As the region’s working rich battle against the wider economic conditions, Philip Beresford reports on the decline of North West.
A grim year to report for the working rich. The wealth of the top 100 in Insider’s rich list has fallen sharply from last year’s record £15.25bn to £14bn. This £1.25bn fall, the first in more than a decade, reflects the battering caused by the credit crunch, collapse in consumer confidence and price hikes across the board.
The list is still headed by the region’s most tenacious and canny dealmaker – John Whittaker. But even he is not immune, and with property prices imploding we have chopped £200m off his valuation this year to £1.3bn.
We have also ditched the aristocrats, footballers and pop stars to concentrate on the real wealth creators, creating not just their own wealth but the jobs and profits on which we all thrive. By our reckoning, the top 100 employ more than 100,000 people, mostly concentrated in the North West. So far there is little evidence of them shedding jobs, but if the downturn is prolonged that will not be far behind. The diversity of the economy should help the region through the worst, in contrast to the 1980s and 1990s, when swathes of local industry were decimated.
Our working rich also follow this pattern of diversity, although the number of property and construction tycoons has fallen from 37 to 29. But it is still the largest sector. Encouragingly, industry, including the high-tech sector, is on the rise with 24 in the list compared with 19 in 2007.
Sterling’s weakness against the euro should also boost the niche manufacturing tycoons of the region who feature.
The fact that several tycoons have sold up in the past year and not disappeared is also encouraging. Many are continuing to run their old operations as part of larger groups. Their expertise allied with greater marketing firepower or investment should be good for the future.
So, Kirit Pathak, having sold his spice business near Wigan to Associated British Foods for £200m, is running the whole ABF world food operation. Jon Burton, too, remains at Traveller’s Tales, the computer games operation, even after its £100m sale to Warner Brothers in 2007.
But the fall in the number of women in the top 100 is discouraging. We had 11 last year, which has fallen to eight. It is far too few, even though it includes the redoubtable Doreen Lofthouse of Lozenges fame in Fleetwood, which has produced record profits.
Similarly, the rise of the meritocracy has been checked. While the bulk of the working rich have made the money themselves, a quarter inherited some sort of silver spoon – up from 21 last year. This is still far lower than any other rich list, however, and demonstrates that in the North West the notion of wealth creation is not restricted by class, creed or colour.
Our representation from the Asian community has stabilised at 11 this year, down one on last year. Entrepreneurs such as Sanjay Vadera, the 39-year-old perfume distributor, and Sandy Chadha, the battery king of Britain, are inspirational for disaffected youngsters from an Asian community that feel more pressure than ever.
In geographic terms, Manchester keeps its lead with 43 of the 100 from the city or its environs (up from 34 last year), followed by 20 from Cheshire (25 last year). Liverpool is third still with ten, but more surprising is Cumbria’s performance, with seven of our top 100 from there.
Despite some encouraging signs of diversity, an identikit portrait of the top 100 entrepreneur is still a white middle-aged male. The youngest is 33 and only two were born in the 1970s. He will have built his own business – based in Manchester – but probably lives in the Cheshire stockbroker belt.
Read the full article in the September 2008 issue of North West Business Insider. Click here to buy online.
Also in: September 2008
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When will the rollercoaster hit the bottom?
Dealmakers look to the second half of 2008. Rupert Cornford reports.