What You See Is What You Get: My Autobiography (27 page)

Ann occasionally called home from Japan to find out how the children were and to check that everything was okay. Johnnie and Rita had moved into our house, which seemed the sensible thing to do, as the kids could carry on with their usual routine. I would listen in on the handset in the bathroom when Ann spoke to her mum.

On one occasion, Ann noticed a distinct despondence in Rita's voice. When she got off the phone, she said to me, 'There's something wrong at home. I can tell from my mum's voice.' To be honest, I hadn't picked it up, but Ann is very perceptive. We discussed whether we should call again, but decided to leave it, as we'd be home in a few days.

We flew back to very bad news. While we were away, Rita had been diagnosed with bowel cancer. The whole family was very shocked and rallied round with whatever comfort they could give. She was only forty-six years old. Everyone's hopes lay with Mr Noone, a specialist in this area. There was a real sense of closeness in the Simons family, a strong bond between Ann, her brother Mark and their parents. As the months passed, the only topic on the agenda was the welfare of Rita, with constant meetings and discussions about her progress each time she visited Mr Noone.

Rita embarked on what was a very primitive form of chemotherapy, but eventually it was decided that she would undergo surgery to have her bowel removed. This would mean she'd have to use a colostomy bag for the rest of her life. Nasty as it sounded, this was a ray of hope for the family - if it meant she
survived,
then that was how it would have to be. We'd just be thankful she was alive.

When people go through this terrible ordeal, there are ups and downs. For a while there was light at the end of the tunnel and it seemed that perhaps the combination of the chemotherapy and the operation had got rid of the cancer. But then things got worse in the Simons household. Izzy, now known as Ian, was complaining of problems with his waterworks, a common ailment in men of his age. It was troubling him to such an extent that this brave old
chap decided he would have surgery. The doctors told him that the operation was pretty routine, but added the caveat that anaesthesia in someone of his age was not without its risks.

Nevertheless, as Izzy's surgery wasn't life-threatening, the family's primary concern was of course Rita. Even Izzy himself was only concerned for his daughter. He was recalling how his own wife, Annie, had also died early and I guess he wondered whether perhaps Rita's condition was hereditary.

We all wished him well as he went off to hospital. As he left, he said, 'I know I'm eighty-two years old, but it's the
quality
of life that matters.'

He underwent surgery and woke up after the anaesthetic to be greeted by Rita. His first words were, 'Not bad for an old boy of eighty-two, eh?' But that night, sadly, he died of a heart attack. It was a real blow for everyone. It seems the anaesthetic took its toll and his heart conked out.

As is customary in the Jewish religion, the family mourned the passing of Izzy with an event known as a shiva. This takes place at the house of one of the bereaved close relatives. The close relatives sit on low chairs while other family members and well-wishers visit the home and offer their condolences. On these occasions, one will often hear people reminiscing over stories and fond memories of the deceased. The process of sitting shiva continues for several days. Obviously, because of Rita's condition, it wasn't appropriate to have the shiva at her house, so it was held at the home of Izzy's son, Harry.

Izzy's family was happy that he'd had a long life, but agreed, in view of Rita's condition, that his departure was perhaps a blessing in one way, because Rita would no longer have to worry about the welfare of her father.

There had often been minor altercations between Johnnie and Rita's brothers, Harry and Jack, over why the onus of looking after Izzy should fall upon Rita. Considering that they had homes too, they could have taken Izzy from time to time to give Rita a rest. A week's respite here and there would have been most welcome, particularly when Rita became ill. But there were always excuses and reasons why they couldn't do it.

You have to take your hat off to Johnnie. To offer your father-in-law a home and treat him the way he did over the years was no mean feat. I guess it goes to show how much family life meant to Johnnie. All in all, he gave Izzy a great home and made him part of the family, something that perhaps wasn't fully appreciated by Izzy's sons.

*

Everyone makes stupid mistakes from time to time, and I'm about to tell you about one of mine. My friend Malcolm had taken a shop a few doors away
from my factory in Ridley Road. By now he was working for himself, carrying out TV repairs, and he'd teamed up with another chap, Dennis Hart, whom he had met when they both worked in a TV shop in Walthamstow He had told Dennis about the TV business he used to have with me, and they tried to resurrect it together.

Dennis was a rather strange-looking fellow with a very odd nature. When I heard his dopey way of talking and listened to his ideas and methods, I could tell he wasn't the brightest star in the sky. It also made me doubt his honesty and integrity, which is possibly unfair, as I didn't really know him.

Dennis wore a white coat to make out he knew what he was talking about. In fact, he knew nothing as far as electronics were concerned. One of his scams was to go to people's homes with a device that looked like a pen with a light on it. At one end of the pen was a metal spike and at the other, a wire leading to a crocodile clip. If you touched the spike and the crocodile clip together, the light would come on. He used this device to mesmerise customers. Under the guise of diagnosing what was wrong with their TV sets, he'd prod around with his pen and on would come the light. He'd tell them that their TV was in fatal trouble and needed to be taken away for major repairs, which he'd charge over the odds for. I have to emphasise that Malcolm never had this dishonest streak in him - he had far more integrity.

Dennis was very curious about my business. I let him see my factory and he looked enviously at the production lines, wondering how someone of my age could have built such a business. I knew he was thinking that he and Malcolm could do something similar.

I told them that the products I sold - plinths and covers, amplifiers and tuners - were all advertised in hi-fi magazines, so the simple formula was this: advertise a list of products at slightly lower prices than everyone else's and - bingo - you'll receive orders through the post.

Dennis didn't need telling twice. I suggested that if they wanted to start a business, they should call it something like Audio Supplies, a name that just rolled off my tongue in a moment of inspiration. Sure enough, that's exactly what they did. Dennis and Malcolm took full-page adverts in the hi-fi magazines, listing an array of products, none of which they stocked. Within days of their advert appearing, loads of envelopes were arriving through the door of their tiny little shop in Dalston Lane. Suddenly, thousands of pounds were coming through their letterbox. Dennis was elated, completely blinded by this massive turnover, but he hadn't applied any thought as to where he was going to obtain the items he was advertising. All he'd done was unilaterally list products such as Leak amplifiers and Wharfedale speakers at a few quid lower
than everybody else in the magazine. And sure enough, the bargain-hunters sent in their orders. I explained to him that he needed to establish a method of supply and told him about a company called Dallas, in central London, who wholesaled most of the big hi-fi brands.

So much money was coming in that they moved to a much larger shop with storage capabilities in Stamford Hill. It was relatively simple to obtain supplies by buying goods from Dallas or contacting the manufacturers directly. Dennis and Malcolm started to build up relationships with suppliers, as they were able to pay cash and take advantage of the 2.5 per cent cash-settlement discount. These relationships flourished to such an extent that the suppliers were pleased to extend them credit terms.

The cash flow was about PS15,000 per week - an amazing figure in 1976 - and Malcolm and Dennis started to take large salaries from the company. I'd never seen a person transform as quickly as Dennis did. The money had gone straight to his head. He became a real bigshot. But he was falling for the oldest trick in the book - massive cash flow. He'd paid no attention whatsoever to profit or costs.

The more orders poured in, the bigger their adverts became and the more outrageous their offers were. I have to say that even I was dazzled by this success at the time, especially since I'd given them the idea in the first place. Bigshot Dennis started attending the hi-fi exhibitions - I'd see him suited and booted in immaculate clothing, striding down the centre aisle, stopping at all the stands and slinging his weight around.

My
mistake, based on the other man's grass, was to suggest to Ashley Morris, the husband of Ann's friend Brenda, that perhaps he and I should start up one of these discount warehouses ourselves. Ashley worked in the fashion industry. He was a tall, slim fellow with a beard and long, lank hair who spoke with a sarcastic air of superiority, belittling those who challenged his so-called wisdom. He would often take the piss out of people's mannerisms, but one felt, on the face of it, that he was quite clever. He was always alluding to starting his own business.

I explained the business plan to him and told him how I'd helped Malcolm and Dennis Hart set up Audio Supplies. We visited their shop in Stamford Hill on a Saturday. Seeing the hustle and bustle was certainly an eye-opener. Such was the clamour, you'd have thought they were giving away ten-pound notes for a fiver. There were people turning up from all over the country to pick up their goods in person.

Ashley tried to exhibit the air of a shrewd entrepreneur. With a kind of reluctant acceptance, he said that he'd give it a go and put a few thousand
pounds into the venture if I matched him fifty-fifty. This was really the first sign that perhaps he wasn't quite what he tried to portray. However, as I had some stupid death wish to do this, I agreed to the partnership and came up with a name for the business - Global Audio.

We needed some premises and as it turned out, Freddie Ezekiel, from my St John's Street days, had a lock-up shop with a basement in Pentonville Road which he was anxious to vacate. He'd taken on the role of sole importer for Europhon radio sets from Italy and was expanding to larger premises in King's Cross. This Pentonville Road shop looked just right for our new enterprise and within weeks Global was operating and there was a large cash flow coming in. The shop was terrifically busy on a Saturday.

This upset Ann, who was doing a great job looking after the children Monday to Friday in my absence. She was very annoyed that I would now be out on Saturdays too, helping to grow this discount warehouse business.

Ashley made Dennis Hart's bigshot attitude pale into insignificance. The massive cash flow went to his head big time. As I was busy running Amstrad five days a week, the deal was that he would totally run and control Global Audio. Naively, I believed that I would be sharing in the profits. Every so often, Ashley would declare a dividend and give me a cheque for PS2,000, what he called 'personal money'.

After Global had been operating for about nine months, Ashley decided to take an exotic holiday somewhere. I took the helm at the shop on the Saturday. Out of interest, I started to look through some of the invoices coming in from suppliers. I became a lot more interested when I looked at the cost price of the equipment compared to what we were selling it for. It didn't take me long to see that items such as giant Celestion speakers, for which we paid about PS91 plus VAT, were being sold for PS88 plus VAT. So for every pair we sold, we were losing money! That wasn't all; when I delved deeper through the invoices, I saw that we were selling many other products below cost.

This was a bombshell to me. I had trusted Ashley and assumed that common sense would prevail, that he would be applying the simplest principle of business - buying something at a certain price and selling it at a profit. My earlier suspicions that he wasn't as clever as he made out were really coming home to me.

I spent most of that Saturday ploughing through the paperwork. When Ashley arrived back from his holiday, I called a meeting with him and told him what I'd discovered. He was very abrupt, angry and dismissive. He told me he had special arrangements with the suppliers for quantity discounts. He said that he got retrospective kick-backs every three months if he reached a
certain level of business and that, eventually, everything we sold would be making a profit. While this practice might have been possible in the motor car trade - where targets were set by the manufacturers - I'd never come across it in the electrical game, and I didn't believe it.

Although there was no intention to do anything deliberately fraudulent, some might argue the business was effectively a type of mini electrical 'Ponzi scheme'. The term isn't really used with reference to electronic retailing, but the principle is the same. To simplify, imagine you have a turnover of PS30,000 a week and growing. You obtain up to six weeks' credit from your suppliers, such that, at any time, you can owe them PS150,000. So with losses of PS2,000-3,000 a week, it would take a very long time to get to the point where you didn't have enough cash flow to pay your bills, particularly when the market was expanding.

To make matters worse for me, the industry had become aware that I was something to do with Global Audio. I had a rather heated exchange with Derek Smith of G. W. Smith & Co., one of the largest retailers in Edgware Road and Tottenham Court Road. He told me point-blank that he was not going to buy any more Amstrad equipment from me while I was effectively a competitor. Clearly Audio Supplies and Global Audio were disturbing the market by undercutting the likes of G. W. Smith and Laskys, effectively costing them money.