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Tips from the dragon who got burnt

In Inspiration, Leadership - 3 years ago - 5 min

Tips from the dragon who got burnt

If there’s one piece of advice Touker Suleyman wants you to take away, it’s to be very, very sparing with your trust.

Touker Suleyman has an eye for a nice shirt, a penchant for pocket squares and firm belief that good shoes go a long way in business. Hardly surprising, perhaps, for the man who has manufactured clothing for everyone from Ralph Lauren to Marks & Spencer, and who now owns Jermyn Street’s Hawes & Curtis and the iconic British fashion brand Ghost. His £150 million fortune, which secured him a place on this year’s Sunday Times Rich List, doubtless helps, too.

But fashion retailing wasn’t Cyprus-born Touker Suleyman’s first job, or even his first career choice. He began life helping out in his parent’s restaurant in Camberwell, south London, while studying at nearby Peckham Manor School, then went on to train as an accountant in deference to his father’s wishes that he enter a sensible, secure profession.

Touker, however, wanted to get rich. “In those days I could see three areas where you could make money: property, being a celebrity or film star, or fashion,” he says.

So when his weekly wage of £5.50 as a trainee accountant proved too little, and he found the career itself dull and confining, it was fashion that he entered – setting up clothing manufacturer Kingsland Models when he was 18. The company went on to supply high street retailers such as Topshop and Dorothy Perkins; Touker was a millionaire by 21, and ambitious for more.

Tripped up

It was this ambition, however, that tripped him up. “I was in business, doing quite well… and I got myself into a position where I felt that I knew it all at quite a young age,” he says. “What I didn’t know was that there was a world out there that was way out of my league.”

His introduction into that world came when he expanded his business, buying a 29% stake in clothing manufacturer Mellins and then investing in Bamber Stores, one of his company’s retail clients. Both were publicly listed businesses.

“Before I got involved my mentor looked at Bamber Stores’ balance sheets; they looked healthy. He and I did a very quick overview – not a real investigation and due diligence – and came to the conclusion that even if you knocked £5 million off the net assets you would still have a business.”

He took the stake and started trading with Bamber; part of the motivation behind the deal had been the synergistic possibilities of manufacturer and retailer working together. Then, late one Friday, he received a phone call from his mentor, who he had asked to do a thorough review of the books.

“He said: ‘Well, young man, they are £26 million in the red. Everything was falsified.’ It was a bit of a shock. I had been trading with them, I had put personal money in, company money in – and it was a house of cards right down the line.”

Traumatic experience

On the following Monday the company held a board meeting where Touker resigned, the company’s shares were suspended and receivers Cork Gully were called in. “The thought at the time from my advisers was to protect my reputation. There was I, a lamb for the slaughter, a young guy who had been misled.”

Bamber’s failure led quickly to a run on the cash in Mellins, forcing Touker to find a way to raise money or see that company collapse too. He was thinking of a rights issue when a fellow Turkish Cypriot, Asil Nadir, stepped forward. The tycoon behind Polly Peck – now best known for the company’s collapse and subsequent fraud trial, but then a FTSE success story – offered to put up the money.

“I spoke to my advisers and said: ‘It’s an easier way out, we don’t have to go to the market.’ They said: ‘You have four weeks to raise the money, beyond that you will be left trading fraudulently.’” Touker took the deal and waited for the details to be finalised.

“I had great difficulty over the next three weeks trying to get hold of him. Eventually it was a Friday morning, the last day of those four weeks, when I got a call from Asil’s PA saying that he would not be pursuing this transaction.”

Without that money the whole thing collapsed. Mellins went under, Touker’s private company lost the money the public businesses had owed it, and Touker had to sell his house and start again from scratch.

“It was a traumatic experience but it taught me a lot. It taught me not to trust everything I see, and that due diligence is very important.” At no point, however, did he consider giving up.

“I remember that I felt humiliated and betrayed but I could only blame myself. I was also fortunate that I had no children, I was my own person and it was very easy for me to feel that my life was still ahead of me – I was only in my late 20s – so I took all my experience, partnered up with my brother and very quickly focused on work again.”

Back on track

That work became Low Profile, a womenswear manufacturer with factories in Turkey, Georgia and Bulgaria. As it grew more and more successful, Touker invested the profits – opting this time for commercial property in London rather than listed companies.

For a while it manufactured shirts for Ralph Lauren; when the American brand decided to move all its production to the Far East, Touker bought his own shirt company, Jermyn Street’s Hawes & Curtis, for a pound.

“I then approached the creditors, said: ‘Look guys, there’s no business, it’s going to go bankrupt’ and did a deal with them all at between 10 and 15 pence in the pound, and paid them off.”

He then used his own finances – he avoided debt – to transform the business from a ‘small, slightly decrepit shop’ into a big player in the shirt market with 28 branches here and abroad. “It’s now becoming more of a lifestyle brand, somewhere between Ralph Lauren and Hackett. It’s not just shirts.”

Touker’s other high-profile brand is another he brought out of administration – Ghost, the British designer label known for its vintage-style dresses.

He already had a licence to produce Ghost-style garments for Marks & Spencer when the company went into administration in 2008, so his decision to buy it was based on an existing relationship, as well as his assessment of the company itself. “I treated it like a business and turned it around so it was making money,” he says.

Touker’s clothing brands have always been better known than his personal brand. But that is all about to change. In July 2015 he became a ‘dragon’ on the BBC TV series Dragons’ Den. What wisdom and insights will he be sharing with the fresh-faced entrepreneurs who appear before him?

“My advice is that you do business with people or companies that you trust but what you have to realise is that everyone in business wants to be successful… and until something is signed, sealed and delivered, do not trust it.”

And, of course, get the best lawyers you can afford.

This is an edited version of an article which first appeared on Strategies for growth.

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