Heseltine: The Sequel

HE'S EMERGED FROM THE SHADOWS OF POLITICAL RETIREMENT. AND THIS TIME HE MEANS BUSINESS

Michael Heseltine is standing over a large wooden desk in his office in west London, phone clasped to his ear, talking in staccato. "Yes, yes, please do that straight away. That's fine. Keep me informed. Thanks. Bye." His long, loping figure strides back across the room and sits in a black leather armchair. "Sorry about that," he says, with a smile in his pale blue eyes. "Now where were we? Ah, yes, I remember."

From his large, sparsely-furnished office in Hammersmith Michael Heseltine is co-ordinating the activities of Haymarket Publishing, the privately- owned publishing house he co-founded in 1959, and which is the source of his considerable wealth, estimated at pounds 200m. His family has owned a majority share in the company since the 1960s.

During his years in high politics he was a silent owner and occasional consultant, but he took over as chairman in March, having raised his family's stake from 51 per cent to 78 per cent over the previous two years. He is now busy negotiating overseas contracts and helping launch magazines.

To see 66-year-old Mr Heseltine rushing around the upper floors of Haymarket House, an unprepossessing building overlooking Hammersmith tube station and an adjacent kebab shop, co-ordinating with his assistant, and later striding back and forth from his chauffeur-driven car, comes as a surprise. Mr. Heseltine's long and eventful public life seemed definitively to be over the day after the Tories' defeat in the 1997 general election, when he was taken to hospital after a massive angina attack.

By then, Mr Heseltine's share in Haymarket had made him one of the country's richest men; he was past retirement age, and it seemed a genteel life of tending his arboretum, Caribbean holidays and gardening was beckoning. Instead, he is the hands-on chairman of a company that publishes numerous leading specialist magazines and is one of the biggest exhibition organisers in the country.

"Pah," says the former chairman of the Board of Trade when I suggest he might have retired quietly. "I mean, it didn't enter into my head. I couldn't do nothing, I'd have gone mad." But couldn't you just have taken it easy? He smiles, replying rapidly and enthusiastically. "You see, those words are a contradiction in themselves because taking it easy is doing much less, but that wouldn't be taking it easy, it would be hell. I mean, how can you lead a life as deputy prime minister and then just suddenly say, `OK, feet up'?"

In the flesh, the famous full head of blond hair is now going a little paler - not grey exactly, but slightly washed out. He has strikingly long, wispy blonde eyebrows. He still has a true politician's ability to look as if he is truly fascinated by everything you say to him, and Mr Heseltine betrays none of the arrogance some of those who worked with him, at the Department of Trade and Industry and in the Conservative Party, say is his trademark. He is wearing a charcoal suit, a blue shirt and a striped tie, and although he bounds from sofa to desk to door like a sprightly young man, there is a hint of weariness in his voice.

His private office at Haymarket (he has another one in the centre of London) is large but barely furnished, a desk at one end, a black leather three-piece suite at the other, the long window looking out onto the constant traffic of the Hammersmith Road.

Mr Heseltine's schedule would tax a young Internet entrepreneur, let alone an elderly gentleman with a weak heart. Before our appointment, he had been at a business meeting in Paris, and on his return, sitting on the Eurostar, he spent three hours dictating his memoirs, which are to be published next year. We met at five, and he has an hour-long meeting at six and another after that. His Haymarket activities are on top of his roles as chairman of the recently established Anglo-China Forum, Millennium Commissioner and MP for Henley-on-Thames.

But he spends virtually all of his time at Haymarket. He returned to the family firm as a director the day he left hospital in 1997, and applied himself with vigour, negotiating a complex publishing deal in China and helping the company's drive into America. He took over as chairman when the long-time incumbent Lindsay Masters retired and he is buying back more shares in the company from the other directors' 22 per cent stake. He says he aims to control 100 per cent.

Yet he makes a point of praising his management. "I had absolutely nothing to do with the business for almost 30 years," he says. "I cannot emphasise enough that the current profitability is entirely due to the efforts of the team and not me."

At one point he asks for my notepad and draws a map of the executive structure, scribbling down who should take credit for which successful company division. Operating profits for the 1998 calendar year were pounds 16.8m on a turnover of pounds 130m, an increase from pounds 11.5m in 1996.

"I love the business from way back, and it's still incredibly exciting," he says. "I still feel a considerable interest in sharing its evolution and development, and publishing is a very fast-moving business." Haymarket has developed curiously since Clive Labovitch brought Mr Heseltine in as a junior partner in 1959.

The man the tabloid press were to dub Tarzan had started a publishing business, Cornmarket, after coming down from Oxford in 1955. He also established himself as a landlord - a ruthless one, says a former tenant, who claims Mr Heseltine and his partners would "give no leeway at all" to the people who rented their flats.

Although Mr Heseltine is publicly modest when it comes to taking credit for Haymarket's ideas, it was under his auspices that ground-breaking magazines such as Management Today and Campaign were established in the 1960s. They are still in the stable today, examples of the kinds of highly specialist professional publications for which Haymarket has become known.

It publishes an array of magazines, from mass-market publications such as What Hi-Fi? to the specialist niches of GP and Marketing. Launches this year include The Net (an Internet magazine), Stuff (a consumer title), and American and German versions of the highly-successful PR Week. Many of the

publications are distinguished by their predominance in their particular market: GP counts more than 70 per cent of family doctors in its readership.

Mr Heseltine says Haymarket will launch a magazine only with the aim of becoming the top-seller in its particular sector. The lack of high- profile general interest magazines keeps the company's profile low. "I look at the men's and the women's market and I'm well aware we're not in either," he says. "But everyone else is - I mean, why make trouble for yourself? Of course we are looking to see how we could get there but we haven't got anything planned at the moment."

Haymarket's philosophy, crafted by Mr Masters and other senior executives, and practised by Mr. Heseltine now, is one of growth through investment, launches and acquisitions, but with a constant eye on profitability.

"We're investing far more now than we ever have done, because we're making such good profits," says Mr Heseltine. "In the early days, we didn't make so much and we didn't put that much back into the product. Today we're in a position where we can spend significant sums doing what we like doing and that's creating new magazines."

This philosophy has built a highly successful publishing house, but Haymarket remains a minnow compared to market leaders such as Emap and IPC, and lacks the cachet of other leading privately-owned publishing houses including Conde Nast, which publishes Vogue and Tatler, among others.

Mr Heseltine's focus is slightly, but markedly, different from that of someone like Conde Nast's UK managing director, Nicholas Coleridge, who describes his hugely successful American-owned magazine house as "an editorially- led company with a passion for making big money".

I ask Mr Heseltine whether he will approve of a particular magazine project because of an emotional attachment to the quality or stylishness of the product, and his answer is curt. "No. We are simply a profitmaking business. Every product we make has to stack up in the relatively short term. We have to see a way through in three years. We're certainly not in the business of saying, well, in 10 years we'll have a look at this and see how it's getting on."

More than 20 of Haymarket's titles have established an online presence. Most notable is that of F1 magazine, which, with its 17 sister publications around the world (all called F1, all published by Haymarket) attracts more than four million website "hits" a month from motor-racing fans.

Mr Heseltine is a declared sceptic when it comes to speculating on the Internet. "I'm very cautious," he says. "I think huge sums of money are going to be lost. "I'm deeply sceptical of the formula whereby people say, look, why don't you put together a package of some combination of your magazines, announce that you've got a package, take it to the stock market, raise tens of millions of pounds which you then use to advertise the existence of your package, and hope to God you make money. Now, I don't see where that money is and I'm not prepared to raise a huge amount in order to lose it."

What about banner advertising, and links to e-commerce, and ... ? He cuts me short. "I know all the arguments of where it's going to come from," he says. "Show me someone that's doing it."

Mr Heseltine sees the Internet as another medium to be used alongside his core industry. "Now, don't you have any doubts," he says. "We have websites like there's no tomorrow. But a lot of people are doing it on a hope and a prayer."

Doesn't he think electronic publishing could kill the traditional printed media? "No I don't. I look at all that stuff but you can't touch it, smell it or feel it. The two media complement each other. I lived through the great bubble of television. And the great anxiety at the time was that the printed word was finished. There was as much hype as there is now: this wonderful all-singing, all-dancing new medium was going to sweep the world. Well, it did. But what did it do? It educated parts of the world faster than anything before in history.

"Actually what happened was the exact opposite [of the predictions]: now you have 500 new magazines being launched every year in America, and 400 in Britain, in every niche, in endless new niches. We're running to keep up, and in electronic media too.

"In the end, though, if there isn't payback, people go bust," he says, still referring to the Internet boom. "Look at the Japanese phenomenon. The world believed that you could go on inflating those assets because there was something peculiar about the Japanese economy, and that's the way it was, old boy. And in the end the bubble burst. Generations always have to learn the same lesson: unremunerated capital leads to bankruptcy."

Haymarket insiders say Mr Heseltine's arrival two years ago "lit a firecracker" under the company, and that one of the biggest differences he has made is in accelerating overseas expansion. "There are negotiations going on all over the place and we're still looking to grow," he says.

Mr Heseltine's delight in hatching plans for expansion is palpable. He is plainly a man excited by making marks on the world and I ask if the entrepreneurial thrill is the same as it was when there were four of them starting out in the Sixties.

"Well, it was very different then, but the entrepreneurial thrill is not necessarily related to the size of the company. I'm just as excited by a magazine launch now as I ever was, oh yes. And although I personally don't have the skill to put a magazine together, I am fascinated and captivated by the quality of the magazines. There's nothing here of which I'm not proud."

But after living a promotion away from being Prime Minister for so long, can he really be interested in GP magazine? "It's not like that, you see," he says enthusiastically. "GP has now become the number one in its sector for the first time since we owned it. And it's not just GP. There are so many projects."

But doesn't he rue not having been Prime Minister? "Well, I mean, you play the game and you don't quite make it," he says, with what looks like a slightly sad smile. "But I don't live in the past."