Over the years, critics have increasingly tired of Sir Richard Branson, “the goateed and grinning mascot of British capitalism”, says The Economist. They grouse about the Virgin founder’s peculiar knack of creaming off cash from his ventures at the ultimate expense of the taxpayer. Now the billionaire is back with his begging bowl, says Spiked, gunning for a £500m state bailout of his airline, Virgin Atlantic, which is in danger of collapse. Down under, Virgin Australia (the country’s second largest carrier) has requested an A$1.4bn emergency loan.
Branson (currently personally worth around $3.9bn, according to Forbes) has offered to sweeten the bailout pill by putting $250m of his own cash into the Virgin group, says The Times. But it’s “unclear how much of that is earmarked for the airline” given competing demands from other troubled Virgin businesses, including its hotels and health clubs. “This is no time for Branson’s usual smoke and mirrors.” The public is in no mood to stump up for a billionaire based in an offshore tax haven – Branson needs to flash some more cash of his own if he wants to save his empire.
A hippy acquires business smarts
The son of a barrister and a flight attendant, Branson began his entrepreneurial career as a teenager – after quitting Stowe School at 16 to start a magazine called “Student”, says Entrepreneur. His former headmaster marked the launch with a prophetic note: “Congratulations, Branson. I predict you will either go to prison or become a millionaire”. Branson hit upon the idea of using the magazine to advertise mail-order records and “the business soon became more lucrative than the magazine”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Branson clearly had business “smarts”. In 1971, he partially fulfilled his headmaster’s prediction when he was briefly “hauled into jail” following a scam to defraud Customs & Excise (he was saved when his mother showed up and posted the family home as bail). Virgin Records’ big break was backing Mike Oldfield’s 1973 hit Tubular Bells. Three years later, he signed The Sex Pistols. The band and their “shrewd manager”, Malcolm McLaren, initially took Branson for a “naïve hippy”, notes Spiked. But they were “soon taken aback at how ruthless and canny he was”.
Over the ensuing decades Branson launched a bewildering array of high-profile businesses – from Virgin Atlantic (1984) and his space-tourism venture, Virgin Galactic (2004), by way of Virgin Money, Virgin Radio, Virgin Trains, Virgin Cola, Virgin Cosmetics… By 2014, the group had interests in 200 companies across 30 countries. The secret to his later expansion, says Entrepreneur, lay in “licensing the highly regarded Virgin name” – enabling him “to launch a patchwork of businesses with minimal investment”: a strategy he dubs “branded venture capital”.
Rebranding the latest trends
Branson has continued “his shtick of attaching the Virgin brand to the latest trends”, says The Sunday Times. Thanks to tips gleaned from his new mates in the British Virgin Islands (Google founder Larry Page owns the island next door to Necker, where Branson is based), he has also built a “sprawling portfolio of tech investments”. Necker was devastated by a hurricane in 2018. “The island is mending. We’ll get it back and beautiful again,” he said last year. Doubtless he’ll be hoping much the same of his Virgin empire.
-
Is a mortgage in retirement always a bad idea?A mystery shopper exercise shows high street lenders are “shunning” retirees looking to take out a mortgage. Are they right to do so?
-
Three funds to consider as UK small caps trade at 30% discountUK small caps have been unloved for some time, but a shifting economic environment could give them a boost
-
Trapped in a time of zombie governmentIt’s not just companies that are eking out an existence, says Max King. The state is in the twilight zone too.
-
America is in deep denial over debtThe downgrade in America’s credit rating was much criticised by the US government, says Alex Rankine. But was it a long time coming?
-
Bank of England raises interest rates to 5.25%The Bank has hiked rates from 5% to 5.25%, marking the 14th increase in a row. We explain what it means for savers and homeowners - and whether more rate rises are on the horizon
-
UK inflation remains at 8.7% ‒ what it means for your moneyInflation was unmoved at 8.7% in the 12 months to May. What does this ‘sticky’ rate of inflation mean for your money?
-
VICE bankruptcy: how did it happen?Was the VICE bankruptcy inevitable? We look into how the once multibillion-dollar came crashing down.
-
Would a food price cap actually work?Analysis The government is discussing plans to cap the prices of essentials. But could this intervention do more harm than good?
-
UK inflation slides to 8.7% - what does it mean for your money?News Inflation has dropped below 10% for the first time in months, but with food prices at a 45-year high, is this good news and what does it mean for your money?
-
Why the UK equity market is shrinkingAnalysis The crisis has been building for 25 years, says Max King, and it will take decades to reverse the trend.
