Hard times bring easy opportunities for Sir Stelios

Published 06th Apr 2009

As he surveys the high street, Sir Stelios Haji-Ioannou says that having the cash to seize any opportunities is key


He has made a fortune from aircraft, cars, cruises and hotels, but as the recession lays waste to businesses across the country, Sir Stelios HajiIoannou has his eyes set on expanding his easyGroup empire in two very different areas - property and pizza.

The billionaire entrepreneur was in London last week shopping for property to expand easyOffice, a company that provides temporary working space to individuals and small firms.

EasyOffice's three existing locations - two in London and one in Glasgow - are leased, but the collapse in commercial property values has encouraged Sir Stelios to consider buying assets. Similarly, easyHotel, another of his ventures, has leased its locations, but now Sir Stelios may swoop on cut-price properties to expand its portfolio.

“Things have almost gone full circle now, as bricks and mortar start to look like attractive investments,” he told The Times. “I've always run my businesses asset-light, but there are opportunities in property and the real estate sector.”

This represents a change in direction for the man who pioneered his low-cost business model with easyJet in the Nineties. The tycoon, estimated to be worth £1.3billion, used a no-frills approach to cut operating costs and undercut traditional carriers.

EasyJet was, for example, an early champion of internet ticket sales as a means of reducing overhead costs. Airlines previously had paid commission to travel agents or had employed a large salesforce to answer telephone calls. He has applied a similar model to his other business ventures: many of these businesses operate almost entirely on the internet.

However, he has not been looking merely for signs of weakness that he can turn to his advantage. He has also been monitoring the few success stories that have emerged in this downturn - and Domino's Pizza has caught his attention, because it is performing well as families trade down from restaurants to eat at home.

Sir Stelios is, therefore, investing more money in his easyPizza venture and is looking for new franchisees and locations. He is also encouraging franchisees to negotiate innovative leasing arrangements. For example, easyPizza stores have offered to pay landlords 10 per cent of turnover rather than commit to lengthy fixed-rate leases.

To take advantage of opportunities, Sir Stelios believes that businesspeople will need access to cash and this will determine who thrives and who will struggle in the year ahead.

He said: “What matters is having enough cash to survive long enough to take advantage of opportunities that will come up. The winners will have cash and the losers will not, it's as simple as that. I think you will discover that entrepreneurs with cash will be very quick on their feet.” Sir Stelios has warned that the economic climate is likely to get worse before it gets better. “I am closer to the real economy than most financiers in the City and I see small and medium-sized companies cutting their payrolls everywhere,” he said. “These are companies of 20 to 50 people losing 5 to 10, and that adds up. We have to assume things will get worse because of rising unemployment and that will make being a low-cost company even more important.”

Source: ' Times '

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