Charles Dunstone: Fortunes change for the “lucky idiot”
Carphone Warehouse founder Sir Charles Dunstone enjoyed a hot streak of success as mobile phones took off and he became Britain’s first telecoms billionaire. Now, troubles are multiplying.
Charles Dunstone (pictured) was "one of a generation of public schoolboys" who struck gold with their entrepreneurial ventures in the 1990s, says The Sunday Times. Britain's first telecoms billionaire founded the clunky-sounding Carphone Warehouse with just £6,000 in 1989, flogging new-fangled mobile phones from his flat on London's Marylebone Road. The company grew rapidly and floated in 2000, valued at £1.7bn. Dunstone later launched a broadband operator, TalkTalk "a brave attempt to tackle the might of BT with a budget offering". Of late, though, both companies have been struggling. "The days of plain sailing are over" for Dunstone.
"Remember those sunny days in 2014 when Carphone and Dixons announced their genuine' merger of equals?" asks Nils Pratley in The Guardian. Half a decade on, Carphone is "barely profitable" and has recently been "disgorging an ugly mess" reprimanded and fined £29m by the Financial Conduct Authority for mis-selling its "Geek Squad" insurance and technical support. "The watchdog's finding is a terrible blow for a business built on the idea that it's the punter's friend."
Personable and plausible
Dunstone, 54, whose personal fortune fell by £28m last year to £918m, once attributed his early success to being a "lucky idiot" who was in "the right place at the right time". That clearly undersells his strengths. His old school chum David Ross, who helped transform Carphone from "a group of public-school rugger buggers'" into a retail phenomenon, describes Dunstone's main skill as being "so personable" that he is always plausible, says The Sunday Times. But Dunstone has never lacked drive, or business smarts, either.
After dropping out of a business degree at Liverpool University, Dunstone ended up at the Japanese multinational NEC selling computers and mobile phones to corporate clients. His great lightbulb moment, in 1989, was that no-one was selling to individual punters or small companies. Dunstone's "hot streak of success" continued, with a few ups and downs, well into the new century. In 2007, he stole a march on rivals when he secured the rights from Apple to sell the iPhone in the UK.
Happily married, Dunstone was knighted for services to industry and philanthropy in 2012. Then his luck turned. Carphone was hit by a double whammy when Apple and the mobile network firms starting selling through their own stores, while other customers headed online prompting the £3.8bn "defensive" merger with Dixons. TalkTalk's waning fortunes, meanwhile, have seen its shares sink by nearly 70% over five years. There is talk that Dunstone, who owns 28%, could attempt to take it private.
Arguably the fastest-growing part of Dunstone's portfolio of late has been the US hamburger chain, Five Guys, says the London Evening Standard. In 2013, he became a 50/50 partner in a venture bringing the burger brand to Europe where, despite being "late to the patty", it appears to have thrived, growing from five restaurants in central London in 2013 to scores of branches across Europe.
Dunstone has been bruised, but he's still ahead, says the Evening Standard. "Why not retire to the Caribbean with his billion quid and go sailing on his yacht?" That's not for him. "The truth is, I can't help myself," he says. "I like business. I like to make something happen that was not there before and is better than what was there before."