Richard Branson
1950–



Executive, Virgin

Nationality: British.

Born: July 18, 1950, in Shamley Green, Surrey, England.

Education: Attended Stowe School, 1964–1967.

Family: Son of Edward (barrister) and Eva Huntley-Flindt (dancer and flight attendant) Branson; married Kristen Tomassi, 1972 (divorced 1979); married Joan Templeman, 1989; children: two.

Career: Student , 1966–1970, editor; Virgin, 1970–, executive.

Awards: Knighthood, Queen Elizabeth II, 2000.

Publications: Losing My Virginity 1998.

Address: 120 Campden Hill Road, London, United Kingdom, W8 7AR; http://www.virgin.com.

■ Richard Branson founded Virgin, a loosely knit family of more than two hundred companies, as a mail-order record business in 1970. As CEO or majority shareholder, he developed successful ventures in music, air travel, financial services, retail marketing, telecommunications, and other fields. Branson's idiosyncratic approach to business and his risk-taking personal life made him a British folk hero as well as one of his nation's wealthiest men. Under Branson's supervision the Virgin group fostered creativity among its employees and allowed the Virgin brand to evolve and diversify with the marketplace.

TEENAGE ENTREPENEUR

Branson overcame dyslexia as a child and began to show his entrepreneurial talents early. Born into a middle-class English family, he displayed both a natural intelligence and a competitive spirit on the playing field. His first business ventures included growing Christmas trees and breeding birds. As he reported in his autobiography, "Losing My Virginity," chafing under authority Branson left boarding school at age 16. At the time his headmaster reportedly told him, "Branson, I predict that you will either go to prison or become a millionaire."

Richard Branson. AP/Wide World Photos.
Richard Branson.
AP/Wide World Photos
.

In 1966 Branson launched Student , a youth-oriented magazine. As the editor Branson interviewed John Lennon, Mick Jagger, Vanessa Redgrave, and other celebrities. He also started the Student Advisory Center, a nonprofit referral service for troubled youth. In 1970 local authorities charged the center with obscenity for using the words "venereal disease" in its promotional material. Branson was successful in getting the charges dropped, setting a precedent for his future battles with authority.

After selling Student to a larger company in 1970, Branson started a mail-order record company, Virgin Mail. The following year he opened a retail store, which by 1972 had become a chain of 14 shops around the United Kingdom. Charged with evading purchase taxes on import record sales, Branson escaped prosecution by paying an out-of-court settlement. Saddled with $90,000 in fines and debts, a sobered Branson expanded his chain of stores and purchased a small castle in Wales, turning it into a recording studio. His next project was to launch a record company of his own. With his cousin Simon Draper as the creative director and Nik Powell as the business manager, Branson inaugurated Virgin Records in 1973. Among the label's first releases was Mike Oldfield's album Tubular Bells , which topped the U.S. charts in 1974 and sold more than 13 million copies. Virgin had suddenly become one of the most successful independent record companies in the United Kingdom. Despite his image as a "hippie capitalist" dabbling in business, Branson proved an astute negotiator from the start, signing his artists to long contracts, acquiring worldwide rights to recordings, and owning copyrights for as long as possible.

RISKY VENTURES AND DARING EXPLOITS

After its impressive start Virgin Records entered a stagnant period in the mid-1970s. Branson failed to sign such established acts as the Rolling Stones and had to rely on Oldfield's sales to keep the label profitable. Matters did not begin to improve until Virgin signed the Sex Pistols in 1977. Undaunted by the punk band's controversial image Branson sold 100,000 copies of the single "God Save the Queen" in one week. Virgin did not pull out of the doldrums until it released Culture Club's debut album in 1982. The phenomenal popularity of the lead singer Boy George helped the band to sell 1.4 million albums in the United Kingdom the following year. Hit albums and singles from Phil Collins and the Human League also did well for Virgin. The label quadrupled its size in four years. Branson used his earnings to launch a Virgin American record label and to invest in new ventures, including Virgin Vision (a film and video distribution company), Virgin Games (a computer games publisher), Virgin Rags (a clothing line), Vanson Property (a property development company), and several London-area nightclubs.

In February 1984 Branson was approached by the American attorney Randolph Fields with an offer to invest in a new transatlantic airline. Despite the objections of his business partners, Branson was immediately intrigued by the possibility. Rather than adopt Fields's initial idea of an all-businessclass airline, Branson envisioned a low-cost carrier that would compete with People Express. The decision to pursue the project caused ill feelings with Draper and other Virgin staff members and met with disfavor with Branson's bankers. It was something of a personal triumph for Branson when, on June 22, 1984, Virgin-Atlantic Airways embarked on its maiden flight between London's Gatwick Airport and Newark, New Jersey. From a single leased aircraft Virgin-Atlantic slowly grew during the 1980s, adding routes to Los Angeles and Tokyo while seeking access to London's Heathrow Airport. Branson emphasized his company's commitment to service by talking with customers during flights. He was even known to dress as a flight attendant and serve refreshments.

To help promote the airline Branson began to raise his media profile by performing promotional stunts and feats of daring. In 1985 he was rescued off the coast of Ireland when his powerboat Virgin Atlantic Challenger crashed during an attempt to break the transatlantic speed record. A year later Branson succeeded in breaking the record with Virgin Atlantic Challenger II . In 1987 Branson set out with the aeronaut Per Lindstrand on a transatlantic hot-air balloon trip, crashing into the Irish Sea after making it across the ocean. The pair completed the first successful transpacific hot-air balloon ride in 1991, although they ended the trip stranded on a frozen Canadian lake before being rescued. Such death-defying adventures won Virgin invaluable publicity and emphasized Branson's image as a fearless risk taker.

Not all of Branson's corporate moves turned out as he had hoped. In 1985 Branson took Virgin public, attracting 100,000 applications for shares. While he gained greater financial stability, Branson disliked the restraints of working with a board of directors. "Previously, I had always felt confident about any decision we made, but now that Virgin was a publicly quoted company, I began to lose faith in myself," he recalled. "I felt uneasy about making the rapid decisions I had always made and wondered whether every decision should be formally ratified and minuted at a board meeting." Branson fought with the board over paying out large dividends rather than reinvesting profits in new projects, as Virgin had previously done. The October 1987 stock market crash helped to convince Branson to buy back his company. He announced Virgin's management buyout in July 1988 and began to seek investors, including the British retailer W. H. Smith and the Japanese media company Fujisankei, for joint ventures. These relationships were especially important in establishing a chain of Virgin Megastores, which were devoted to music as well as other Virgin consumer items, across Europe, North America, and Japan. Also in 1988 Branson launched Virgin Hotels and a new music division, Virgin Classics.

UNIQUE CORPORATE STRUCTURE AND FREEWHEELING STYLE

By the late 1980s Virgin's unorthodox corporate structure was well established. Behind the Virgin logo was a constantly multiplying array of wholly owned subsidiaries and outside partnerships, Branson always maintaining a controlling interest. Each business remained independent though linked to others with similar concerns. "Outside accountants would immediately look at our 200 buildings, 200 switchboards, and all that comes with them and say, 'You're bleeding money'," Branson told Betsy Morris in an interview for Fortune . "But I say, 'Look at what you get!' People who have worked for small companies and then big companies will tell you that it's not as much fun. In a small company, you can create a different kind of energy. People feel cared for."

Branson oversaw his operations from his residences in London's Holland Park and on Necker Island in the Caribbean. In most cases he supervised each business's startup phase, delegated management, and stepped back in only as a troubleshooter. An exception was Virgin's airline and travel businesses, of which Branson remained CEO. Branson kept informal lines of communication open even as his roster of companies kept growing. "We don't have formal meetings," he told David Sheff of Forbes . "People who leave companies with formal structures don't leave because of salaries. If they come up with a good idea, they're told to wait until the next meeting…. With Virgin, we make decisions on the phone. If you've got a good idea and I like it, you can get on with it." Branson prided himself on treating his employees well. During one difficult financial period he was able to persuade some staff members to take sabbaticals to avoid layoffs. He was known for recognizing talent at any level within the Virgin ranks. In 1996, for instance, he promoted a Virgin-Atlantic flight attendant to run Virgin Bride, the largest bridal shop in Europe. Branson became known for dropping in on employees and writing down their comments about Virgin's problems in a small notebook he kept with him at all times. The notebook remained with Branson even as others adopted laptop computers and personal digital assistants—Branson never embraced computer technology.

Lacking conventional business school training, or even a high school diploma, Branson continued to make huge financial decisions according to his own whimsical methods. "In the same way that I tend to make up my mind about people within thirty seconds of meeting them, I also make up my mind about a business proposal within thirty seconds and whether it excites me," he wrote in Losing My Virginity . "I rely far more on gut instinct than researching huge amounts of statistics." This approach was criticized by members of his own staff, according to Des Dearlove's book Business the Richard Branson Way . Some employees referred to Branson's method of trusting his own instincts without conducting further market research as "VSO," or "Virgin's system of one."

Perhaps Branson's most radical achievement was to make his own freewheeling, antiestablishment personality synonymous with the Virgin brand. Whatever caught his eye, whether it was a punk band, an airline, or a line of cosmetics, Branson marketed with style and playfulness. The challenge of entering a new field became part of the game and only added to the Virgin mystique. Assessing Branson's goals and methods for Forbes , Betsy Morris wrote, "Branson likes being a disruptor—taking on industries that charge too much (music) or hold consumers hostage (cellular) or treat them badly and bore them to tears (airlines). His goal was never to be the most profitable." Branson said much the same thing in Losing My Virginity , noting, "First and foremost, any business proposal I like must sound fun. If market is served by only two giant corporations, it appears to me that there's room for some healthy competition…. I love giving big companies a run for their money—especially if they're offering expensive, poor-quality products."

VINDICATION AND EXPANSION IN THE 1990S

Virgin-Atlantic became Branson's chief personal focus during the 1990s. In July 1991 he reached his key goal of expanding service to London's Heathrow Airport. This achievement was a signal victory in Branson's bitter struggle with British Airways, which had sought to block Virgin-Atlantic's growth through political influence and underhanded tactics. Among the latter was the establishment of an espionage unit to spy on Branson and harass Virgin customers in person and by telephone. Lord King, the British Airways chairman, spread rumors that his competitor was about to go bankrupt. Virgin's chronic cash flow problems lent credence to these stories. In 1992 Branson made the painful decision to sell Virgin Music Group to Thorn-EMI for approximately $1 billion to keep Virgin-Atlantic aloft. The sale brought Branson immense personal wealth and enabled him to upgrade his airline with such luxuries as seat-back video screens, full-sized sleeper seats, in-flight massages and manicures, and free ground transportation by limousine. Virgin-Atlantic's problems with lenders and overdrafts continued, however, as did the ongoing battle with British Airways. The British press wondered whether Branson had finally taken on a battle he could not win. An editorial in the London, England, Sunday Telegraph wondered whether Branson was "too old to rock 'n' roll, too young to fly" (March 15, 1992). Branson fought back, casting himself as an upstart David against a greedy Goliath. He continued to accuse British Airways of unethical tactics, prompting Lord King to question Branson's truthfulness publicly. Branson sued British Airways for libel in December 1992, and British Airways offered the highest uncontested libel payment (£610,000) in British history. Branson shared the settlement with the Virgin-Atlantic staff. The court victory marked a turning point for the airline. By the end of the 1990s it had become the third-largest European carrier and the most profitable company in the Virgin group.

Branson emerged from his fight with British Airways an immensely popular figure. A May 1993 survey conducted by TSB ranked Branson the number one role model for Britain's young people. In the mid-1990s Branson branched out with joint ventures as diverse as financial services (Virgin Direct), Internet services (Virgin Net), spirits (Virgin Vodka), and soft drinks (Virgin Cola). Some companies fared better than others. Virgin Trains, Branson's British express rail franchise, gained a reputation for poor service. An attempt with the television personality David Frost to take over the independent U.K. television network ITV was halted by the British government. Despite stumbles Branson's empire kept growing, partnering with Malaysia Airlines to expand Virgin-Atlantic into Southeast Asia and Australia and entering into an agreement with the copy shop giant Kinko's to open locations in Britain and France. Branson remained a presence in the pop music world, creating a new music label, V2 Records while remaining nonexecutive president of the EMI-owned Virgin Music Group. In November 1997 Virgin Music Group oversaw the production of the commemorative album Diana, Princess of Wales Tribute , which raised more than $100 million for charity.

By 1998 Branson's golden touch showed signs of fading. Except for Virgin-Atlantic most of the Virgin corporate family was floundering. Virgin Vodka was withdrawn, and Virgin Cola struggled to find a market. Publicly traded companies such as the Brussels-based airline Virgin Express and the U.K. clothing retailer Victory Corporation did poorly on the stock market. Critics wondered whether the middle-aged Branson could continue to play the role of the brash outsider to a younger generation of consumers. Branson responded by cutting his losses with some companies and launching new ones. In 1999 Virgin Cinemas sold its U.K. theaters to a French company for £215 million. Also in 1999 Branson sold 49 percent interest in Virgin-Atlantic to Singapore Airlines for $960 million, reportedly to help finance weaker Virgin companies. He also hired a new strategy chief, Gordon McCallum, to bring greater discipline and focus to marketing the Virgin brand overall.

Branson took a financial beating, according to some estimates having lost more than half of his personal fortune by 2001. (His net worth was estimated by his financial advisers to be $2.6 billion in 2003.) Branson continued, however, to dream up new ventures, including a chain of U.K. health and fitness clubs (Virgin Active) and an online music service (Virgin Digital). One project, Virginstudent.com, was a youth-oriented Web site that recalled Branson's Student days. In interviews Branson dismissed talk that the Virgin brand had become overextended. "That's been said for about 30 years," he told Gyles Bandreth of the Sunday Telegraph . "I'm not somebody who believes in money sitting on deposit in bank accounts. When I make money I reinvest it straight away in new ventures. We're Britain's largest group of private companies. Last year we turned over about £3 billion. In three years time I expect that to be £6 billion" (February 25, 2001).

During the period of retrenchment Branson remained a high-profile spokesman for the Virgin group. His stature as one of the world's most famous and influential businessmen appeared to survive his setbacks. Branson became Sir Richard when he was knighted by Queen Elizabeth II in 2000. He continued to champion causes such as his ultimately unsuccessful campaign in 2003 to save the Concorde aircraft. In March 2004 Branson signed a contract with Fox Television to star in his own reality series involving several aspiring billionaires sharing adventures with him around the world. Well into his third decade as an entrepreneur Branson continued to blur the line between business and pleasure, money making and gamesmanship. "He's not driven like other people. He's driven to do stuff," the Virgin executive Tom Alexander told Betsy Morris for Forbes . "The money is the byproduct. If it makes money, well, then great, because then he can go off and do more stuff. Doing nothing is not an option. If you've ever been on holiday with him, it's hard work."

See also entry on Virgin Group in International Directory of Company Histories .

sources for further information

Bandreth, Gyles, "How Does It Feel to Fail, Richard?" Sunday Telegraph , February 25, 2001.

Branson, Richard, Losing My Virginity , New York: Times Books, 1998.

Cowe, Roger, "Virgin: A Brand Too Far?" Marketing , September 17, 1998.

Dearlove, Des, Business the Richard Branson Way , New York: AMACOM, 1999.

Jackson, Tim, Virgin King , London: HarperCollins, 1994.

Morris, Betsy, "What a Life," Fortune , October 6, 2003.

Sheff, David, "Richard Branson: The Interview," Forbes , February 24, 1997.

—Barry Alfonso



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