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This note considers corporate raider and publisher James
Goldsmith.
It covers -
introduction
Variously
described as "Attila the Hun with financial genius",
as "a capitalist grotesque" or just a very spoiled
rich boy, James Goldsmith (1933-1997)
was a contemporary of figures such as Robert Maxwell and
Kerry Packer. With the exception of L'Express,
his attempts to gain influence as a media baron were unsuccessful,
failing in bids for the UK Observer and Daily
Express.
biography
Goldsmith was born in Paris and throughout his life had
a love-hate relationship with England and authority. His
father Francis Goldsmith (1878-1967) was Unionist MP for
Stowmarket from 1910 to 1918, served at Gallipoli as an
officer in the Suffolk yeomanry and after the 1914-18
War was a director of the Savoy Hotel Co, operator of
a chain of luxury hotels in France, giving James a privileged
but apparently lonely childhood exacerbated by a bullying
temperament. Elder brother Edward Rene Goldsmith (b. 1928),
was founding publisher and editor of The Ecologist.
Goldsmith's demeanour as a rich hotel brat failed to impress
contemporaries and teachers at Eton College, from which
he exited in 1949 after winning £8,000 on a £10
bet on horse racing. He studied briefly with a crammer,
leaving after fighting one of the teachers, and then spent
a year gambling before compulsory national service in
the Royal Artillery.
In 1953 he moved to Paris, acquiring a small company distributing
an adrenalin cream for rheumatics and falling in love
with Bolivian heiress Maria Isabella (Isabel) Patino (1933-1954),
daughter of tin magnate and diplomat Antenor Patino. The
romance was marked by an arranged abduction from her father's
residence in Paris, legal battles and tabloid headlines
(with Goldsmith for example chartering a plane to follow
Isabel to Casablanca. Patino reportedly commented "Nothing
personal in this, Monsieur Goldsmith, but in my family
we do not marry Jews", with a rejoinder from Goldsmith:
True,
Senor Patino, but there have to be exceptions. You see,
in my family, we do not usually marry Red Indians.
Isabel died five months after their 'Gretna Green' marriage
in Scotland; Goldsmith then spent years in legal disputes
with his parents-in-law for custody of his child (delivered
by caesarean section while his wife was in a coma). Goldsmith's
Laboratoires Cassene, launched in 1954, distributed pharmaceuticals
under licence in France but experienced difficulties over
aggressive marketing and was sold for £120,000 in
1957.
In 1959 he turned to the UK by acquiring 28 pharmacies
from Charles Clore. In 1961 he bought a chain of pram
and nursery furniture shops, which he then relaunched
in partnership with Iraqi banker Selim Zilkha as the Mothercare
chain, retailing clothes for mothers and small children.
Goldsmith sold his stake to Zilkha in 1962, repackaged
- critics more acerbically said pirated - a US slimming
product, survived the resultant litigation and increased
his wealth by marketing it across France as Milical.
Famously boasting that "when you marry your mistress
you create a job vacancy" he had begun a relationship
with secretary Ginette Lery in 1957 (a son was born in
1959). They married in 1963, amid a flamboyant affair
with Lady Sarah Crichton-Stuart, followed by an equally
public relationship with Lady Annabel Birley, younger
daughter of the eighth marquess of Londonderry. That resiulted
in two sons and a daughter. Goldsmith divorced Ginette
but continued to maintain a Paris household with her.
He married Annabel in 1978: she remained his London partner,
with Goldsmith establishing a third household in New York
with Laure Boulay de la Meurthe (by whom he had a son
and daughter).
Using loans from Clore's competitor Sir Isaac Wolfson
in 1964 - Goldsmith's contempt of mainstream financiers
was matched by their wariness of his 'unorthodoxy' - Goldsmith
echoed Robert Maxwell through
an aggressive accumulation of 51 bakery and confectionery
businesses, aggregated as Cavenham Foods in 1965. Like
Maxwell he engaged in share raids and asset stripping,
through Cavenham, Banque Occidentale and French holding
company Générale Occidentale (formed in
1968).
In 1971 Cavenham snared the Bovril Company, recouping
most of the cost by unloading its dairies and South American
meat operations. That enabled acquisition of Allied Suppliers,
the UK's fourth largest grocery chain and owner of major
brands such as Lipton tea, in 1972 for £86 million
and a lucrative but increasingly controversial involvement
through Anglo-Continental Investments & Finance in
Slater Walker Securities. In 1973 he acquired US supermarket
chain Grand Union Company (531 locations) for £62
million. He became chair of Slater Walker as part of the
1975 Bank of England rescue package and a director of
the Rothschild family bank in France.
Critic Richard Ingrams commented that
his
financial juggling aroused mistrust. Throughout his
life his companies invested in one another, traded with
one another, borrowed from one another, and were helped
by each other's pension funds. His contempt for financial
orthodoxy was as ostentatious as his crushing of minority
shareholders' interests.
Criticism
by the muckraking Private Eye saw an increasingly
paranoid Goldsmith issue over sixty defamation writs in
1976, underpinned by use of private investigators and
alleged blackmailing to produce false affidavits. He proclaimed
that
You
have heard of the power of the press. Now you will discover
the power of money.
In
1976 he paid Murdoch US$3 million
for 35% of the non-voting shares of the Beaverbrook
newspaper group. He attempted to acquire The
Observer in 1976 and the Daily
Express in 1977. In the latter year he purchased
a major stake in French weekly magazine L'Express
(later acquired by Vivendi and
Socpresse) from Jean-Jacques
Servan-Schreiber and
associates. In 1979 he launched Now! magazine,
at a cost of around £6 million. It survived for
only 19 months.
Goldsmith was knighted in 1976. Settlement of the Private
Eye litigation opportunely depressed the price of
Cavenham shares: Générale Occidentale privatised
the group and Goldsmith moved control of his interests
to Paris, away from inconvenient questions by UK regulators.
In 1978 he paid £133 million for US supermarket
chain Colonial Stores (369 stores), using the cash flow
to buy J. Weingarten Inc with a further 100 supermarkets
in Texas in 1979. In 1982 he gained control of US forestry
and paper group Diamond International for £246 million,
resold after two years for around £700 million.
As a model for Gordon Gekko his 1985 raid on Crown Zellerbach
provided a further £400 million. A 1986 bid for
Goodyear Tire & Rubber (oil, aerospace, tyres) was
more controversial and generated a mere £90 million
profit.
Goldsmith liquidated many of his holdings in public companies
prior to the 1987 Crash (reportedly accruing around £2.8
billion from sales that included an MBO of his US supermarket
interests) and moved to an estate in Cuixmala, Mexico.
Those sales were accompanied by sale of 34% of Générale
Occidentale to recently privatised French engineering
conglomerate Compagnie Générale d'Electricite,
which became Alcatel. A 1989 bid with Kerry Packer
and Jacob Rothschild for tobacco and financial services
conglomerate BAT was unsuccessful and a £1.1 billion
stake in US mining giant Newmont did not result in a change
of control; Goldsmith exited from Newmont in 1993.
In that year he established the right-wing European Foundation
and L'Europe des Nations, centred on criticism of the
Maastricht treaty but dismissed as merely a vehicle for
his ego. He had more success with creation of the L'Autre
Europe party, being elected by French voters to the European
Parliament in 1994. During the following year Goldsmith
repacked the European Foundation as the UK Referendum
Party. In 1995 Générale Occidentale acquired
49% of the shares in Euronews, unloaded to UK news organization
ITN after Goldsmith's death.
In 1996 Goldsmith promised to spend £20 million
on parliamentary candidatures at the general election,
in return being dismissed by one Tory MP as "bronzed,
rich, mad".
Voters apparently agreed, or considered that Goldsmith
was merely irrelevant. The Referendum Party gained a mere
3% of votes at the May 1997 general election and Goldsmith
failed to secure the minimum number of votes for return
of his deposit as a candidate for Putney. He died two
months later in Spain.
studies
Studies of Goldsmith include Geoffrey Wansell's indulgent
Tycoon (New York: Atheneum 1987), Ivan Fallon's
Billionaire: The Life and Times of Sir James Goldsmith
(New York: Little Brown 1992) and Goldenballs: The
Incredible Story of the Long and Complex Legal Battle
between Sir James Goldsmith and Private Eye (Petersfield:
Harriman House 1979) by Private Eye editor Richard
Ingrams. He makes an appearance in The Gamblers: John
Aspinall, James Goldsmith and the murder of Lord Lucan
(London: Century 2005) by John Pearson and in Gyles Brandreth's
Breaking The Code (1999). Wife Annabel Goldsmith
provided a memoir in Annabel: An Unconventional Life
(London: Weidenfeld & Nicolson 2004).
For Slater Walker see Charles Raw's A Financial Phenomenon:
An Investigation of the Rise and Fall of the Slater Walker
Empire (London: Deutsch 1977) and Jim Slater's apologia
Return to Go: My Autobiography (London: Weidenfeld
and Nicolson 1977).
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