Josh Littlejohn and Alice Thompson were a couple in their mid-20s when they opened a sandwich shop on Rose Street, Edinburgh, in August 2012. Called Social Bite, it was a social enterprise, employing the homeless, and giving away its unsold sandwiches. Following celebrity visits from actors George Clooney and Leonardo DiCaprio, the business has grown to five shops in Scotland, and a restaurant, Home, which opened in Edinburgh last year. Littlejohn, whose father, Simon, was a restaurateur, set himself a salary limit of seven times that of his lowest-paid employee.
That proved to be “wildly optimistic”, says Tim Lewis in The Observer. It’s “nowhere near that”. Nevertheless, his next project is to build a village for the homeless on land set aside by Edinburgh city council. It is designed for entrepreneurs with “social vision”. With £750,000 already raised, Littlejohn, now 30, insists the homes must be cosy. “We could have done a glorified shed,” he says. But it would have failed. “The living environment has to inspire change.” Cooking and eating will be communal, and the focus is on keeping busy. “That’s what I hope we’ll build here,” says Littlejohn. “A little utopia.”
Eighties power dressing gets back on trend
Bijan, the appointment-only, bright-yellow fashion boutique on Rodeo Drive in Beverly Hills, which opened in 1976, helped define 1980s power dressing, says Amy Feldman in Forbes magazine. Former US president George W Bush, Mexican tycoon Carlos Slim, and the late Shah of Iran all shopped there.
But since the death of the shop’s Iranian founder Bijan Pakzad, his son Nicolas Bijan Pakzad, a “baby-faced 25-year-old with slicked-back hair”, has been busy reinventing the brand that had become stale over the years. “He’s pushing Bijan to be younger and more on trend,” says Feldman, and now a third of his business is taken up by young Chinese millionaires, who can afford to shop anywhere, but choose to buy his $9,500 suits.
Together with his father’s long-time business partner, the younger Bijan is eyeing global expansion, including in London, Hong Kong and Dubai, hoping to grow annual revenue to $120m. In 1992, sales had reached $50m, when the Bijan name was world famous, and synonymous with luxury fragrances. “Bijan is already taking a page out of his father’s playbook by appearing in the brand’s advertisements,” says Feldman. After all, adds Bijan, “I’m the face of the company”.
The council estate boy who did good
It was Christmas Eve 2014 when Steve Parkin, the 56-year-old founder of delivery firm Clipper Logistics, got a call from John Lewis on the beach in Barbados, Parkin tells The Sunday Times’ Oliver Shah. The high-street retailer’s parcel carrier, City Link, was about to go bust, and Parkin was drafted in to salvage the situation. “Funnily enough, me and [finance director David Hodkin] had looked at City Link about a year before, to acquire it, but had walked away,” he says.
But Parkin realised that City Link’s mostly click-and-collect orders destined for Waitrose supermarkets (owned by John Lewis), could have been made more economical if larger vans had been used. Parkin’s solution was to use Clipper’s fleet of heavy goods lorries to service John Lewis’s click-and-collect orders more cheaply. That same year, Clipper listed on the stockmarket, netting Parkin £34m – “not necessarily what you would expect of a former council estate boy who did ‘101 jobs’… on his way to the big time”, says Shah.
Hong Kong’s paper billionaires
Wong Wing-wah was a fishmonger who founded a Hong Kong civil engineering company, Luen Wong. Last year, Wong listed the firm on the stockmarket, and since then the shares have rocketed by 9,800%, turning Wong and his business partner into billionaires. That’s despite the business only making $1m in profits. The price/earnings (p/e) ratio is currently around 2,450 in a city where the median average for small-cap stocks is 13.
The answer to how they achieved such rapid wealth lies in one of the most obscure corners of Hong Kong finance, say Robert Olsen and Benjamin Robertson on Bloomberg. “The Hong Kong Stock Exchange and its sibling, the Growth Enterprise Market, have become a breeding ground for paper billionaires.” In the last three years, around a dozen executives, many from the Chinese mainland, have amassed multiple billions from the soaring value of their companies’ shares, “usually for no apparent reason”.
The main cause is that they have only floated a tiny percentage of their companies’ shares – sometimes less than 1%. Since the number of shares publicly traded is so small, the stocks are extremely volatile and a small amount of buying can push the price up. However, the gap between the price at which investors are able to buy and sell can be huge. In the case of Luen Wong, this bid-offer spread recently hit 68%, say Olsen and Robertson. The Hong Kong regulator, the Securities and Futures Commission (SFC), is unsurprisingly concerned. In April 2016, after Luen Wong began trading on the exchange, the SFC recommended investors take “extreme caution” as 96% of the shares were held by its two founders and just 19 others.
Since there are few buyers at these prices, the owners are billionaires in name only. But while the paper billions might not translate into billions in the real world, the owners still cash in, analyst Dan David tells Bloomberg: “Even if they’re just a billionaire on paper, they’re still able to access hundreds of millions [in new business or funding] that are not due them in real money.”