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MISTER MAJESTIC

It's a strange experience, meeting Tim How. On the one hand, everything is tremendously bright and cheerful and open. But on the other hand you have the feeling that all the openness, all the willingness to answer questions, is leading you to cover ground that has already been trodden by every broadsheet journalist who has ever published a smiling photograph of How with a glass of Champagne, toasting the company's half-yearly results. He is incredibly open, but it's all in the public domain, anyway. It's a bit like scanning a retail environment; one where everything is laid out for your inspection and delight, but where you are nevertheless enclosed by four walls and a roof. I kept searching for the looking glass through which I might jump to discover a Tim How full of secrets and mystery, but have yet to find it. Sorry about that. Mind you, as my credit card will testify, I am never one to shun a retail environment. And How's openness is to his credit: There are not many secrets in Majestic; everyone understands how we're doing each week or each quarter. We've run it in a very open style from day one.' Day one was in 1991 - Friday, 13 September, to be precise. But the story starts a little further back, in January 1989, when Bejam, of which How was MD, was taken over by Iceland and he and John Apthorp, now chairman of Majestic, were out of a job. How's career, until then, had taken him from Rugby Cement to Angus Fire Armour, to Polaroid, to Bejam. And when Iceland bought Bejam it was by a majority of 50.1% - the narrowest takeover ever,' says How. Wizard Wine was part of Bejam and thus became part of Iceland, and Apthorp bought it from Iceland, summoning How to join him. John brought me in so that Tony Mason, who was running Wizard, would come; he was crucial. We would not have done it without Tony's wine buying knowledge. For me it was either foolhardy or adventurous: the economy was quite difficult then.' Majestic was for sale at the same time, but was bought, says How, for too much money, and was not well run. But at store level it was always robust.' Two years later it was for sale again; Apthorp bought it and installed himself as chairman and How as CEO, and the process began of turning it round and returning to the basic principles that had made Majestic successful in the first place: good staff, good service, easy parking, plenty of bottles open for tasting and free delivery. Not to mention the quality of the wine, which is what seemed particularly to suffer under the previous dispensation. Majestic had, to all intents and purposes, run out of money when we purchased it,' says How. Kleinwort Benson and Barclays forced the sale for 2.5 million.' It was actually owned by a holding company called Wharfside, which also owned Watsons, a lossmaking off-licence business in Walsall with freehold properties. Some of Watsons' shops were sold by the new owners as going concerns or freehold opportunities, and 0.75 million was re-invested in refitting Majestic stores. It was all done in six months,' says How. There remained the small question of making a profit. How and Apthorp had felt that if they broke even the first year they would be happy, but Black Wednesday, in late 1992, ensured that they didn't. Overnight Majestic's French Franc liabilities became much more expensive, and the dent to consumer confidence that followed meant that the company lost around 450,000 that year. It was manageable,' comments How. The following year's turnover was nearly 1 million. It took two years to turn Majestic round; we were always heading down the right track. We came into 1993 with a white Burgundy promotion: when trading is tough you look at things harder and make braver decisions. When we bought Majestic there was a catalogue of stuff led by how much suppliers would contribute. We've since focused a promotion period on a particular region, and the focus of each must be strong.' So what are the skills that How brings to the party, apart from a seemingly ever-cheerful temperament and an engaging giggle? One source reckons he's the nice half of the "good cop, bad cop" pairing' - the other half being Apthorp. Another source thinks they're equally tough: John has the tougher exterior, but Tim underneath is made of steel.' He keeps himself to himself,' comments another, although a glance at the financial pages might suggest that whenever there's a camera about, How will be in front of it. It's partly thanks to this talent for being media-friendly that the broadsheets seem to treat Majestic as some sort of oracle. We've done well in terms of media coverage,' he acknowledges. We work hard at that. A lot of our customers are in finance and read the financial pages.' All the publicity presumably did no harm when it came to floating Majestic on the AIM in 1996. One of the reasons for the flotation was to increase the profit of the company, and it has worked,' says How. Profits are up from 1.24 million in 1996 to 4.51 million in 2001. Apthorp says of How that he's extremely able, and very much a man for attention to detail. He's probably the only one of us who has been to every single retail outlet.' How, too, lists attention to detail as one of his strengths. Probably people hate me for it. I'm renowned for checking the point of sale in stores: it's something I learnt when I joined retail from selling to retail [his job at Polaroid]. The great level of detail you have to deal with is actually why retailing is such fun. Lazy retailers take their eye off the detail.' The purchase of Les Celliers de Calais SA (for 7.25 million) presumably gives him even more detail to attend to. We looked at France in the mid-90s, but we were too busy expanding Majestic here to want the challenge. Then the opportunity to buy a substantial business came up. I've always known there was a market, because a lot of our customers are buying from our competitors in France. Les Celliers de Calais trades very like Majestic; in fact, it's styled on Majestic. And it's earnings-enhancing from day one.' Calais accounts for 10% of Majestic's sales at the moment, and is more profitable, says How; and while he expects both Calais and the UK to grow, the major thrust of expansion will be in Britain. We could have 50 stores within the M25. And we'd like three in Edinburgh; we have two now. But the weight of Majestic stores will always be southern: the reality is that there are more wealthy people in the south.' And heavens, are they supporting Majestic. The company's latest report is of an 11.3% rise in like-for-like sales over Christmas and an average sale of 129 to customers, who spend an average of 5.50 on a bottle of still wine. It has expanded its mailing list, too, with another seven thousand mail-order customers added since November. Could it all go wrong? How shrugs. A recession can yield opportunities, to some extent. We always promote aggressively, so it would be silly to say we would do it more aggressively. We would cut back on some discretionary spending. But in the early 90s we did not see a like-for-like sales decline, even though the total market slowed. Of course there are diverse scenarios, like snow in the week before Christmas, or supermarkets halving their margins on wine. And a major reduction in duty overnight would be bad; we want a progressive reductionWe want to be seeing growth, and so does the City. We don't always agree with the City view of the business, but at the moment' Shares in Majestic have risen steadily from a low of 222.5p in April 2001, and the company is now valued at 64 million. The chances of something major going wrong are fairly slim,' says How. Nevertheless, it seems unlikely that he will realise one particular ambition in 2002: to sit the WSET Diploma. I sat the Higher Certificate and got an A - I made sure of that. Every year I decide to do the Diploma and never get round to it. I want to learn more about wine, but it's a question of time. You wouldn't put me in the tasting room.' Given his famous attention to detail, the buyers might be quite relieved about that.

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