My first Million: Arnold Fulton

Jody Clarke finds out how Polish -born Arnold Fulton reinvented the umbrella and founded the largest manufacturer in the country.

Arnold Fulton, the Polish-born founder of Britain's largest umbrella manufacturer, owes a lot to Jurek Igra.

First, Igra helped him and his sister, Sonja, stay alive in the Warsaw Ghetto during the war. Then, ten years after the war by now married to Sonja and running an umbrella factory in Stockholm Igra helped again.

Fulton was living in Britain, where he was working as an engineer but anxious to set up his own business. Why don't you start making umbrellas like my husband? suggested his sister. "You're so inventive and it always rains in England."

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Fulton liked the idea. In the summer of 1956, he spent a month in Sweden, where his brother in law taught him all he needed to know about the umbrella business. Back in London, Fulton and a friend rented a two-up, two-down with an outside toilet in east London for £5 a week and got to work.

Fulton noticed that most stores carried very limited ranges. "So I started innovating on the design." He gave his umbrellas nickel frames to prevent rust and ten ribs instead of the usual eight, making them more wind-resistant. That made them more expensive, he says, but that wouldn't matter if they were sold at Selfridges, then home to the UK's largest umbrella department.

"I was determined to get in there. If I got in there it would establish me as a brand." In the end he had to offer three dozen on sale or return before the store agreed to stock them for four weeks. Three rainy days later, he got an urgent phone call. The umbrellas had sold out in two hours and Selfridges wanted another 12 dozen, "by today or tomorrow". With production capacity of just 100 umbrellas a week, Fulton had to expand fast.

He visited his bank, looking for £750, but when asked for collateral, apart from a £5 watch and a delivery bike, had little to offer. His two-person umbrella factory was barely more impressive, but over a snack at the local pub, Mr Holmes, the bank manager, agreed to lend £500 to the 26-year-old, which he used to buy enough parts to last him for five weeks.

"Once we were in Selfridges, we started selling into DH Evans, House of Fraser and so on." Years later, Fulton asked Holmes why he had lent the money without any collateral. "In banking, you have to follow your hunches," replied Homes. "You were young, and I felt you'd be successful and a good client of Barclays."

Once the smallest of 75 umbrella makers in Britain, Fulton's is now the biggest, with a 25% share of the 15-16 million umbrellas sold here every year. But the going hasn't all been smooth. The 1989-1991 recession coincided with a spell of good weather, bringing the business to its knees. Barclays extended the money to tide Fulton over, but wanted him to sell the firm's Canary Wharf Office, for which he had paid £680,000 in 1985. With the commercial property slump, Barclays valued it at £400,000. "And do you know what saved me? No one wanted it. The market was so depressed that no one made a bid of any kind."

It was their loss in 2002, the one-acre site was valued at £30m in The Sunday Times Rich List, with the business worth £30m on top. He is now expanding into other areas. "If three years of dry weather taught me anything," he says, "It's not to be so dependent on the weather."

Jody Clarke

Jody studied at the University of Limerick and she has been a senior writer for MoneyWeek for more than 15 years. Jody is experienced in interviewing, for example in her time she has dug into the lives of an ex-M15 agent and quirky business owners who have made millions. Jody’s other areas of expertise include advice on funds, stocks and house prices.