Deborah Meaden: Weststar Holidays and Dragons’ Den
The leisure tycoon on good timing, self-sufficiency and why she’s a reluctant celebrity
The rest of the Dragons seem to spend their whole lives defending me,” says Deborah Meaden when asked if she's the victim of harsh editing. The holiday park millionairess and solitary female on BBC's Dragons' Den has no qualms about the way she's represented on the show, but admits it probably only portrays her harsher side.
“I recognise the person I see in the Den, despite it not being the full rounded me,” she says. “But I'm there to decide what is and isn't a good investment, not to win a Miss Congeniality contest.”
Is there a trace of misogyny attached to her austere reputation? “I do sometimes think the same words coming out of a woman's mouth can sound harsher, but I try to avoid the gender issue,” she replies. “I spend as little time as possible wondering what people think of me.”
Meaden sold her final stake in Weststar Holidays, her “career business”, in 2007 after two decades at the helm, resulting in a final price tag of £83m. Her time is now split between her investments, both in and out of the Den, and striving towards an ambition she shares with her husband: to become self-sufficient. The couple own a farm in Somerset and haven't bought meat or veg for the best part of a year.
The idea of self-sufficient living is one that Meaden's mirrored in business, despite making her name running a company her parents started. Before taking over as operations manager in 1988, she had enjoyed a varied and somewhat unexpected career far removed from the security of the family firm.
Meaden grew up in a household that “constantly talked about opportunity” and from an early age, the idea of working for someone else was an alien concept. After graduating from business school, a short stint as a sales room model in a fashion showroom reinforced the notion that she simply was not made to take orders.
But as with everything else she recalls from her past, regret doesn't get a look in, merely an acceptance that it led to where she is now. Meaden applied for the job to be with a boyfriend in London, despite knowing she didn't fit the bill, but managed to talk the employer round even though she was five inches too short.
Hating it from the start, she stuck it out for a few months, but when some friends asked her to come and stay with them in Italy, she jumped at the chance. It was there, at the age of 19, she embarked on her entrepreneurial career. With no start-up capital to invest, Meaden made the most of her surroundings.
Impressed by the range of Italian ceramics and glassware, she decided to set up an import agency. “I walked into the manufacturers' offices and asked if I could be their distribution agent in the UK,” she recalls. “Some laughed, but four of them didn't.”
With these clients on her books, Meaden secured deals with some of the biggest names in retail, including Harrods and Harvey Nichols, but after the first load of stock was delivered to the UK, the interest from the Italian manufacturers dried up.
With relationships with some of the UK's best-known stores established, the Italian companies started selling to them directly, cutting Meaden out of the equation.
“I had grounds to take legal action, but I decided it wasn't the best use of my time,” she says. “I hadn't really lost any money and I realised the sensible thing was to shut the business down. I've always been practical in that way.”
Meaden returned to the UK and set up one of the first Stefanel franchises with a friend. The fashion brand provided her first real education in the process of running a physical business, and gave her valuable insight into the nature of seasonal trade patterns.
The venture was a financial success, but the honeymoon period ended quickly. The franchise model was ultimately unsatisfying, and wanting to take on something she could feel more in control of, she sold her share to her business partner for £10,000.
“That was the first time I actually had any money,” she recalls. With one failure and one success story under her belt, Meaden turned her hand to the industry that would eventually allow her to make her mark – the holiday park business.
She ran a bingo concession at Butlins – an “extremely customer-facing business”, which taught her to recognise exactly what the punter wants and how to give it to them. “I did it all,” she says. “I collected the cash, I cleaned the machine and, yes, I called the bingo numbers. I underestimated it at the beginning, but that job taught me more about business than I've learned in the rest of my life.”
By this point Meaden had remained outside the family business. Although she had spent a few months working with the family after college, her fierce independent streak had won out, and it wasn't until she'd gained her own experience that she felt ready to return.
Today, she credits much of the business' success to that decision. “When I came back, the relationship was totally different,” she explains. “I had lots of options, so it was a negotiation between me and my parents. You need that gap. If you go straight from education into a family business, your parents see you as their child and won't judge you on your business skills.”
Meaden took the family business from an amusement arcade and a few retail and food outlets to a multi-million pound holiday park empire. She became concerned early on with the concession model her parents had fostered. As with the Stefanel franchise, her strong need for personal ownership kicked in.
It wasn't enough that the concession outlets were profitable. Meaden needed complete control, and the purchase of the company's first holiday park provided just that. Over the next few years, the concessions were phased out, and the Weststar brand emerged, quickly taking on more sites.
A management buy-out in 1999 saw Meaden fully take over from her parents, and with the majority shareholding in her name, she had long-term plans for the business. But as ever, her head ruled her heart, and when buyers started to sniff around, she took notice.
A deal to sell the company was all but complete until the buyers tried to lower the price at the 11th hour. True to form, the Dragon-in-waiting was having none of it.
“Whatever I do, I know what my bottom line is and I'd already warned them that if they tried to reduce the price by a single pound I was out,” she says. “They misread me. They thought I was so committed to the deal that I'd still go through with it.” It's a popular negotiation technique, according to Meaden. A vendor becomes so financially and emotionally invested in a sale that they'll often agree to a lower price at the last minute. When her buyers tried it on, Meaden told them where to go.
With one abandoned sale behind her, Meaden invited other buyers to bid for the company. “The first time, the buyers had wooed me and were in control of the process,” she admits, “but the second time round I ran the show.”
There were three close bids, but a deal worth £33m was eventually struck with Phoenix Equity Partners. Meaden retained a 23% stake until the business was finally sold on to Alchemy Partners in 2007 for £83m.
“After the Phoenix deal, I still felt there was unfinished business at Weststar. I wanted to release some cash, but I knew I wasn't exiting at the top of the market. But the plan with Phoenix was always to sell in three to five years,” she explains. “We understood what was going on in the industry. There were some racy deals happening with holiday parks, and we saw our chance.”
Meaden and Phoenix were right, and their timing was impeccable. No sooner had the deal been finalised, than the first sign of the credit crunch kicked in and the banks began to slide. Meaden says if they'd waited even two weeks, millions would have been wiped off the value.
While the Weststar deal escaped the fallout of the financial crisis, Meaden has since seen one of her Dragons' Den investments go to the wall. The haulage firm JPM Eco Logistics, that she and Theo Paphitis invested £100,000 in, went into administration earlier this year.
“I'm competitive and hate losing, so of course it matters, but that's part of investing. When you work in the high-risk environment that we do, to be honest, one failure out of 10 is a pretty incredible ratio. If I can hold on to that, I'll be doing amazingly well.”
Today, Meaden has very little hands-on involvement in any of her investments. She views herself more as a strategist, and while she's “always at the end of a phone”, she expects the management teams to get on with it. As in the Den, Meaden has little time for business owners who don't know their companies inside out.
That's not to say she doesn't recognise the importance of an investor's personal influence. Meaden has invested with all of her fellow Dragons at some point during her time on the show, but the moment she became a “true dragon”, according to her fellow panellists, was when she threatened to withdraw her offer to invest in Alpine Cleaning if all five took a slice. Insisting that too many Dragons was a recipe for disaster, she eventually partnered with Paphitis.
The thought of trying to get the five of us agreeing on the right strategy to move a business forward is truly frightening,” she says. “You're crazy if you want all the Dragons involved in your business.”
Now a staple ingredient of the Dragons' Den panel since taking over from Rachel Elnaugh in the third series, it's hard to believe Meaden almost turned the opportunity down. But she insists she was initially extremely reticent about the whole idea.
“I'd watched the show and thought it was a great programme, but I'm a very private person with a pretty nice life. I didn't want that changed,” she explains. The turning point came after a screen test with Duncan Bannatyne and Richard Farleigh.
“It was a challenge, and I enjoyed that,” she says. “I'm so competitive that by that point I knew I would have been really disappointed if I didn't make it.” Her competitive streak may have overruled her desire for a life out of the limelight, but Meaden still likes to describe herself as “a businessperson who happens to appear on television”.
Surely after four series of the show, however, even she must accept that she can't resist the celebrity label entirely. Perhaps her recent appearance on talent show Let's Dance in aid of Comic Relief is an admission of that. Or maybe it's just that fiery competitive streak rearing its head once more.
Meaden timed the sale of her business perfectly, signing just days before financial cracks started to appear in the economy. She gives us her take on the credit crisis:
“It's easy for me to sit in my ivory tower and say we deserved it. I haven't been personally affected, but I recognise there's a human story behind it all and it's unpleasant. But the truth is, we've known for some time there had to be a correction to this unprecedented boom. Everyone I spoke to kept saying it was unsustainable. So we can't turn around and be surprised when it proves to be that way.
“If there's a silver lining, it will be that we'll re-evaluate our behaviour. Some of it has been madness – a false economy. But I'm still very confident about doing business in the UK, and I think it's much the same as everywhere else: once you know the rules, you understand how to work within them.
“We're often too quick to blame government or external circumstances. I'd like to see us all take a bit more personal responsibility for the state of our businesses. The more you look to government for help, the more they'll respond with bureaucracy and red tape.
“The government's job is to create an environment where good businesses can survive, but you can't rely on politicians to fix your business. The best thing the government can do is to leave business to businesspeople. That's the way to help companies flourish.”
In her own words
On the true measure of success
It's not about money, although that's part of it. It's reaching the stage in your life where you can pretty much do whatever you want to.
On office politics
I have seen so many businesses get completely bogged down on bloody car parking spaces or who's using too many Post-It notes. If you dump the small stuff, then you'll focus on what really matters to your business.
On marketing budgets
Now is a very effective time to advertise, because everyone is cutting their spend. You can get some great deals, and if ever there was a time to get your message heard, it's now.
On whether the Dragons demand too much equity
People underestimate the risk we take by investing and the sheer value we add to a business. I've got people who offer me 50% of their business for nothing simply because they want me involved.
On how her staff view her
An employee was once asked in an appraisal if I was a team player. She said: ‘Yes, but only if she's captain.' I think I'm tough, but I know people think I'm fair.
On the crazy business propositions that end up in the Den
The ratio of wacky to commercially viable ideas in the Den pretty much reflects the pitches I get in real life. The difference is, outside the Den I have someone to filter out the crazy ones. To be honest, some of the other Dragons have invested in wacky ideas, so who am I to judge?
On buying out her parents
People are very surprised at the way our family acts with regards to the company, but we maintain that business is business. We each had our own advisers. I wanted to buy, they wanted to sell. There was very little emotion in it.