Richard Branson is the fourth richest man in the United Kingdom with an estimated net worth of around $4.2 billion. What a lot of us do not know, however, is that he worked real hard for his Virgin brand to become the business empire that it is today. What began as a mail-order business for audio records has transformed to a huge conglomerate with more than 400 companies under its wing.
Starting the Business
Branson was educated in good schools like Scaitcliffe School and Stowe School. His father was a barrister and his grandfather was a Privy councilor and judge of the High Court of Justice. Branson had a hard time keeping up in school, however, because of dyslexia. As a result, his academic performance was extremely poor.
What Branson had was an ability to recognize the needs of and connect with other people. Those were the days before the advent of downloadable music and actual vinyl records were still the choice of the music-going crowd. The price of the vinyl was on the high side however because of marketing agreements between the record labels and the actual seller. Branson did away with this and set up a mail-order business, advertising records for sale in The Student Magazine.
The business was named “Virgin” because he was new in the field. It proved to be a huge success so much so that in 1971, Branson opened up his own record store. It encountered some problems however as authorities discovered the store to be selling export stock. Branson paid a fine and the unpaid tax in order to head off litigation.
By 1972, Branson had already earned enough to establish Virgin Records. He also bought a country estate that also served as a recording studio. Soon, he was signing up artists for his label. The label’s first release was “Tubular Bells” by Mike Oldfield in 1973. It went on to top the album charts in the United Kingdom.
Virgin also signed Sex Pistols, a punk band that other labels were not ready to promote. The label also released albums by unknown avant garde bands like Faust and Can. In the early 1980s, the label started releasing records from the band called Culture Club, which introduced to the public Boy George.
Expanding the Virgin Territories
In 1984, Branson launched Virgin Atlantic Airways as a challenge to himself. He has always wanted to pursue a huge and seemingly unachievable task and overcoming it with a flourish. The airline suffered some setbacks however. This forced Branson to sell Virgin Records to EMI in 1992 for £500 million. It was one of the hardest decisions in Branson’s life since the record business was the root of his business empire. But he wanted to give his airline business a shot at success so he swallowed the bitter pill. Eventually, Branson established another label called V2 Records.
Branson eventually got his airline to succeed and even expand. In 1996, he bought Euro Belgian Airlines and renamed it Virgin Express. In 1999, he launched Virgin Blue in Australia, eventually renaming it to Virgin Australia. In 2006, Virgin Express merged with SN Brussels Airlines to form Brussels Airlines. In 2007, Branson took a 20 percent interest in AirAsia X of Malaysia.
He also started a national airline in Nigeria called Virgin Nigeria. In 2007, Branson launched Virgin America, with flights flying out of the San Francisco International Airport.
Branson also entered the railway business in 1993 by setting up Virgin Trains, which was awarded the franchises of Intercity West Coast and the cross-country sectors of British Rail.
In 1994, he launched Virgin Drinks that sold Virgin Cola and Virgin Vodka.
Branson also owns Virgin Galactic, a company that plans to take paying passengers into suborbital space using the technology behind Spaceship One. Those who want to fly in this were charged $200,000.
He also set up Virgin Fuel after a meeting with environmental advocate Al Gore. The company was set up to respond to the dangers of global warming by offering revolutionary and cheaper fuel. Profits from Virgin Atlantic and Virgin Trains were to be used to help research for environmentally friendly fuels.
Branson also used to own 75 percent of Virgin Mobile. This has merged with NTL, a company that provides cable television, broadband and telephone services. The resulting company is called Virgin Media, though Branson owns only 15 percent of this.
In 2006, Branson teamed up with several authors and filmmakers to form Virgin Comics and Virgin Animation. These companies are focused on the entertainment sector and are in charge of creating new stories and characters.
In 2007, Branson established the Virgin Health Bank. The bank offers parents a chance to store stem cells from their baby’s umbilical cord in private and public stem cell banks.
In 2008, Branson announced the opening of a chain of health care clinics under Virgin Healthcare. The clinics offer conventional medical care and homoeopathic and complementary therapies.
Branson was also involved in Formula One for a couple of years under Virgin Racing. His team however failed to win and landed last in 2010.
With the Virgin empire having a vast reach, it is only natural that it encounters some problems. In the 1990s, Virgin charged British Airways with poaching of passengers and hacking into its computers. Virgin won, forcing British Airways to cough up £3.61 million. After paying £3 million to the lawyers, the rest were distributed to the staff and employees of Virgin Atlantic.
In 2006, there were also allegations of price fixing between Virgin Atlantic and British Airways. As it was Virgin that tipped off authorities, the company escaped without a fine. British Airways was penalized £271 million.
In 2012, Virgin Rail’s franchise for the West Coast Main Line ended. The franchise was awarded to Virgin’s competitor called FirstGroup. Branson suggested there were mistakes in the process. The contract with FirstGroup was rescinded after the Department for Transport discovered significant technical flaws. This allowed Virgin Rail to continue to operate the train line.