David Gold on succession planning at Ann Summers [Video]
David Gold talks about the future of his businesses and the importance of succession planning
In this video for Startups, Ann Summers owner David Gold talks about the vital importance of succession planning in a family business.
David Gold, along with brother Ralph, purchased the highly successful erotic retail chain in 1971 and have been in control ever since, with David the sole owner of the business following his brother’s retirement. And whilst Gold doesn’t have any immediate plans to follow his brother into retirement, he admits that “succession planning is now an important part of what I’m trying to do for the business”.
Indeed, the foundations are already in place for a smooth transition to the next Gold generation, with David’s daughters Jacqueline and Vanessa already working as CEO and managing director of Ann Summers respectively. “My daughters are extremely capable of running the mighty Ann Summers,” says Gold. “And it is becoming a mighty business, in the sense that it’s a private company with £150m turnover.”
Gold believes that splitting responsibility between family members of the next generation and giving them the experience of running a business before the handover occurs is “common sense”, due to the high failure rate of second-generation family businesses. Just 29% of second-generation family run businesses survive the handover, a figure Gold calls a “damning indictment”.
The serial entrepreneur believes this high failure rate is due to business owners leaving their companies in the hands of multiple children or dependents – sometimes as many as 10. Gold believes this makes failure almost inevitable as the second generation squabble over control whilst the business slides into steep decline. “It could even happen with Ann Summers – can four successors work together? I have my doubts,” he says. “Just having doubts is sufficient reason to split things up and leave each of the families in control of their own destiny.”