My First Million

February 19, 2010 6:16 pm

My First Million: James Daunt

James Daunt, 46, is the founder of Daunt Books, the independent bookshop based in Marylebone High Street, with branches in Belsize Park, Hampstead, Holland Park and Chelsea.

The shops are known for their old-fashioned interiors and organisation of books by country instead of subject.

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My First Million

Daunt was educated at Cambridge University, where he read history, and he went on to work at JP Morgan for four years as an investment banker. He opened his first shop in 1990. He lives in north London with his wife and two daughters.

Did you think you would get to where you are?

I don’t know that I have gone anywhere! I am still on Marylebone High Street, selling books in much the same way as when I started. During my time in banking, I was young enough and arrogant enough to think I could go off and do other things.
It wasn’t easy giving up a job where I was intellectually satisfied.
As my main interests are travel and reading, I wanted to combine them.
I was 26 when I started Daunt Books. I raised around £240,000 through shareholders under the Business Expansion Scheme. It’s a shame that the BES no longer exists. The help and advice from some of the shareholders was also invaluable. Now, we are one of a dwindling number of independent shops in a bookselling world dominated by chains.

When you realised that
you had made your first million were you tempted to slow down?

I suspect my turnover reached £1m in 1995, about five years after we started. I had no intention of slowing down at all. I wanted to provide opportunities for my staff, and for that the business needed to expand. Our annual turnover now is about £7m, and we have 40 employees.

What is the secret of your success?

It is having very good people who are committed to the business. The key is that they stay and they have experience. Of our seven staff at Marylebone, one has been with me for 20 years and another for 18 years. They are vastly more knowledgeable than the short-term staff that predominate in the chains.

Our successful series of talks has become integral to the business, drawing in new customers and encouraging existing ones to feel a sense of belonging to a Daunt Books “community”. We just had AS Byatt in conversation with Leo Jensen, an editor of Vincent Van Gogh – The Letters. This talk attracted 200 people, and we were able to promote the book in a way that is not viable in a chain setting.

Have you had time for personal financial planning?

I am my own money manager. Having had a few years in a bank, I should hope that I take a sophisticated approach. The JP Morgan training was fabulous. I don’t take any advice at all. The problem with advice is that you have to pay for it.

What is your basic business philosophy?

Think long-term. There is often a temptation to go for a short-term fix, but my principle is to consider what will benefit us most in 10 and 20 years’ time. Even as a start-up, we built the business around systems with large latent capability that would have allowed us to run a small chain when we didn’t even have one.

What was your biggest business mistake?

We opened at the wrong time in the economic cycle – a major mistake. The recession that followed in 1991 was devastating. The whole of Marylebone High Street closed down, except for Boots, the newsagent and us. The silver lining is that it allowed a complete regeneration of the area.
It took five years, but we now find ourselves at the heart of a vibrant high street with a mix of really good shops.

Do you want to carry on till you drop?

I cannot think why one wouldn’t. Early retirement to me would be unthinkable. At the moment, I enjoy what I do just as much as I did when I started.

Have you made any pension provision?

I don’t have one. I don’t understand why a pension is marketed as something that everybody should have. Actuarially, there are winners and losers in retirement. A man’s pension does not last as long as a woman’s, and you need to think realistically about how long you might live. My business will be my pension.

What is your commitment to charity?

Supporting local schools, as we see this as the most logical association for a bookshop.

Do you allow yourself the odd indulgence?

Travel, in particular around the Middle East. We were in Syria last half-term, and I know Turkey extremely well.

What was your most prudent investment?

Investing in staff, encouraging the talented ones to make a career here.

Have you taken steps to pass on your wealth?

Yes I have. That is prudent and sensible, particularly if it involves a business. But I would not seek to minimise inheritance tax. You cannot believe in the NHS but not in taxes, and I support taxing unproductive parts of the economy, like legacies, rather than businesses. I also like the Scandinavian way of taxing consumption – the Danish tax rate on cars is 180 per cent.

What is the most you have ever paid for a bottle of fine wine or champagne?

I do buy wine by the case that can age because I like old wine. In restaurants, however, I am a house-wine drinker.

What is your money-saving tip in the recession?

Lead a quiet life. Read books instead of going out to restaurants.

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