phone House' shops in Ireland, France, Germany, Belgium, Holland, Spain and Sweden. Next year they push into the old Eastern Bloc.

All the stores are run to the same Dunstone formula: well-briefed staff offering 'simple, impartial advice' backed by cheap phone deals. He calls it 'retailing consultancy'. In a mobile phone market that has boggled consumers with its complexity for years - different networks, new systems, changing technology - it has proved a winning strategy.

Carphone Warehouse outlets will even give you unskewed fact sheets on the health risks associated with using mobiles.

And no, there are no plans to change the chain's outdated name. Research (Dunstone is a big focus group fan) indicates that consumers like it, as it shows the company has been there, done that, and got a good pedigree.

All of which begs the question, how did the big boys in electrical retailing let Dunstone get away with it? Dixons is running to catch up, Rumbelows went to the wall. It seems they never saw him coming. Yet things are changing.

So far Dunstone's business life has been a smooth - some would say lucky - ascent without major knock-backs. Now bright new rivals are piling in, the older chains are getting their act together, what will happen when Carphone Warehouse is really squeezed?

Dunstone shrugs. The market and the technology is just as complicated as it always was, he says, and will probably continue to be so while personal computers and phones converge. Then there is his hunch that digital cameras are about to follow mobiles as the next big boom - and he has another chain, Tecno, which he bought from a private consortium in May, ready to surf that particular wave.

'Most of all, people just need help. Technology will move so fast that unfortunately - or fortunately for me - you will be required to buy a new phone quite often,' says Dunstone with a rather chirpy grin. 'It will just keep moving.'

There are chinks in his armour, though. The hiring of Ernest Saunders (Dunstone met him through Saunders' children, who he knew socially) still attracts criticism. He bounces ideas off the ex-Guinness chief continually, Saunders often responding with scribbled faxes, and Dunstone feels that, without the experience of someone who has been at the very top of business, he would never have managed Carphone Warehouse's rapid expansion so well.

'Ernie contributes a lot on marketing. He also helps us to understand how the larger organisations we deal with are thinking and how we should position ourselves.'

Dunstone knows a lot of people think he should never have taken Saunders on board. He admits he has a thick pile of letters of complaint from customers - 'I'd never have bought a phone off you if I had known you employed a crook' - and he has lost at least one big firm of accountants who refused to do an audit for Carphone Warehouse because of the Saunders link. 'I'm hoping that they want the business in future,' says Dunstone grimly, 'because it will give me enormous delight to say to them, 'Sorry, but if we weren't good enough for you then, we certainly aren't now'.'

And anyway, he argues, even if Saunders did what the courts held that he did, he has paid the price. You cannot have a world without rehabilitation. 'We were just incredibly lucky that, through his misfortune, we were able to tap into the knowledge of someone who would never normally have been interested in a two-bit mobile phone store.

'And the thing that is fantastic about Ernest,' concludes Dunstone, 'is that he remains so in touch with everything that is going on in business.'

Yes, amazing for a man discharged early from prison because he was said to be suffering from Alzheimer's disease.

Oops. Dunstone stops for a second, then smiles wryly.

'Well,' he says finally, 'that is the biggest issue he has to face up to. People think he was released early because he made up that he was ill, and I don't know how you answer that. But I can't imagine they let you out of prison early too easily.'

Other managers have found Dunstone less supportive.

Earlier this year he brought in another old friend, Lesley Angus, to head up marketing. Angus, an experienced executive with stints at Virgin and Disney on her CV, left after just six months, telling the trade press that she clashed too often with Dunstone. The spin implied that, like many hands-on entrepreneurs, he was impossible to work with.

Dunstone tells a different story. He says that he wasn't happy with how she was treating Carphone Warehouse staff, and that he is very hurt that she went to the press about it after what he thought was an amicable agreement to part. A more worldly and cynical boss would have made her sign a gagging clause, of course, old friend or not.

But that's his quirk. His obsession with nurturing and protecting his staff - even against his own executives - goes beyond plain business nous; it is fuelled by a horror that his workers might see him as something grand and aloof. He still insists on buying his clothes in the sales, even though he could afford the designers, because that is just how he is. He can't stand extravagance; he goes to work on the tube, he forbids business lunches and he wants everyone to bond.

So inside the company there are not just 'carrot-points' which let workers get catalogue goods, there are also Christmas presents and freebies - often stuff which has been sent in for Dunstone himself that he passes on. And best of all, there is the now-notorious, annual all-nighter - a fancy dress ball (Ross' idea) in October, where free drink is laid on for Carphone Warehouse's workforce, now 2,000-strong, till 7am and everyone gets ripped.

This enthusiasm for worker fun is infectious, but you can't help wondering how it squares with the company's plans for expansion and its enormous power in the telecoms market now. Suppliers are desperate for Dunstone's favour, and he is notoriously difficult to please, always adopting the role of consumer champion. He takes a call on his own mobile while we are talking - 'Are you on your mo, Mark? I'll call you back' - brandishing a slim grey machine, no bigger than a credit card. How much is that?

'Oh it's just come out,' he says, showing me the phone, 'it costs £299, but it's probably not worth that.'

What! You can't say that, you're selling it.

He grins again. 'Yes, I can. I'd say that to someone. But if you are absolutely determined to have the very latest and the very smallest, then ...'

Will he remain Joe Normal for ever?

Maybe he never was. There are those yachts, for instance. A 41-footer which he keeps on the Hamble and races with a crew of 10, and another twice as big which he rents to a charter company. All in all, he says, he spends about £25,000 a year on his hobby, and it is his great passion.

He loves the intellectual graft of navigating, and it's the only time he can really escape work.

Helen, his girlfriend, thinks that when he is not sailing, he is always feeling guilty that he should be back in North Acton mucking in with the troops (even on holiday, he gets the sales figures SMSed to his mobile twice a day).

But, of course, he is not one of the troops. For a start, it was probably him who took home over £300,000 in salary (highest-paid director, Carphone Warehouse accounts) in 1998, not any other of his employees, and it was certainly him profiled in lad's mag FHM earlier this year ('I'm the luckiest man since Ringo Starr,' he said, with brilliant self-deprecation). And it's definitely him who gets invited to Luke Johnson's monthly Mandrake Club meetings for young hotshots. There he can network with other entrepreneurs and get a sense of shared problems.

And it's absolutely him who is already on matey terms with Peter Mandelson and popping down to Bournemouth to attend Tony Blair's speech to the Labour Party conference.

And the £350-per-head dinner afterwards? 'No,' he laughs.

'I went to make a presentation to staff at the Post House hotel in Southampton. Not quite so glamorous.'

But I think he believes that, so far, he has done the easy part. He has separated the trappings of success from his role as the business world's latest boy-genius (so much so, that he doesn't even tell his parents how successful he is; his girlfriend sends them the cuttings). And he has held his team together.

The next few years are going to be really tough. He will have to bring in fresh talent at all levels. How will he stay so well grounded as Carphone Warehouse gets ever-bigger? And what if he starts a family - how will that affect him? He has such tired eyes, he looks like he is working all hours already.

So many questions - including one I forgot to ask: would he ever float the company, or even, if someone offered him a huge bag of money, sell it outright?

I ring him up after the interview.

'Well, never say never,' he says, giving it serious consideration. But he would only float in order to give a chunk of the business to his workforce.

And, as for selling outright ... hmm. 'It would take a lot of money,' he says. But as the whole business is his life - 'his baby' as one supplier puts it - I would bet the thought seems like infanticide to him.

DUNSTONE IN A MINUTE

1964 Born 21 November in Cambridge. Educated at Uppingham School

1983 Joins Torch Computers as a salesman

1986 Moves to NEC as a sales manager

1989 Leaves NEC and opens first branch of Carphone Warehouse in London's Marylebone Road

1999 Buys 271 Tandy stores for £10 million.

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