20 Feb
2004

Bankier toasts his new role
IAN Bankier has packed a lot into the past 13 months. The former corporate lawyer with McGrigor Donald has sold a struggling distiller for £50 million, effectively saving it. He has splashed out £10m on two of the most high profile brands in the whisky industry. He has lost a prime chief executive’s job. And he has spent £1.5m of his own cash on a chain of shops.

In December 2002, Bankier was chief executive of the East Kilbride-based Burn Stewart Distillers, when its sale to Trinidad-based venture capitalists CL Financial brought to an end a prolonged period of uncertainty for the producer. With the promise of substantial sums of money, he was looking forward to leading the firm into an exciting programme of international expansion. However, things didn’t work out quite as planned.

"It was the old story," he says. "You get a new foreign owner, they make a number of promises, they regard themselves as not sufficiently expert in a particular field in another country and, therefore, rely heavily on the local team. Then after a while they get impatient and they get excited and they think ‘no, no we can do this ourselves’.

"The chairman of CL, Lawrence Duprey, and the executive director, Arnaud de Trabuc, thought they could run the firm. I made it very clear from the outset there can only be one chief executive.

"It was very disappointing. It was a serious low point, but one adapts. If something is going to go, you let it go and move on to other things. I don’t bear them any hard feelings. If I saw them now, I would get up and shake their hands. Business is different, things happen."

Three weeks ago, Bankier, 53, started making things happen, for himself. He paid £1.5m for the Whisky Shop retail chain, raising a few eyebrows among analysts in the industry, who questioned his shift from producer, to seller.

"The level at which I exited the drinks industry was quite high, therefore there was only a handful of jobs that could replicate the one that I last had. Surveying that particular scene, I could not see any re-openings for me," he says.

"But when I looked at the Whisky Shop it became clear that there was a real opportunity, and it was a business I could add value to."

After reading law at Edinburgh University, Bankier honed his corporate skills as a partner in the Glasgow office of top law firm McGrigor Donald.

"We created the leading firm in the west of Scotland and it was very successful for 12 years," he says. "I was in the corporate leveraged buy-out market. I did a lot of big deals in London and I was quite well known in the venture capitalist market."

His break came in 1991, when he was voted Scotland’s top corporate lawyer: "It rocketed me in terms of what I thought I could do. Deep down, I didn’t regard myself as a very good lawyer.

"My real strength was in advising clients in what they should do. I was not a typical lawyer - I took a position on everything and directed clients which way they should go."

Bankier found himself increasingly drawn to business. After completing his final deal, heading the Herald newspaper buy-out from Lonrho in 1993, he decided to move on. "People were surprised. But big decisions in life come quickly and you have to move fast," he says.

He set up a management consultancy and it was through that that he met Burn Stewart’s then chairman, Bill Thornton. The company had listed in 1991, but the mid-1990s saw a downturn in the company’s fortunes as whisky prices tumbled and the company found itself in a tight spot. The share price plummeted to pennies, and as Bankier admits, "it was a very difficult time".

Burn Stewart had to seriously rethink its strategy, as it continued to miss the necessary return on its "private label business", where it supplied whisky to supermarkets for their own-label scotch. "The problem with Burn Stewart was pricing. We needed to find a solution that worked fast. We did a lot of brave things - we put prices up when everybody else was putting them down - but above all, we were utterly consistent with what we wanted to do."

Bankier and his team gradually completely reconfigured Burn Stewart from a volume driven, commodity-type business, to a branded business and in December 2002 he earned his reward, by leading the £50m takeover by CL Financial.

The owners of Angostura, Hine in France and US-based rum producer Todhunter, said it wanted to create a global drinks group, headquartered from Scotland. Flush with money, within months Bankier bolstered its whisky portfolio by paying rival distillers Edrington nearly £10m for the Bunnahabhain malt and the Black Bottle blend to complete a portfolio that also contained Tobermoray, Deanston and Ledaig.

Then, in November, the relationship turned sour and the architect of the business’s recovery was out of a job. The new owners, Duprey and de Trabuc took over, and it is now run from Geneva, though Bankier maintains that Scotland was a realistic base for a global headquarters.

"If you look at William Grant’s, they will tell you they are headquartered in Strathclyde business park, Edrington is based in Glasgow ... so it is a realistic ambition," he says.

But for now, away from the politics of his former employer, Bankier says his targets are firmly set on the fortunes of his new venture, for which he has three immediate goals.

In the short term, he wants to improve the instore marketing and merchandising, which he feels has stood still for three years as its previous owner looked for a buyer; second, he wants to improve margins and third he wants to roll the brand out across the UK.

"When you look at our competitors they are all one-two shop, owner-occupier businesses. Nine shops, with a professional structure in place, puts us on the map. We are the largest independent specialist retailer of premium Scotch whiskies in the UK … and malt whisky is where the action is."

Bankier says he is actively looking to grow, particularly in big cities, south of the Border, concentrating on large shopping centres. But there will be no rapid expansion this year - he has put in as much personal cash as he can afford.

"In the short term," he adds, "it will be about improving what we have, and probably getting one of the new outlets open."

Article Courtesy of The Scotsman

scotsman.com