Sir Tom Hunter: 'I did want to give my money away. Just not quite like this.'

published 9 January 2009

In July 2007, when Sir Tom Hunter was at the top of his game, his pledge to give away £1bn earned him star billing on the BBC's Ten O'Clock News. Interviewed in the garden of his £50m mansion on the Cote D'Azur, Hunter who made his first fortune selling shell suits and trainers cut a relaxed and confident figure as Britain's foremost venture philanthropist. Eighteen months on, that dream is unravelling as fast as his West Coast Capital investment empire. The yacht has gone, the Cap Ferrat mansion has been sold and, last week, his flagship fashion chain USC lurched into administration. To his credit, Hunter retains his gallows humour. "I did want to give my money away," he told The Sunday Times. "I just didn't expect it to be in quite this way."

Hunter admits he made mistakes, says the Daily Mail. He borrowed heavily to pile into everything from garden centres to housebuilders. Still, given his well-meaning intentions, "no one could enjoy watching the implosion of [his] empire". Making money is "only half the equation", said Hunter, taking his cue from the 19th-century Scottish-American steel magnate Andrew Carnegie ("a man who dies rich dies disgraced"). His charitable foundation stretched from Scottish schools to Live Aid. Rivals sniped that Hunter was trying to buy a stairway to heaven; but there were earthly rewards too. The prize for being a paid-up member of the international philanthropy set was having Bill Clinton's number on speed-dial and a Learjet on standby. Hunter, who liked to meet old school-friends for fish and chips, remained true to his Ayrshire roots. But he lived a dreamy sort of life in the playgrounds of the super-rich. "My wife Marion and myself are going to leave this world pretty much as we came into it, with nothing," said this would-be "new Carnegie". They had quite a lot of fun along the way.

Before he got started on philanthropy, Hunter had been a low-profile tycoon. A former teacher described him as "well-liked, studious and pleasant", but hardly likely to make a splash. Born the son of a grocer in the small mining town of New Cumnock, Hunter had a gritty start, says The Guardian. He studied business at Strathclyde University, graduating during the early 1980s recession to find that both the local mining industry and his family business had been wiped out.

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He reportedly came up with the idea of selling sports kit from the back of a van after having trouble getting a job. He went on to build Sports Division into one of Britain's largest retailers, eventually selling the business to JJB Sports in 1998 for £290m. Everything he touched "seemed to turn to gold", says The Sunday Times. Property and private-equity investments, and stakes in retailers ranging from BHS to shoe-chain Office, saw his paper worth quadruple before prices started plunging. With hindsight it's clear he "played in a lot of things he shouldn't have played in", says one City critic. But despite no longer being Scotland's richest man, he started the new year in fighting mode. "I am not wiped out," he says, vowing to hang onto his portfolio. "You would be a mug to sell right now." The pre-pack deal engineered to save USC is proving controversial (see below) and his £1bn charitable pledge is on hold. But Hunter, 47, remains bullish. "My life isn't over, I've still got another 40 years left in me, hopefully."

The first buzz phrase of the year: meet the 'pre-pack'

"The first buzz phrase of 2009 is with us," says Chris Blackhurst in the Evening Standard: the "pre-pack". These opaque and often all too cosy deals, in which a buyer is lined up for a failing business even before it goes into administration, are mushrooming. "But they stick in the craw." The justification used by Sir Tom Hunter's West Coast Capital group when it deployed another subsidiary to snap up 43 UCS stores from the administrator last week is that a swift sale will safeguard jobs and assets. But pre-packs leave unsecured creditors with a bad taste in the mouth and they're surely "particularly worrying" when assets are instantly resold back to former management. Apart from the dubious morality, the likelihood of a second insolvency is estimated at 45% if a pre-pack business is sold to a connected party.

And Hunter is hardly the only tycoon taking advantage, says Lisa Buckingham in The Mail on Sunday. His chum Robert Tchenguiz pulled off the same stunt with his Laurel Pub Company, to get rid of hefty lease commitments. "It was, if not abuse, then a highly unsavoury spectacle." And while lucky old Hunter and Tchenguiz skip off into the sunset with a smaller, more profitable collection of shops and pubs, many landlords and suppliers are robbed of crucial cash. Fortunately for them, the Inland Revenue (also a leading victim of "pre-packs") is planning a clampdown on companies it suspects of going into pre-pack "to dump and, indeed, dump on their creditors", says Ian King in The Times. In the meantime, we can expect a bonanza. The large accountancy firms are said to have 15 large pre-packs lined up for January alone.