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Goldsmith

Table of contents 

This note considers corporate raider and publisher James Goldsmith.


It covers -

  • introduction
  • biography
  • studies

Introduction

Variously described as "Attila the Hun with financial genius", as "a capitalist grotesque" or just a very spoiled rich boy, James Goldsmith (1933-1997) was a contemporary of figures such as Robert Maxwell and Kerry Packer. With the exception of L'Express, his attempts to gain influence as a media baron were unsuccessful, failing in bids for the UK Observer and Daily Express.

Biography

Goldsmith was born in Paris and throughout his life had a love-hate relationship with England and authority. His father Francis Goldsmith (1878-1967) was Unionist MP for Stowmarket from 1910 to 1918, served at Gallipoli as an officer in the Suffolk yeomanry and after the 1914-18 War was a director of the Savoy Hotel Co, operator of a chain of luxury hotels in France, giving James a privileged but apparently lonely childhood exacerbated by a bullying temperament. Elder brother Edward Rene Goldsmith (b. 1928), was founding publisher and editor of The Ecologist.

Goldsmith's demeanour as a rich hotel brat failed to impress contemporaries and teachers at Eton College, from which he exited in 1949 after winning £8,000 on a £10 bet on horse racing. He studied briefly with a crammer, leaving after fighting one of the teachers, and then spent a year gambling before compulsory national service in the Royal Artillery.

In 1953 he moved to Paris, acquiring a small company distributing an adrenalin cream for rheumatics and falling in love with Bolivian heiress Maria Isabella (Isabel) Patino (1933-1954), daughter of tin magnate and diplomat Antenor Patino. The romance was marked by an arranged abduction from her father's residence in Paris, legal battles and tabloid headlines (with Goldsmith for example chartering a plane to follow Isabel to Casablanca. Patino reportedly commented "Nothing personal in this, Monsieur Goldsmith, but in my family we do not marry Jews", with a rejoinder from Goldsmith:

True, Senor Patino, but there have to be exceptions. You see, in my family, we do not usually marry Red Indians.

Isabel died five months after their 'Gretna Green' marriage in Scotland; Goldsmith then spent years in legal disputes with his parents-in-law for custody of his child (delivered by caesarean section while his wife was in a coma). Goldsmith's Laboratoires Cassene, launched in 1954, distributed pharmaceuticals under licence in France but experienced difficulties over aggressive marketing and was sold for £120,000 in 1957.

In 1959 he turned to the UK by acquiring 28 pharmacies from Charles Clore. In 1961 he bought a chain of pram and nursery furniture shops, which he then relaunched in partnership with Iraqi banker Selim Zilkha as the Mothercare chain, retailing clothes for mothers and small children. Goldsmith sold his stake to Zilkha in 1962, repackaged - critics more acerbically said pirated - a US slimming product, survived the resultant litigation and increased his wealth by marketing it across France as Milical.

Famously boasting that "when you marry your mistress you create a job vacancy" he had begun a relationship with secretary Ginette Lery in 1957 (a son was born in 1959). They married in 1963, amid a flamboyant affair with Lady Sarah Crichton-Stuart, followed by an equally public relationship with Lady Annabel Birley, younger daughter of the eighth marquess of Londonderry. That resiulted in two sons and a daughter. Goldsmith divorced Ginette but continued to maintain a Paris household with her. He married Annabel in 1978: she remained his London partner, with Goldsmith establishing a third household in New York with Laure Boulay de la Meurthe (by whom he had a son and daughter).

Using loans from Clore's competitor Sir Isaac Wolfson in 1964 - Goldsmith's contempt of mainstream financiers was matched by their wariness of his 'unorthodoxy' - Goldsmith echoed Robert Maxwell through an aggressive accumulation of 51 bakery and confectionery businesses, aggregated as Cavenham Foods in 1965. Like Maxwell he engaged in share raids and asset stripping, through Cavenham, Banque Occidentale and French holding company Générale Occidentale (formed in 1968).

In 1971 Cavenham snared the Bovril Company, recouping most of the cost by unloading its dairies and South American meat operations. That enabled acquisition of Allied Suppliers, the UK's fourth largest grocery chain and owner of major brands such as Lipton tea, in 1972 for £86 million and a lucrative but increasingly controversial involvement through Anglo-Continental Investments & Finance in Slater Walker Securities. In 1973 he acquired US supermarket chain Grand Union Company (531 locations) for £62 million. He became chair of Slater Walker as part of the 1975 Bank of England rescue package and a director of the Rothschild family bank in France.

Critic Richard Ingrams commented that

his financial juggling aroused mistrust. Throughout his life his companies invested in one another, traded with one another, borrowed from one another, and were helped by each other's pension funds. His contempt for financial orthodoxy was as ostentatious as his crushing of minority shareholders' interests.

Criticism by the muckraking Private Eye saw an increasingly paranoid Goldsmith issue over sixty defamation writs in 1976, underpinned by use of private investigators and alleged blackmailing to produce false affidavits. He proclaimed that

You have heard of the power of the press. Now you will discover the power of money.

In 1976 he paid Murdoch US$3 million for 35% of the non-voting shares of the Beaverbrook newspaper group. He attempted to acquire The Observer in 1976 and the Daily Express in 1977. In the latter year he purchased a major stake in French weekly magazine L'Express (later acquired by Vivendi and Socpresse) from Jean-Jacques Servan-Schreiber and associates. In 1979 he launched Now! magazine, at a cost of around £6 million. It survived for only 19 months.

Goldsmith was knighted in 1976. Settlement of the Private Eye litigation opportunely depressed the price of Cavenham shares: Générale Occidentale privatised the group and Goldsmith moved control of his interests to Paris, away from inconvenient questions by UK regulators. In 1978 he paid £133 million for US supermarket chain Colonial Stores (369 stores), using the cash flow to buy J. Weingarten Inc with a further 100 supermarkets in Texas in 1979. In 1982 he gained control of US forestry and paper group Diamond International for £246 million, resold after two years for around £700 million. As a model for Gordon Gekko his 1985 raid on Crown Zellerbach provided a further £400 million. A 1986 bid for Goodyear Tire & Rubber (oil, aerospace, tyres) was more controversial and generated a mere £90 million profit.

Goldsmith liquidated many of his holdings in public companies prior to the 1987 Crash (reportedly accruing around £2.8 billion from sales that included an MBO of his US supermarket interests) and moved to an estate in Cuixmala, Mexico. Those sales were accompanied by sale of 34% of Générale Occidentale to recently privatised French engineering conglomerate Compagnie Générale d'Electricite, which became Alcatel. A 1989 bid with Kerry Packer and Jacob Rothschild for tobacco and financial services conglomerate BAT was unsuccessful and a £1.1 billion stake in US mining giant Newmont did not result in a change of control; Goldsmith exited from Newmont in 1993.

In that year he established the right-wing European Foundation and L'Europe des Nations, centred on criticism of the Maastricht treaty but dismissed as merely a vehicle for his ego. He had more success with creation of the L'Autre Europe party, being elected by French voters to the European Parliament in 1994. During the following year Goldsmith repacked the European Foundation as the UK Referendum Party. In 1995 Générale Occidentale acquired 49% of the shares in Euronews, unloaded to UK news organization ITN after Goldsmith's death.

In 1996 Goldsmith promised to spend £20 million on parliamentary candidatures at the general election, in return being dismissed by one Tory MP as "bronzed, rich, mad".

Voters apparently agreed, or considered that Goldsmith was merely irrelevant. The Referendum Party gained a mere 3% of votes at the May 1997 general election and Goldsmith failed to secure the minimum number of votes for return of his deposit as a candidate for Putney. He died two months later in Spain.

Studies

Studies of Goldsmith include Geoffrey Wansell's indulgent Tycoon (New York: Atheneum 1987), Ivan Fallon's Billionaire: The Life and Times of Sir James Goldsmith (New York: Little Brown 1992) and Goldenballs: The Incredible Story of the Long and Complex Legal Battle between Sir James Goldsmith and Private Eye (Petersfield: Harriman House 1979) by Private Eye editor Richard Ingrams. He makes an appearance in The Gamblers: John Aspinall, James Goldsmith and the murder of Lord Lucan (London: Century 2005) by John Pearson and in Gyles Brandreth's Breaking The Code (1999). Wife Annabel Goldsmith provided a memoir in Annabel: An Unconventional Life (London: Weidenfeld & Nicolson 2004).

For Slater Walker see Charles Raw's A Financial Phenomenon: An Investigation of the Rise and Fall of the Slater Walker Empire (London: Deutsch 1977) and Jim Slater's apologia Return to Go: My Autobiography (London: Weidenfeld and Nicolson 1977).