Felix Dennis...
On why Dennis chose B&T
On the deal itself
On whether he looked at B&T before
On day-to-day involvement
On environmental issues
On long term goals
On being a publisher in print
On growth
On the management team
On print versus digital
I guess we should start with the big question: why did you decide to get involved with Butler and Tanner?
I've been collecting books all of my life and I own tens of thousands of them. I'd been seeing 'printed by Butler and Tanner, Frome and London' since I was a boy and so, quite obviously, there was already quite a degree of affection for the company because I'm a book collector. And it did seem to me to be a very sad state of affairs that Britain's last remaining high-end colour book printer should vanish.
Of course, no one cares about machinery, they're just bits of metal, but once that machinery had gone, the talent base in Frome would have been lost forever and it did seem to me that a town, with printing in its blood, in its DNA, which has been printing books for 157 years – it seemed crazy that that talent should be dissipated.
But we didn't do it for sentiment. No one does business for sentiment if they're sensible. I do think they have a chance, I honestly do. They have a good management team in place, they have got a superb workforce and I think everybody that could have helped, has helped.
What distressed us the most was that we were determined only to create a sustainable printing company. No one can know the future but we knew that if we didn't start off with the goal of sustainability, it would get itself into this trouble again. That became the tipping point for us, when we knew we were going to try this, to attempt this.
People must have thought I had completely taken leave of my senses when buying Butler and Tanner, I would imagine so anyway. Certainly I had a few amusing e-mails from those in the magazine game, and maybe I am wrong. But if Butler and Tanner ever fails again, it will not be for want of trying I can tell you that. I am very serious about it and I am determined to give them the very best chance of third time lucky.
It's a different beast now isn't it? After all, a lot of its problems were historical. That gives us a chance.
I was a very small client, even though my poetry sells in substantial amounts, for poetry books they are still very low runs. Typically we print 10,000 copies and the reprints are anything between 2-5,000. Even so, they had done a superb job on Island of Dream so I think both the heritage of the name, the enthusiasm of those people attempting to save or to rebirth the company were the main factors, and the fact of course that I did know who they were. Not only did I know them from a distance having seen books printed with their name on it for decades, but I knew because I was a customer.
That's good to hear. How did the deal come about?
I heard about their troubles when we called up to print Homeless in My Heart. They had printed a poetry book a year before for us, Island of Dreams, and they did a fabulous job, a beautiful job and I wanted them to do my new one.
Fortunately, the person who looks after my book production, Caroline, had their sales director's mobile number and got through to him. He said: "We're all locked out of the factory, we can't print any books for you." We thought, what a pain! When she told me this, I went up on the internet, including onto PrintWeek, to familiarise myself with what was happening there, and then Caroline began receiving more calls from the managers trying to effect an management buyout and I agreed to talk with them. It was a gradual process, bit like wooing a young girl really, but they got us on the hook in the end.
There's a lot of controversy surrounding companies being bought out of administration in the print industry. Was this the only route open to you?
If you're asking me if I would I have bought Butler and Tanner before it went into the hands of the receivers, the answer is decidedly no. For a number of reasons, not least the issues with the pension fund, which, in previous times, had become so important to the company, it was the main focus of the company's life and indeed the pension fund owned the building in which they operated.
I think there were issues of investment and management, there were issues of redundancy payments, and the whole business was so complex, it had become vitriolic with everyone blaming everybody else that it wouldn't have been a business that anyone would have invested in as a going concern.
Did you look at the company last summer or earlier this year then, before it went into administration for the first time and second time?
No, I did not. I'm re-engineering the past. Even if I had looked, I would certainly not have gone there. In a sense, the worst had to happen for the chance of a new start. I don't want to get involved with who is to blame here. Whoever runs a company is always to blame but often people that run companies inherit problems that turn out to be insurmountable, so I don't want to spend time on apportioning blame.
What I'm far more interested in is how we got to where we are now and where we are going now. The first thing is we were assisted every step of the way. They were fearfully complex and difficult negotiations but there was a thread of goodwill running through them from the very first meeting. The fact that the management buyout [attempted by Sarney before Dennis's involvement] had not succeeded, in retrospect, and only in retrospect, at the time a crushing blow, was probably a good thing because I'm not sure the management could have raised the money that really is necessary to reinvest in Butler, Tanner & Dennis. Especially in this financial climate, although they couldn't have known that then.
So moving on, what's your involvement with Butler, Tanner and Dennis on a day-to-day level?
I don't run any of my companies. I ceased being a managing director in April 1983 and remember walking out of my office at the time, which was then in Rathborne Place, and thinking 'that was an interesting few years'. But I haven't run a company since and I don't run Butler, Tanner & Dennis – that is run by Kevin Sarney and his colleagues.
But clearly you've already spent a lot of money on the company, so surely you have some involvement?
Yes we've spent money already, and I laugh hoarsely when I see 'Felix Dennis bought the company for half a million'. My dear that's what it costs to get into the nightclub, it's buying the drinks that really knocks the stuffing out of you. It has been quite expensive to date but we're a private company so I don't want to say exactly how much, but let's just say it's a substantial amount.
Even at my very first board meeting, the management started to do what all printers do: they started talking about new machinery. To some degree, you have to invest in new machinery as you're always playing catch-up with the 21st century and yes, I agree, and the binding line's done. When we shall purchase our next piece of machinery, I don't know, but I know they would like to do it next week and I don't think I will be agreeing to that for a few months. We need to get a few months of trading under our belts first and we need to be satisfying our customers, really satisfying our customers, which is the name of the game in the end.
I think that is regrettably part of owning a printing business. We are [print] novices you know [Dennis and his financial director Ian Leggett]. Fortunately the management team at Butler, Tanner & Dennis are not novices at all and neither are some of the grey wise heads there either. We're very good with money, with cost control. We're good at revisiting budgets, re-forecasting constantly, keeping a very, very close eye on expenditure and income but we rely entirely on the Butler, Tanner & Dennis management team for the running of the business and I will not be interfering with it at all, I don't do it with any of the other companies I own and won't be interfering with it there either.
Will you try and instil some of your environmental views in B,T&D? (One of Dennis's personal projects is to create massive native forest, The Forest of Dennis, in Warwickshire)
I am thinking of linking the planting of trees that I am doing with certain books. If we could attract more customers by promising them for every 10 books we print, we plant a tree and so on, and you could print that in the book, I think eventually we will come to that. I am certainly not against that at all. It's an idea that needs to be worked out properly and needs to be created as a programme to offer publishers a proper programme with guarantees and so forth.
But yes, I do think we can do that, but I am always very careful to explain to people that don't know anything about trees, the idiocy of shouting and screaming about the waste by printing of ink on paper. I do try to explain to them if you went to Canada or Finland, if you see the way the trees are planted, these trees have been printed only to create paper, it's a crop. They have 12, 15, 20-year felling cycles, then they are replanted. That's why they're some of the best-managed forests in the world and the idea of course, if they weren't going to be used for paper, they wouldn't have been planted and they wouldn't be sitting there, millions and millions and millions of them with their woolly little heads for 15 years.
In fact, if we want to see more trees planted, we need to read more books, newspapers and magazines, but people get confused – they think we're chopping down big old oak trees to make wood pulp and it's difficult sometimes to explain to people that we don't chop down broadleaf trees to make paper.
And so, I don't plant trees because there is a residue of guilt or something, this is a crop and it's a renewable resource and it should be. I do it because I just love planting trees and we have a very, very low percentage of high tree coverage in Britain. It's about 25% for both France and Germany and Italy, native high tree coverage. But for Britain, or should I say England, native high tree cover is only at around 4%. It's pretty feeble isn't it?
Getting back to Butler, Tanner & Dennis, what are you long term goals for the company?
Do I think I will own Butler, Tanner & Dennis forever? I haven't got a clue. I don't know what the future will bring, I truly don't,
I'll be delighted if the company can get back on its feet and start making a profit. One promise I have made to the management and to the workforce is that there will be no repetition of secrecy and lack of transparency. Everyone that works at Butler, Tanner & Dennis, whether they want to know or not, are going to know how we're doing. Now, I'm not trying to burden them, the management is supposed to carry that load, but on the other hand, I would rather if they [the staff] were slightly burdened rather than kept in the dark. I think they will be troughs as well as some peaks and it's important that everyone knows where we stand.
When I did my poetry reading at Frome, I did say to the audience 'I can't promise you that this company will thrive and prosper, I can't do that. All I can promise you is that if you do your part, I'll do mine.' But we are up against the most appalling financial circumstances and there are a lot of other companies in the world that will print books. Obviously, from an environmental point of view, we think that British publishers should print all their books with Butler, Tanner & Dennis to avoid these millions of book miles on container ships, and we are hoping to persuade many authors, many famous authors, to ask their publishers to print books aimed for the UK and Europe at Butler, Tanner & Dennis, rather than Asia or even far flung corners of Europe. I do think that's an idea whose time has come and we're certainly going to be playing that card. Saying that, as far as the environment is concerned, all of us are hypocrites. If we got an enormous order from a West Coast publisher in America, I can absolutely assure you we would fulfil that order and shove those books onto container ships. Britain and Europe are big markets for books and I do think that we have that going in our favour.
Coming from a publishing background, you clearly have an understanding of the print industry and the challenges it faces?
We are literally like young virgins turning up at a New York night club. I know nothing about the print industry except that I've been negotiating with them on the other side all my life. I've spent many years of my early working life very happily going round printers all over Britain. Actually in those days, I was a very long haired young man with loon pants and snakeskin boots and there I was climbing up these ladders on to the very first coldset web-offset machines, then on the first heatset, actually pouring ink into the troughs mixing inks – two colours one at each end of the trough – things you would never be allowed to do today.
To that extent I've always loved printing and I'm a typesetting fan and I adore lettering. The very first book, the only book I still have from my childhood, is the alphabet from Gaudi. The great typemaster, one of the great typemasters from the last century and I literally got given that book for my birthday. It's not often that 11-year-olds want to get a book about type and I still have it upstairs in my library. And so, in a sense, printing and typesetting are in my blood. I was a designer for many years on magazines. So for me, in a sense, that was very dangerous.
It is very easy to be beguiled by machinery and by craft but we have convinced ourselves there is a future for this company, although I think it will be very difficult and this recent collapse in financial confidence and this new recession we're moving into hasn't helped.
However, fortune favours the brave and from Butler, Tanner & Dennis' point of view, the pound dropping like a stone against the dollar is like Manna from heaven. I think if you went to every single one of the workforce at the moment asking 'How do you feel about the pound being at a six-year low against the dollar?', they are going to go 'Great, absolutely yeah! And if it would drop against the bloody Euro even more that would be even better'.
Not all my other companies feel this way, obviously.
Have you identified any areas of potential growth for the company?
It's really quite a bit daunting for someone like myself who doesn't understand a lot about that and, of course, [B,T&D] is very much involved with the business of producing annual brochures and fancy reports and other things for top companies in Britain. It's an immensely complex job. It's beautiful. And I didn't realise that my beautiful Rolls Royce box I get whenever I buy a new Rolls Royce – well it's not like buying a car, more like a bloody library. I didn't realise [B,T&D] had done these brochures. That's a growing part of the business and a very important part. But [B,T&D] has got to prove itself, because once a company has been through the mill as this has, you can't expect all your customers and all your suppliers to welcome you back with completely open arms.
[B,T&D] is doing ok. You could have heard a huge cheer when Lewis Hamilton won the world championship and I got called very excitedly by one of the managers. I said "Of course, I'm pleased the young man has won but who gives a? But… why are you calling me?" He replied: "Because we've got this huge print run on a book!" They have this book all ready and waiting. So that was lovely. I'd very much like the company to get involved with the forthcoming Olympics.
There will be a tremendous amount of printing for that project and I think it's so important that when you look at the amount of British taxpayer's money is being spent, quite extraordinary expenditures, well surely the bloody printing contract should go to British printers. I'm not very protectionist to be honest with you, I'm a free trade man born and bred but I'm hoping we will be able to get involved with that. There will be significant contracts to come out of that, very significant indeed.
Do you have any regrets about backing the management to buy the company?
No question at all. I think that we started with 80 people and that was our biggest regret was that we could only employ 80. I think we're up to 90 now, but we've got to be careful not to grow too quickly if we're to remain sustainable. It is our intention, of course, and our wish to bring the company back to a position that there will be one or even two hundred people working back at B,T&D but we most go very slowly and it must be desperately disappointing to the people that we can't reemploy.
What has been the general response to the new company?
There was residue of goodwill, which I hadn't quite realised would be there, which I should have guessed because it is the same as my own and that is Butler and Tanner's relationship with its customers, the book publishers and companies for whom it prints its annual reports and fancy brochures. I was frankly astonished how many of them phoned up to say they would do everything they could to support the company and to be truthful most of them have. And that is very, very gratifying indeed. Obviously, we did not expect the suppliers to be as magnanimous as many of these suppliers have now been burnt twice. I know what that is like and I know we will have to work hard for a very long time to prove ourselves to our suppliers, or at least Kevin and his team will have to work hard to prove themselves to the suppliers. But at least the company has a chance.
But there was a thread of goodwill. Not only from the managers involved in the management buyout, but also from previous managers who were retired but have a great deal of institutional knowledge of the company, from Unite the union and their representatives both in the company and outside the company, and from the landlord who, to be fair, has done everything within his power to make it possible for the company to survive and then thrive, or to be reborn. And from the local councils and authorities, even the MPs and even the opponents of the MPs.
But most of all, from the existing management and workforce, who made it abundantly clear that they were prepared to work until they dropped to try to assist in this rebirth. When Ian Leggett, my financial director, and I realised that this residue of goodwill existed, even though the negotiations were fraught and very difficult, I think it was at that point that there was actually a chance of kicking this off again.
One final question. Clearly it's difficult to predict the future for just one company, but based on your knowledge of e-zines for example (Dennis publishing launched Monkey, one of the first true online only rich-content e-zines), do you think print will be around for another 100 years?
Do I think ink on paper will survive? Yes, I think in certain categories for certain audiences for certain products, I think ink on paper has a very bright future but others, I think the content will migrate to the electronic sea.
But, I'll give you two very swift examples in the magazine field. In books, I think it's quite obvious that people will continue to read books. Many people love books, they love the portability of them, the tactile feel of them, the fact they don't need a battery to replace them. I think books stand a very good chance of continuing for a very considerable period of time.
With magazines, I think if you take two completely different magazine, Vogue and The Week, I think both of those will survive because one, with ladies looking at frocks and accessories, nothing can beat looking at a fantastic photograph or a double page spread printed in Vogue, it's unbeatable. The web can't touch it. For The Week, it's so convenient, roaming round the tube, on a plane. It so suits our readership to get through it, it's a very short magazine, only 35 editorial pages every week. I think that will survive. Do I think many other types of magazines will survive? I'm not so certain. I think that they will migrate to the web.
