Virgin King (Text Only)

Branson looked inside doubtfully. ‘How much did you agree to sell them for?’

The man replied that he wanted £1 each for them.

‘I’ll give you 50p apiece,’ said Branson. Within half an hour, the records had been stacked on the shelves inside South Wharf Road; within another few days, they had been sold by mail-order at £3 apiece to fans of Jimi Hendrix.

It was the purchase of the Manor, however, which made Caroline Gold and her husband realize that Branson was an entrepreneur whose powers of persuasion had to be taken seriously. He may have been only twenty-one at the time; he may have climbed over the wall of Shipton Manor with Tom Newman; but he was now beyond doubt the owner of a charming country house, complete with its own croquet lawn and swimming-pool. Including its attached cottages, the Manor had cost Branson £30,000. Some of that sum had been lent to the young entrepreneur by an aunt. The rest, however, came from Coutts Bank. Dressed in the pinstripe suit that Caroline Gold had taken him to buy, and in the black shoes with which she had advised him to replace his brown ones, Richard Branson had been given a mortgage of £22,500.

Soon after the purchase was complete, the sound of footsteps alerted Caroline and Rob Gold to the fact that they had a late-night visitor to their boat. It was Richard Branson, pale, shaken and extremely distressed, and he was in an appalling state. At first, he could say nothing but ‘Oh no, oh no.’ Only gradually did his story come out.

Rob Gold’s younger sister was married at the time to a man called Andy, who owned a Transit van. Branson had received an order to send some records to Belgium, and had asked Andy to deliver his consignment in his van. Somehow, in the course of the deliveries, the two men had discovered a loophole in the customs procedures at Dover. When you passed the customs post, your papers would be stamped so that you would be able to prove that the records had been exported and thus reclaim the purchase tax you had already paid on them. But there seemed to be no proper arrangements for checking the records, or for making sure that they really had been exported.

Here, surely, was an opportunity for a young businessman. Instead of exporting the records that your documents showed you were carrying, why couldn’t you fill in the paperwork and reclaim the tax as normal, but sell the ‘exported’ records in London and instead take to Belgium some old deleted records, picked up for a song from a company that was about to throw them away anyway? Come to think of it why bother to go to Belgium? The system at Dover seemed to be based entirely on trust; nobody was there to see if you simply drove around the docks and then came back to London without even getting on to the boat. Better still, there was no need even to go to the trouble of buying the old records; to a dozy Dover customs officer, a vanful of record sleeves with nothing in them would do just as well.

As Branson made trip after trip, revelling in the ease with which he was increasing the profits of his mail-order business, he never stopped to consider that the customs men might be less dim-witted than they seemed. But they were. The Transit van had been tailed; and the records he had been selling in London instead of exporting had been marked with an ‘E’ in fluorescent ink. An anonymous tip-off gave Branson a few hours in which to try to hide the evidence. But he was arrested at his houseboat, taken to Dover, and charged with producing fraudulent paperwork under the Customs & Excise Act 1952. The following morning, after a night in the cells, he was committed for trial. His mother, to whom the tearful Branson had relayed the news over the telephone the previous evening, came up by the morning train and offered the family house as surety for his £30,000 bail.

To his enormous relief, Branson discovered over the course of the coming three months that dealing with Her Majesty’s Customs & Excise was almost like a business negotiation. Although the maximum penalty for what he had done was two years’ imprisonment, the investigators seemed to have no special desire to send Branson to gaol. True to their occupations as taxmen, what they wanted instead was money. Before the case came to trial, therefore, Branson and the customs settled their little dispute as follows: he would make an immediate down payment of £15,000, and would then pay taxes, duties and charges to the tune of another £38,000 over the next three years. Given the size of Virgin at the time, these were daunting sums of money to find. But he would have no criminal record, and he was free to go back to his mail-order business.

When they heard the story on the night after Branson’s appearance in court at Dover, Caroline and Rob Gold were sympathetic. But they were hardly surprised. Some weeks earlier, Richard Branson had discovered that Caroline’s father, Francis Rodgers, was a shipping agent who had just set up a containerized freight business. He had approached the older man with a request for advice and for a place to store some records. Caroline was not present at the conversation. But Francis Rodgers left her in no doubt: he had smelt a rat, and wanted nothing at all to do with the scheme. The customs scam was no adolescent mistake, as the investigators might have inferred from Branson’s earnestness and youthful enthusiasm; it was a deliberate and quite knowing attempt to break the law and get away with it.

Luckily for Branson, his neighbours on the canal saw no reason to be judgemental on the matter. More luckily still, the Customs & Excise never found out about Branson’s approach to Francis Rodgers. By the time they had begun to investigate the customs fraud, Caroline Gold had already given up her job to have children. She was no longer an employee of Richard Branson’s, so nobody ever thought to interview her.

TWO

One Per Cent of Tubular Bells

‘NIK AND RICHARD,’ Simon Draper would later recall, ‘had no particular feel for the music business. They found themselves in it by accident. They were public-school boys who had dropped out of education.’

While the two budding entrepreneurs did what they were good at – Richard sweet-talking the press and striking daring deals, the more introverted Nik reading his management magazines and trying to think of ways that Virgin could cut costs – they needed some real musical expertise. Steve Lewis, for all his encyclopaedic knowledge of Motown, was at first only a part-timer, he was also still at school. Tony Mellor, a former trade union official, had been in charge of buying stock for the mail-order company and the shops; but he soon disappeared to America, never to be seen again. So there was a vacuum for Draper to step into. After Branson’s brush with the Customs, it had become clear that Branson’s plan to start the record label would have to wait a little. In the meantime, Simon Draper would become the company’s record buyer.

Over the next two years, Draper’s work gave him an invaluable insight into the sort of music that would sell. Although the record shops and the mail-order business were not profitable, they were a goldmine of information about the likely future habits of the record-buying public, for the tastes of the Virgin clientele were more adventurous than those of the average teenager. For instance, the mail-order company received a growing number of requests for records by an obscure German band called Tangerine Dream, which Draper fulfilled by finding out where the records were produced and then buying a job lot of them. So it required no great insight to see that the band might be worth trying to acquire for the new Virgin label. ‘When we signed Tangerine Dream in 1974,’ said Draper, ‘it looked like clever stuff. But we knew it was going to sell.’ It did – by the million.

The great coup of Virgin’s early years came via a different route. While the Manor was preparing for the first formal booking of its recording studio in 1971, an obscure band was allowed to come and rehearse there. During a quiet moment, one of its members produced from his pocket a demo tape that he had made and handed it over to Tom Newman, who was in charge of the studios. This was an occurrence that would become tiresomely familiar to anyone involved in the record business. But Newman listened to the tape, and he liked it; so did the other Virgin people he played it to. A few weeks later, he came back to the guitarist and told him that he should try and get a recording contract.

Simon Draper heard the tape later that year, by which time the young guitarist had been turned down by almost every record company in London, and pronounced it ‘incredible’. He took a copy home to his flat, and played it time and again to anyone who would listen to it. The recording elicited an extraordinary reaction. When Virgin Records was ready to start its label, Draper decided, he would tell Richard to sign up Mike Oldfield.

Oldfield was an unlikely pop star. Son of an Essex doctor, born in Reading, he had an unhappy childhood; his mother drank too much and was prone to roller-coaster changes of mood. By the end of his teens, it was clear that Mike, too, was unable to face life as an independent adult. He was painfully shy, and was as lacking in self-confidence as Richard Branson was full of it. Women were attracted to him, not so much for the physical charms of his underdeveloped body and adolescent beard as for his air of vulnerability and for his bouts of depression from which only constant reassurance and attention could redeem him. Yet Oldfield was by no means an inadequate musician. He had been playing guitar professionally for five years, and had made two albums with the Whole World, Kevin Ayers’s group. He had made the demo tape that he had given to Tom Newman entirely on his own, working painstakingly at home on a battered Akai tape-recorder that Ayers had lent him.

Oldfield arrived at the Manor at Draper’s instigation, and spent a week in the recording studio there without even having a written agreement with the Virgin record label. In the event, there was no hurry; it was to take months of work before the album was ready. Oldfield played more than twenty different instruments, laying each performance down on the tape on top of the mixture that was already there. This procedure, known as ‘overdubbing’, allowed him to build up a full-length instrumental album with only incidental help from others. It was a challenging use of the state-of-the-art recording equipment that Branson and Newman had agreed to buy. The machinery stood up to the punishment, but the tape did not. After being passed across the heads thousands of times, the master tape of Tubular Bells came dangerously close to wearing out. For Oldfield was not content to remake what was already on his demo tape, and to finish off the as yet uncomposed second half of the record. He wanted to polish and repolish; hence the weeks of work.

Richard Branson had been to a trade fair in the meantime, and had been warned that it would be commercial suicide to publish a record without any lyrics. Once persuaded, however, he set to work with gusto. By the time the album was complete, Branson had managed to learn a little about music industry contracts. He had asked Rob Gold, his houseboat neighbour, to explain to him how record companies worked – and the obliging Gold had put down the basics on a single sheet of yellow foolscap paper. ‘He hardly knew what a record was,’ Gold recalled. ‘I told him that you go to a distributor to distribute your records, and that you get more if you’re a production company that makes its own records. Your percentage is higher if you do your own marketing.’ Crucially, Gold also told Branson what sort of figures he should be aiming at.

The deal that Branson struck with Oldfield was a standard record industry contract of the time. In fact, it was copied directly from an Island Records contract that Branson was given a copy of. Oldfield would give Virgin worldwide rights to Tubular Bells and to a fixed number of albums that he would make after that. In return, he would be paid a flat-rate royalty of five per cent of sales (but not on samples or records returned by retailers). He would also receive the equivalent of an annual salary of £1,000 a year, though this would be deducted from any future royalties he might earn.

This deal was no less attractive than the deals which hundreds of other aspiring rock stars had received; in fact it was more attractive, since Oldfield had failed to find a recording contract with a number of other labels before coming back to Virgin. But the seeds of ill-will were laid in that agreement. Oldfield had signed at the kitchen table of the Manor, negotiating directly with Branson. More important, the albums he was contracted to produce could easily be ten years’ work; they would certainly tie him to Virgin for a period of time that was longer than the entire creative career of most rock musicians. And Richard Branson, the man with whom he would have to negotiate future changes to these arrangements, had become Oldfield’s manager.

Branson’s next job was to find a way of distributing Tubular Bells. Island Records, Britain’s leading independent record label at the time, offered to license it from Virgin in return for a royalty. Branson refused: remembering the advice he had received from Rob Gold, he suggested instead that Island should do no more than press and distribute (P&D) the record on Virgin’s behalf. David Betteridge, Island’s managing director, told Branson he was mad. If it accepted a straightforward licensing deal, Virgin would be able to hand Tubular Bells over to Island and forget about it, but still pocket the difference between the royalty it was paying Oldfield and the much higher royalty it received from Island. By insisting on a P&D deal, Virgin would miss out on an advance from Island, and would itself have to carry the risk of financial failure. In any case, said Betteridge, Island did not do P&D deals; the other small companies for whom it distributed records were signed up on a full licensee basis. But Branson was adamant. In the end he got what he wanted.

Tubular Bells was released in May 1973 along with the three other albums that made up the beginning of the Virgin Records list. But it was on Oldfield’s work that Virgin concentrated its attention, and where Branson’s salesmanship came into its own. Having had the nerve to telephone businessmen he had never met before to ask them for advertising for a student magazine, the young entrepreneur had no hesitation in making a nuisance of himself in the offices of radio stations and music papers and magazines, trying to get air time or publicity for his new Oldfield album.

At first, the job of selling the record seemed daunting: albums were supposed to be made up of a dozen or so three-minute songs, not of two long continuous instrumental compositions. But once the record had received the honour of being broadcast in its entirety on BBC Radio One by John Peel – a disc jockey of undisputed authority and street credibility – its future was assured. Within a matter of weeks, it was the number one selling album in the British pop charts. Within a few weeks more, Branson had flown to the United States, and sold a package of the four inaugural Virgin albums to Atlantic Records for three-quarters of a million dollars. Ahmet Ertegun, Atlantic’s chief executive, sold Oldfield’s record in turn to the makers of a new film who were looking for a soundtrack. The Exorcist, as the film was called, became a hit in America; so did Tubular Bells. It reached third place in the US charts.

That single album, and to a lesser extent the Tangerine Dream LP Phaedra released the following year, put Virgin on the map. It also unleashed a torrent of money into the company’s bank accounts. The £38,000 that Branson had to finish paying to the Customs, and the continuing dribble of losses from the shops and the mail-order business, suddenly came to seem insignificant. Virgin Records was in business as an independent label; and Simon Draper now had enough money to sign the bands that he wanted.

In July 1972, four days after his twenty-second birthday and while Virgin Records was preparing its first albums for release, Richard Branson married. His bride was Kristen Tomassi, a tall, slim blonde New Yorker who had come to the Manor a year earlier on the arm of an Australian boyfriend. Branson, struck instantly by her high-cheeked, almost Scandinavian good looks and by his discovery that her sense of fun matched his, decided instantly to make her his own. Like him, Kristen loved friends, practical jokes, convivial evenings with a bottle of wine and a joint or two, and sports. But she was still a student when she visited the Manor, and had been intending to go back to the university architecture course from which she had been taking a summer break.

Branson won her with the same impulsive daring that had already helped him to start a magazine and a mail-order business. On the day that her two-week holiday in England was over, Kristen received a telegram, A BOAT IS SINKING, it said, and asked her to ring a telephone number. Kristen rang him from a call box to thank him for the telegram, but insisted that she was going to leave all the same. When she went back to her packing, she was met by a friend of Branson’s who had come around, on his orders, to take her baggage around to the houseboat. She followed in a taxi, to find Branson and Powell deep in a business discussion. Branson opened her case, upended it on the floor, and confined talking to Nik Powell as if this were the most natural thing in the world.

After a few weeks, Kristen began to fret about her half-finished architecture course, and (though she did not tell him this) the live-in boyfriend that she had left in America.

‘You don’t need to go to architecture school,’ said Branson, with the unshakeable confidence of someone who knew that university could not have taught him anything he did not already know. ‘You can do the architectural work on the Manor.’ Before the summer was out, Kristen therefore found herself making regular visits to the Phillips auction rooms in nearby Bayswater, buying up huge pieces of cheap antique furniture for the Manor. Her best find was a second-hand billiard table, which cost £50 and required six people to manoeuvre it into position in the old house.

She soon found her own individuality being subsumed into a set of shared concerns about the business. Every aspect of Branson’s life – from his dealings with colleagues at Virgin to his negotiations with the Inland Revenue – became part of hers. Kristen also found that she got on very well with Eve Branson, Richard’s mother. Like her own mother, the head of the Branson household would tolerate no laziness or newspaper reading on Sunday mornings. Instead, guests at the Surrey farmhouse were required to swim, play croquet or feed the pigeons. When Richard and Kristen went to stay at the family house before they were married, they were invited to join his parents in their bed in the morning for sausage and eggs and strong tea.

The wedding took place at the village church of Shipton, and the party followed immediately afterwards at the Manor. It was an odd occasion; Branson’s friends and colleagues dressed up in morning dress and grey top hats, their long hair splaying oddly from the sides. Branson’s bank manager from Coutts, a guest of special importance given the cash-flow requirements of the business, was first on the receiving line. Kristen’s father paid for the party.

When they returned to London after a suitably energetic holiday on a Greek island, Kristen began to prepare for the couple to move from the houseboat on the canal to a small terraced house in Denbigh Terrace, near Portobello Road. The bank manager justified his invitation to the wedding by providing them with a mortgage that allowed Branson to offer £80,000 for the house; in keeping with the gap between their means and aspirations, Kristen then devoted herself to decorating it in style on a shoestring, making the curtains herself and imbuing the house with a sense of style and proportion befitting a former architecture student. Their one extravagance was a huge, lavish sofa in which Branson would slump as he made endless telephone calls. Meanwhile, Kristen would cook – brilliantly, her friends told her – for the dinner parties whose frequency was matched only by the short notice at which she had to prepare them. In quieter moments, the two would stroll down to Holland Park and talk about their ambitions to live one day in one of the huge stucco houses there that were now so far beyond their financial reach.

As they settled into Denbigh Terrace, Kristen became used to seeing her husband deep in conversation at all hours with Nik Powell, Simon Draper and Ken Berry, a clerk whom Branson had plucked from the accounts department to become his personal assistant. It did not take her long to realize how important his work was to the man she had married. Any doubt that there might have been was dispelled by Branson’s impulsive decision to give Mike Oldfield the Bentley that he and Kristen had received as a wedding present from Ted and Eve. The splendid car was given to Oldfield as a reward for agreeing to perform Tubular Bells at a concert at the Queen Elizabeth Hall. Kristen was given strict orders not to tell her mother-in-law, for fear of hurting her feelings – and it was in fact long, long afterwards that Eve discovered what had happened.

Kristen’s first response to Branson’s devotion to business was to try to behave like him: to throw herself into design decisions about the Manor, or to rush to and from the Virgin Rags clothes shops that were opening up inside the record stores, trying to make some order of the chaos that was the mark of Virgin’s first and last venture into clothes retailing. She also worked hard as Branson’s back-up in mollycoddling Virgin artists – spending a number of days, for instance, cheering up Mike Oldfield at an isolated country cottage, and at one point arranging to return a Mercedes roadster that the pop star had bought on the spur of the moment and then decided a week later that he did not like. But soon Kristen tired of trying to compete with her husband, and began instead a crusade to attract his attention. But he did not take the hint – not even when Kristen sent him a poem about the fact that they always seemed to meet in the hall at Denbigh Terrace, when Branson was rushing busily to his next oh-so-important meeting.

Kristen would afterwards declare that her decision to start sleeping with other people was a reaction to the fact that Richard had let his work get out of control. It was not a question of being unfaithful; even if she spent the entire night away from home, she never sought to be secretive about what she was doing. More, it was a cry for help. ‘I wanted some private life for us, that’s all I wanted,’ she remembered. ‘I just wanted half an hour a day.’ Branson, meanwhile, suggested that the couple should have children. His wife could not resist responding with sarcasm, asking him how he intended to fit in another obligation into a life which left little enough room for her as it was.

Matters came to a head when Branson asked Kristen to help him entertain a rock star whom he wanted to sign to the record label. The artist’s name was Kevin Ayers; it was he who had lent Mike Oldfield the tape machine on which he recorded his demo of Tubular Bells. He was older than Branson and Kristen, and he had all of her husband’s self-assurance without the naivety. The couple went to meet Ayers and his woman friend at the shop in Notting Hill Gate, drove the pair down the motorway to see the Manor, and then brought them back to the houseboat in the evening for dinner. Kristen cooked lobster while Richard told the jokes. Everyone drank too much; Ayers produced some cocaine, which the inexperienced Branson sniffed with him for the first time in his life – and the evening ended with Kristen in the arms of Kevin Ayers. She later claimed that Branson sought consolation from the woman that Ayers had brought with him; Branson denied that this was the case.

Although the spark of mutual attraction between his wife and Ayers was evident the following morning even to Branson, the marriage did not end immediately. Ayers pursued Kristen with flowers, presents, letters and telegrams. She went to Australia for a while to get away from everything and think, but Ayers found her there. She went to live with him briefly in France, returned to England for an attempted reconciliation with Branson – and then left again, this time for good. On the day she left, Branson was on the telephone at Denbigh Terrace, engrossed in a long negotiation to sign the Boomtown Rats to Virgin Records. The echo of his voice, raising the offer minute by minute, resounded in her ears as she slammed the door of the house for the last time. Months later, when she was living in a house in France without electricity and utterly cut off from the outside world, Kristen would imagine as she walked in the fields that she could hear the sound of the ringing telephone that had helped to destroy her life with Richard Branson. What almost broke her heart was the fact that Branson later offered to change his entire life in order to bring her back. He was willing to give up work, go and live in the country, make another life – and he told her so in letter after pleading letter. But it was too late. They divorced, citing Kevin Ayers as the co-respondent.