Bouncing back with Sir Rocco

Having taken over the reins of his father's business empire, Rocco Forte lost the lot in 1996 in a vicious £4bn bid battle with Granada. Starting from scratch in the following year, Forte began to rebuild the brand... Stefan Stern and Matthew Gwyther report.

by Stefan Stern and Matthew Gwyther
Last Updated: 09 Oct 2013

The icy, wind-swept streets of Edinburgh can be enough to test anybody's constitution, no matter how fit you are or however good a mood you happen to be in. But imagine walking the length of Princes Street all alone on a bitterly cold Friday in February, hands in your pockets, knowing that the world really is against you. To a passer-by you could be just anybody, another struggling pedestrian trying to make progress in the teeth of a biting wind.

Sir Rocco Forte knows precisely how this feels, since, almost exactly 10 years ago, he was that lonely man striding through the heart of Auld Reekie. A year and a half earlier, his family's business had been snatched out of his hands by the marauding predators of Granada, led by Gerry Robinson and Charles Allen. In the intervening months, Forte had struggled to get back into business. He had spent six months raising £1 billion to buy back the family firm's four- and five-star hotels - but the deal had fallen through. He 'd looked at several other hotel projects, but none of them had come to fruition.

So here he was, a businessman without a business - someone who was learning the meaning of the term hero to zero the hard way. But his fortunes were about to change. At the end of Princes Street, just by Waverley railway station, stood the grand Balmoral Hotel, and Forte, with the support of the Bank of Scotland - whose HQ looked down on this scene from its seat on top of the Mound - had just bought the place for £35 million: the first 'RF Hotel'.

'I remember, it was the day before a Scotland rugger match, so all the hotels were full,' says Forte, 'and they didn't have a room for me at the Balmoral. I had to stay at the Sheraton, which is at the other end of town. I walked to the Balmoral from the Sheraton, and it was a freezing cold day, one of those typical Scottish cold, icy, northerly-wind days. But as I was walking down Princes Street I felt a warm glow looking at the Balmoral there. And I thought: this is my hotel. For the first time, I had a hotel that I really owned, unlike having a shareholding with the old Trusthouse Forte business. So it was a very, very good feeling. And I actually did the handover of the hotel myself, as we didn't have a manager at that time.'

Forte glows again at the memory of these first faltering steps back on the road to the big time. He is speaking to us from the elegant sofa of a superb suite at Brown's in London's Mayfair - a hotel that, once part of the old Forte empire, rejoined the family as another RF Hotel in July 2003 with a £51.5 million price-tag. Ten years after the Balmoral acquisition, the entrepreneur now has 11 luxury hotels in operation around Europe, with another three locations soon to come on stream.

He may have just turned 62, but Forte is looking in remarkably good shape, with the physique of a man half his age, testament to the arduous fitness regime he puts himself through in preparation for the marathon running and 'IronMan' triathlon events that have become a passion. There is hardly a trace of grey in his hair, and with his full beard he looks like a tidied-up version of Al Pacino playing the corruption-fighting cop Frank Serpico - but a Serpico who can afford an expensive tailor.

He looks at ease here - which is only natural, since it's his own place. But it must also help to look around the room and know that the design of all the RF Hotels is in the hands of his sister, Olga Polizzi.

'I'm very lucky to have my sister working with me,' says Forte. 'When we started off, she was already working in that area in the old company, so she had very clear ideas as to what the hotels should look like, and what was happening in design terms. She persuaded me that we should go down this more modern approach in terms of decoration, and I think it has been very successful. It's a key factor in hotels and one that differentiates us from the competition.'

It's that old family thing again, isn't it? 'Well, yes it is,' Forte says. 'We trust each other implicitly. She can say anything she likes to me and I'm not going to take offence. I'll know she's saying it for all the right reasons, and vice versa. But we haven't had a cross word, actually, and one of the pleasures of this business has been being able to work closely with her. She sits on the main board and on the management board, and she participates in all the decisions.

'I more or less leave the decorations to her. At the beginning, I didn't have very clear views, but I have since developed them, so from time to time I criticise something and she takes it on board, and if she's strongly against something I want to do, she makes me think about it again. So it works very well. We've always been quite close because we're quite close in age - although I probably ought not to say that! But we mucked around together as kids a lot. We used to have boxing matches! She's a very special person.'

Perhaps it was the strength of family ties such as these that helped Forte get back into business when he was at his lowest ebb in 1996-97. That and his friends, of course. 'I was always being told that my friends were fair-weather friends,' he says. 'But they were always there and are still there today.

'People were very nice to me. Win Bischoff has a golf tournament, a golf day, and he invited me along to that. David Stevens, who was then running United Newspapers, gave a lunch and put me at his top table, and then the next year asked me to give a thankyou speech, and so I got a lot of support of that kind.

'But at the end of the day it's up to you,' he adds. 'You've got to make the effort. If you're depressed, you've got to get over it. No-one else is going to do it for you. You've got to settle down and decide what you're going to do.'

Forte had it easier than most, as he's the first to admit. 'It's not as if I was destitute or anything,' he says. 'I had quite a bit of money - some people might say I had enough to retire and live a very comfortable life, but I'm not like that. I need to have a project, otherwise I get bored and lazy.'

Still, having to watch as the barbarians trampled their way through his father's painstakingly established business empire must have been a grievous blow. 'The only things I have to say about those two [Robinson and Allen] are unprintable,' is all that Forte will say while the tape is running. He admits to having felt depressed, though: not straight after the Granada takeover - after all, he had succeeded in getting the original Granada bid of £2.30 a share up to £4 by the time shareholders accepted the offer. No, it wasn't until a few months later, when the deal to buy back the prestige hotels had turned sour, that Sir Rocco realised he really was flat on his back. 'When I started off I wasn't sure where we'd get to,' he says. 'I didn't have a specific target. I never said: "I think we'll get to 20 hotels... "'

So that's the target then?

'Twenty hotels would give me the scale and coverage that I want.'

Looking back now from the comfort of a Polizzi-chosen sofa, Forte can afford to enjoy his success. 'What I think I'm really pleased with is establishing a serious brand in the luxury hotel sector. It's recognised in the industry. We're seen as competitors by Four Seasons, which is an established luxury brand, and so I'm quite proud of that.'

Losing the family firm gave Forte's innate competitiveness a chance to shine through, something that was already familiar to anybody who'd played against him at sport. 'I've always done sport and if I don't take exercise then I just don't feel well,' he says.

'Doing something where you're tested, which is competitive, excites me more than just going to the gym and keeping fit. It makes you work that much harder at it, and I think it keeps you going. I think it keeps me younger, more dynamic, and gives me more energy than I would otherwise have - and it's quite a release.

'In the sort of business I'm in, with wining and dining and so on, you can suddenly become a slob very quickly. So the fact that you're training for something means that you don't have that extra glass of wine and you're more careful what you eat. I don't think it's necessarily right for everyone, but it's right for me and I'm quite a determined person. I'm determined in business, and I'm determined in the games I play as well.

'I qualified for the triathlon world championships last year,' he adds. 'I hadn't done it for two years and I then injured my Achilles tendon, so I couldn't take part. This year, it's in Europe again - in Hamburg in August - so I want to try and qualify for that and really do well. That would mean doing about six or seven triathlons before that.'

Phew. How does he feel at the end of one of these events?

'Exhausted. Exhausted and elated. Very emotional, actually - I was in tears. You don't know if your body is capable of handling it. The last marathon was tough, and I went off too fast. I was aiming for a 3hr 45 marathon and went off at that speed, and it was too fast, and after about nine miles my legs just went and it took me 4 hours 28 minutes.'

Disgraceful.

Freed from the formal hierarchy of a major corporation, Forte has been able to let his entrepreneurial instincts take flight. He spotted the RF Hotels-shaped gap in the market and went for it. His are neither designer hotels - nice to look at but not necessarily run by people who really understand the business; nor are they boutique hotels - perhaps too small to offer the full five-star treatment.

'A lot of people, and a lot of hotel companies, pay lip service to the idea of service, but they actually don't do a lot to ensure it's delivered,' he says. 'They don't train their staff to deliver to the right standard, and that's a very strong feature of our business. I get a lot of communication from customers, good and bad, because my name's up there. If they're not happy I take that up directly with the general manager of each hotel rather than go through the operations manager in charge.

'I don't want to get too huge,' he adds. 'I don't know quite what the right size is. Obviously, if you get over a certain number and certain size, I can't personally be involved in the same way. Hotels need to be loved. They need an owner.'

Say it softly, but Forte seems to be truly happy in business these days, while the aforementioned Robinson and Allen have, of course, been dealing with their own little difficulties recently (at Rentokil and ITV respectively).

So has Forte finally found fulfilment? 'Well, I'm happier than I was 10 years ago,' he says. 'I think I was enjoying what I was doing before. The difference is that then people were questioning my ability and whether I was the right man to be running Trusthouse Forte - am I just my father's son? and so on.

'The bid changed a lot of that, because people actually saw me reacting in a very positive way, pushing the price of the bid up. I delivered a very good price to the shareholders, so I would expect that changed people's attitudes.

'And now that I've been relatively successful at bringing in business, the perception outside of my abilities has changed, and that's quite nice. But I haven't finished yet, because the business is still in its very early stages. We're expanding fast, and each new hotel we open holds back the profitability of the business - it takes a couple of years for the hotel to mature. So we're not where I want to be in terms of profitability.' Turnover stands at a pretty healthy £140 million, however.

Forte has not merely bounced back, he is flying high. But with only 30 people at his head office (and 3,500 staff altogether in Europe), he is trying to maintain the feel of a small business. 'The general managers are very relaxed about ringing me up directly and having a conversation,' he says, 'and we have an open-plan office, so everybody knows what's going on, good and bad. I enjoy going to the office. I look forward to Monday morning. It's great.'

If you want to bounce back like Forte, you had better get in training now. Business, you see, is not a sprint - it's a triathlon.

*** HOW YOU TOO CAN BE A COMEBACK KID

In Firing Back - How great leaders rebound after career disasters by US business professors Jeffrey Sonnenfeld and Andrew Ward (Harvard Business School Press, £18.99), five crucial steps are described that characterise the sort of personal resilience displayed by Forte and others who have fought back from despair. They are:

FIGHT, NOT FLIGHT

The ability (and necessity) to face up to the reality of the situation and distinguish those battles that need to be fought to restore reputation from those that drain energy and purpose. With hindsight, Sir Rocco may have done well to walk away from any further dealings with Granada in 1996.

RECRUITING OTHERS INTO BATTLE

Use your support networks, but recognise the collateral damage suffered by friends and associates. The Forte family remained close-knit through all their difficulties.

REBUILD 'HEROIC' STATURE

Understand what has happened to you, put the event into context and provide a rational explanation to others. Start rebuilding your reputation. It helps to find a financial backer.

PROVE YOUR METTLE

Regain trust and credibility, and improvise your way back into business to rebuild your career. Rocco's Balmoral deal took a lot of work but was the launchpad for a new business.

REDISCOVER YOUR HEROIC MISSION

Reconceptualise the deep-seated purpose of past endeavours and chart a new course. RF Hotels are now clearly on the map.

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