INTERVIEW: Andrew Richardson, ex-M/D Scotsman Publications
‘It was clear the CEO didn’t want to hear bad news’
There is something about Andrew Richardson’s demeanour which verges on nonchalance but should not indicate any lack of ambition or desire to get things done.
In a quick run through his CV, he casually mentions that he arrived in Scotland “after leaving the Seychelles”.
The story has been told before, but is worth repeating: executive with multinational company and all the trappings of working on a sun-soaked paradise island gives up his job and moves to rainswept Scotland.
“Yes, I know it sounds a little crazy,” he says with a boyish grin. “I was working for Diageo as managing director of Indian Ocean Beer.”
Is that a brand? He laughs. “No, it meant I was not responsible for spirits. It’s the name of the region, although I suppose it could have been a brand. I never really thought about it.”
He slips in that the role also involved monthly trips to Mauritius, another holiday hot-spot. “I had to visit the Guinness brewery there”, he says, before explaining that Diageo moves its executives periodically and his “time was up”. He had to decide where to go next and, in any case, the family was itching for a return to the UK.
“Diageo wanted me to go to London. We didn’t fancy it, so we came back here,” he says, referring to Edinburgh, his birthplace. Diageo’s senior positions in Scotland were mainly in production so he left the company and eventually took up a role with newspaper group Johnston Press, owner of The Scotsman.
It was to be the beginning of a turbulent five years during which the title went from being company flagship to a “problem child”.
He offers an ironic laugh when recalling that the company was making more money than at at any time and did not see two big dangers that were lurking – the advertising slump and the growth of the internet.
“At the time they [JP] were making a lot of money for shareholders but they were not investing in the business as they didn’t see the need. They were only looking at margins and would not take any risks that would erode the margin.
“In my view they didn’t know what they were doing when they bought The Scotsman. It wasn’t appreciated how different it was to the rest of the group. There were constant frustrations that it could not be like the other titles and achieve the same margins. They didn’t like the big salaries and big egos. It was seen as a problem child.”
“The internet was on the horizon, but at the time it was not seen as a major threat. The company was still looking at acquisitions.
“There were no signs of any trouble, but the recession and the internet meant advertising just moved online. It went to Autotrader, Right Move, Gumtree and others. The internet was a blind spot for Johnston Press and you could say for the newspaper industry as a whole.”
I was told: You’ve been handed a poisoned chalice
He succeeded Henry Faure Walker as head of The Scotsman titles, moving into what were then JP’s impressive headquarters in Holyrood Road bequeathed by former owners the Barclay Brothers. It was to mark the beginning of a quick and dramatic decline that led to the titles vacating an eventually rundown edifice now the home of a computer games company.
“I remember saying to Henry that I couldn’t see how we could make money. He just said: ‘You’ve been handed a poisoned chalice’.”
Richardson says that when John Fry succeeded Bowdler in 2008 he saw a need to merge JP with another company to achieve the benefits of scale and cost-cutting, but his plans came to nothing.
Instead, the crisis escalated and the board was left with a need to control costs. “The loss of advertising was a real concern and was way beyond the company’s expectations, but the online advertisers like Gumtree had grown quickly. The company was asking whether it would come back. The short answer was ‘no’.”
Former BBC man Ashley Highfield was drafted in to replace Fry and launched into a turnaround of the company that he recently admitted was a bigger challenge than he anticipated.
Highfield arrived oozing confidence that he could tackle the company’s root problems and build a digital champion. Richardson’s observations on the company’s prospects were considered “too negative” and in 2013 he found himself looking for another job.
“I was warning that the industry was sliding to the edge of the precipice and the The Scotsman was at the head of the queue.
“I was just giving the true position. But the chief executive clearly didn’t want to hear bad news.
There was no sign of it making money
“It was a sad decline and a very quick one for the newspaper industry which had gone from living like kings to selling off bits of their businesses to survive.
“Apart from that, I loved working for The Scotsman. I am from the area and it was fantastic to be able to meet and speak to people in important positions. But behind all that the business was really struggling and there was no sign of it making any money.”
Richardson returned to the food and drink industry in which he began his career with Courage before a spell with biscuit firm McVities. He wanted an overseas posting and found it by accepting a job as managing director with Diageo in Cameroon where the company had more than a thousand employees. From there he moved to the Seychelles for four years.
These days he’s helping to run a micro-brewery where he is getting used to working in the small company sector. For the first time in his career there are no sub-ordinates running around making things work. It means handling several roles and, on occasions, getting his hands dirty.
He joined Black Wolf Brewery after meeting Graham Coull, one of the founders, and helped engineer a £200,000 finance package from Close Brothers and Scottish Enterprise to build a bottling line. It will transform its prospects, allowing it to increase production and move into contract bottling.
There are now 10 staff at the brewery and he admits that after the exhausting cost-cutting that dominated his time in the newspaper sector he enjoys working in a growing business.
Beer sales are falling, but craft beer is growing. This demand has encouraged more entrants with 560 small breweries now operating across the UK.
It has put choice in the hands of the pubs, as well as the customers.
“Pubs are now offered so much choice they are able to rotate beers on a regular basis,” he says.
This has increased price pressures and demand may eventually lead to over-supply, but he says there have been no closures that he knows of, suggesting there is still room for more.
“People have been talking about saturation for two or three years but new breweries are opening so I would hesitate to say we are there yet.”
Birthplace: Edinburgh, grew up in North Berwick
Educated: Edinburgh University (history); MBA London Business School
Career highlights: English Tourist Board, Courage, McVities, Diageo, Johnston Press, Black Wolf Brewery.
What is your business philosophy?
It was given to me by a former boss at Diageo: Work hard, have fun and make a little money
What annoys you?
I have a big bonnet and there are a lot of bees in there. Arrogance, corporate speak, management not being honest and preferring to dress things up, people who promise and don’t deliver.
Who or what do you admire in business?
Entrepreneurs. Those who start with very little and have a go. Starting a business is a hard thing to do.