Iceland founder Malcolm Walker: 'Why should I say sorry for my riches?'

I thought this article most pertinent. Sassy had railed against the rich yesterday apparently being successful was a sin and people shouldn't be allowed to keep their ill gotten gains e.g. Selling frozen food.


How did your childhood experience influence your attitude to money?


I grew up in a mining village in the West Riding of Yorkshire. Dad was a colliery electrician but also ran a smallholding growing vegetables and keeping poultry.


When his foot was crushed in a mining accident, he went into poultry farming full-time before starting a small grocery shop with Mum. He died when I was 14, but I think I inherited my work ethic from him. Even at school I wanted to be a businessman and organised dances around Huddersfield, booking popular live bands.


I once got an offer from a guy in Sheffield wanting to come in on dance events with me. His name was Peter Stringfellow. Life could have been a lot more interesting.


What was your first job?


I didn’t do very well at school and failed to get into Marks & Spencer, Littlewoods and John Lewis, but Woolworths would take anybody. I started at the bottom, sweeping the stockroom floor, hoping to become a director. Two years later I was appointed trainee manager, but it was a nominal title as there was no formal training programme. I was a forgotten man.

Have you always been an entrepreneur?

One of my jobs in Woolworths was weighing seed potatoes. If there were too many, I took some home to our smallholding, planted them and then sold them on to the canteen at Woolies. I had an inherent desire to make money from the start.

How did you launch Iceland?

I opened the first shop in Oswestry in Shropshire with another disillusioned Woolworths worker in 1970. We didn’t have any savings, so we decided to specialise in fruit and veg because it was the only business we could think of where you could buy stock daily and pay at the end of the week. Then I saw a department store in Leeds selling loose frozen foods, so we copied them. My wife, Ranny, came up with the name Iceland. We nearly called ourselves Penguin.

How did you expand the business without savings?

We put down a deposit of £30 each to cover the first month’s rent, and bought two open-top freezers, scales and a cash register, all on hire purchase. Then we found a local food supplier who gave us credit for a week, which was then stretched to a month. Three months later Woolworths discovered what we were doing and fired us, but this simply gave us the incentive to press on and open more shops.

What has been your biggest mistake?

In 1996, Iceland had its first profit setback, dropping from £73m to £65m net profit . We’d grown complacent. If we had been a private company it wouldn’t have mattered, but by then we were a public company and that little dip was viewed as the end of the world by our shareholders. Our market value dropped from £800m to £160m. Our track record of 25 years of increasing profitability meant nothing.

You were forced to resign in 2001 after a merger with the Booker Group, Britain’s largest cash and carry operator, amid accusations of improper share dealing. How did that feel?

It was horrendous. From being the guy who had built a business from nothing, I became the crook who had sold shares ahead of a profit warning. I was planning to retire. Both the Financial Services Authority and the Department of Trade & Industry launched inquiries and eventually, in 2004, I received a letter by second-class post informing me that I’d been cleared.



What has been your largest investment?

Borrowing £800m to buy back Iceland for the second time in 2012. I again became chairman and chief executive after leading a successful £1.5bn management buyout with the support of three new equity investors.

Almost 42 years after I started the company, it was back in private hands. When we bought it in 2005 we paid £160m.

When we bought it again in 2012 the value had increased to £1.5bn.

Has your BBC television outing in Iceland Foods: Life in the Freezer Cabinet been good or bad for business?

There were many cringeworthy moments, but on balance it worked. The feedback has been positive and sales of some of the products mentioned, like the Bubble Bobble King Prawns, have gone off the scale. But in my heart of hearts I do know that elements of that series haven’t done us any good at all.

When I saw the first edit I was horrified. If I’d edited the programme myself I wouldn’t have emphasised the downmarket side of the business quite as much. We certainly won’t be attracting any Waitrose shoppers.

You’ve been critical of the £2.5m tax bill Iceland received after taking 800 managers on a dream trip to Disneyland. Have there been any developments?

We’ve since settled with the Inland Revenue and we’re very happy with the outcome, though I’m not allowed to talk about it.

The taxman made concessions because we argued, successfully, about the investment value of the trip as opposed to the entertainment value. We do this to boost morale, it’s not a holiday. We certainly haven’t been put off. We’re taking our managers to Dubai next year.

What annual salary do you take from the business?

Enough.

Your personal wealth has been put at £215m. Is this accurate?

That’s the rich list figure, but it’s family wealth. My kids have got most of my money. It’s what you do, isn’t it? Diversify your wealth.

The media have made negative comparisons between your wealth and that of your customers. Does that bother you?

Why is it an issue? My personal wealth is nothing compared to the wealth we’ve created. My hunger for business has resulted in 25,000 jobs and £600m in tax contributions in the past six years alone.

Amazon, Google and Starbucks combined haven’t paid a fraction of the tax we’ve paid. Just think how many schools and hospitals you could build with that. My wealth isn’t something I should ever have to apologise for.

Does money make you happy?

I’d rather be miserable with it than without it.

How do you prefer to pay – cash, card or cheque?

It depends on how much the bill is. I don’t carry much cash. In the staff canteen I often have to ask other people to buy me lunch.

Do you bank online?

I don’t bank at all. My secretary sees to all that.

How much property do you own?

My main residence is Broxton Old Hall, a Grade II listed Elizabethan manor house in Cheshire, which I bought for £750,000 in 1985. It was in poor repair, so I knocked it down and rebuilt it. The renovations cost a lot more than I budgeted for.

I also have a holiday home in Majorca and a house in Chelsea, which I bought in 2002. We hardly use it, but it’s probably the best investment I’ve ever made because it has trebled in value.

What is the biggest drain on your finances?

Personal staff – gardeners, house staff and boat crew. I have an 82ft Oyster yacht, which I keep fully crewed, though I spend only two or three weeks a year on it. As we speak, it’s on the way to the Caribbean.

Do you plan to retire?

I’ve decided I never want to retire. Now that we’re a private company again it’s completely different and there are no outside pressures. I’m in this for life and completely focused on Iceland.

- 'Best Served Cold: The Rise, Fall and Rise Again of Malcolm Walker’ is published by Icon Books at £25

 

..He throws it off in the movie!

...He screams like a bitch all the way down!...lol

Hey Scatman now you finished playing with your crayons are you posting your little Youtube movies. How cute.

Thank god for people like him.

Without them there would be a lot of hungry posters on here.

He and all other tax payers should be worshipped like Saints by those on benefits.

Clarkson wrote:Hey Scatman now you finished playing with your crayons are you posting your little Youtube movies. How cute.

Fartson.

You need to stop being abusive, by changing my tag, to Scatman.

Catman wrote:

Clarkson wrote:Hey Scatman now you finished playing with your crayons are you posting your little Youtube movies. How cute.

Fartson.

You need to stop being abusive, by changing my tag, to Scatman.

Unfortunately Mr Catman, it is perfectly ok to call somebody a name on here.

Scatman I am far less offensive than you and your liberal use of the C word where Tories are concerned.

Still you are the Jeremy Kyle generation benefit scrounger so should I expect anymore? Of course not.

Malcolm Walker wrote:I took some home to our smallholding, planted them and then sold them on to the canteen at Woolies. I had an inherent desire to make money from the start.

Most wealthy men started with stealing.  If they inherited, then their fathers started by thieving their way through life.  I believe there's a criminal gene they all share.

Tickles me how he sold his booty back to the victim...his own employer, fgs.  Actually, it's sad that most of these types end up with titles and awards.

Original Quill wrote:

Malcolm Walker wrote:I took some home to our smallholding, planted them and then sold them on to the canteen at Woolies. I had an inherent desire to make money from the start.

Most wealthy men started with stealing.  If they inherited, then their fathers started by thieving their way through life.  I believe there's a criminal gene they all share.

Tickles me how he sold his booty back to the victim...his own employer, fgs.  Actually, it's sad that most of these types end up with titles and awards.

Mix a little crazy with jealousy and what d'you get?

Quill.

Well...andy, most larceny begins small, and grows with boldness. Your guy started by stealing...from a five and dime store, no less. Embarrassing.

Jealous?  I do alright with a modest law practice, couple of homes, boat, cars.  Most importantly, I didn't have to start by stealing seeds.  I earned it.

Sad?  What is sad is that the titles and awards follow the money...contributed to self-interested politicians by selfish business people.  Doesn't look so valiant when you realize it's just a cheap commercial transaction, eh?

Original Quill wrote:Well...andy, most larceny begins small, and grows with boldness.  Your guy started by stealing...from a five and dime store, no less.  Embarrassing.

Jealous?  I do alright with a modest law practice, couple of homes, boat, cars.  Most importantly, I didn't have to start by stealing seeds.  I earned it.

Sad?  What is sad is that the titles and awards follow the money...contributed to self-interested politicians by selfish business people.  Doesn't look so valiant when you realize it's just a cheap commercial transaction, eh?

You wouldn't be so keen on lefty politics my friend if you lived in the UK under a Labour govt. Clearly you enjoy a good income that would be far less here than your take home pay in the US.

My wifes last job was working for an American firm I wanted her to move to the US not least because Brwon had screwed her with his punitive tax hikes.

It's easy pontificating across the Atlantic when someone else is taking the hit.

So he was the product of a failed education system then?
Well lets here no more bashing of kids coming out without enough qualifications to get a job when it's clear that that cannot always be a measure of someone's ability

I take it the Banks grew the public sector workforce by 750000 did they Bru.

Labour spent pent spent after 2000. It spent every penny and some so that when we had a downturn we were spending far more than we were generating.

They can't run a bath. On the other hand the coalition have turned it around. Everyone bar Labour says so, all the metrics say so comparison with alternative Socialist models says so.

You are stuffed Millibands only string is to play the politics of envy.

I have to repeat you are a real loser because you idolise the biggest loser of all Gordon Brown.

You should be ashamed.

Clarkson wrote:I take it the Banks grew the public sector workforce by 750000 did they Bru.

Labour spent pent spent after 2000. It spent every penny and some so that when we had a downturn we were spending far more than we were generating.

They can't run a bath. On the other hand the coalition have turned it around. Everyone bar Labour says so, all the metrics say so comparison with alternative Socialist models says so.

You are stuffed Millibands only string is to play the politics of envy.

I have to repeat you are a real loser because you idolise the biggest loser of all Gordon Brown.

You should be ashamed.

You keep coming out with all this nonsense when the records show that Spending by Labour was actually better than the Tories had achieved during their previous 18 years in power which saw record unemployment and double digit inflation throw millions on the dole and out of their homes.

From The Institute of Fiscal Studies

Over the first eleven years of Labour government, from 1997 to the eve of the financial crisis in 2007, the UK public finances followed a remarkably similar pattern to the first eleven years of the previous Conservative government, from 1979 to 1989. The first four saw the public sector move from deficit to surplus, while the following seven saw a move back into the red.
By 2007 Labour had reduced public sector borrowing slightly below the level it inherited from the Conservatives. And more of that borrowing was being used to finance investment rather than the day to day running costs of the public sector. Labour had also reduced public sector debt below the level it had inherited. As a result the ‘golden rule’ and ‘sustainable investment rule’ that Gordon Brown had committed himself to on becoming Chancellor in 1997 were both met over the economic cycle that he eventually decided had run from 1997

So that will be why Osborne and Cameron pledged to match and exceed Labour's spending plans then?
Let's not mention Ireland's Celtic Tiger.

As in so many things from conservatives, I find myself questioning the premise. Who, exactly, has asked this man to apologize for being wealthy?

@ben
he is confused after  being asked to apologise for being an asshole

He Still asks his staff to buy him lunch, we'll like they say the Rich anit rich because they spend money

veya_victaous wrote:@ben
he is confused after  being asked to apologise for being an asshole

He Still asks his staff to buy him lunch, we'll like they say the Rich anit rich because they spend money

Very true in my experience Veya and why I'll never be rich!  

But does money ever truly make you happy? It can't buy love, friendship or health in many cases.  I'd rather be generous and help others, even in a small way than a miser with thousands in the bank.

feelthelove wrote:

veya_victaous wrote:@ben
he is confused after  being asked to apologise for being an asshole

He Still asks his staff to buy him lunch, we'll like they say the Rich anit rich because they spend money

Very true in my experience Veya and why I'll never be rich!  

But does money ever truly make you happy? It can't buy love, friendship or health in many cases.  I'd rather be generous and help others, even in a small way than a miser with thousands in the bank.

Well, you are right FTL. Those are personal qualities and are far more important for happiness.

But, some wealth is necessary to keep trouble away.

The difference is these guys don't seek happiness or charity. They are hoarders. It's a game for them.

When I became financially comfortable I was struck by the fact that you're not free. You've still got to abide by certain rules. Pay taxes. No drunk driving. No bar fights at the pub. And the standard ones...no killing, no rape and stay off the grass.

A lot of people don't get it. Rather than play by the rules, they use what they have to manipulate and change the rules. Of course, a good lawyer and accountant are essential. But people like the Koch Brothers go way beyond that...they defy the standards of democracy. They use wealth to get into power, and then try to shut down everyone else's freedom. Voter suppression? Incursion on the rights of women and their personal lives. Blacks? Hispanics? Immigration rights? All that...and then tax breaks for the very rich, while the middle class pays for their military toys and sends their sons into wars of acquisition for the rich. There's something about all that...it breaks the rules.

If you can buy the public park and then walk, exclusively, on the grass...it diminishes the meaning of public. I think that's where the wealthy today have lost the way.