It’s been a year full of ups and downs for billionaire Sir Richard Branson with his airline, hotel, cruise and fitness businesses all suffering due to the coronavirus pandemic. However, it's not the first time Branson has navigated stormy waters. Click or scroll through to discover how he built his business empire, the controversies the edgy entrepreneur has endured along the way, and how he's reacted to this year's extraordinary events.
After struggling during his school years and considering himself to be "the dumbest person at school", Branson left school at the age of 16 without any qualifications. Before leaving, he'd set up the magazine The Student in 1968, which was to be the first of hundreds of ventures pursued by the future billionaire. Taking on the roles of both editor and advertising manager at such a young age, Branson was already demonstrating an eye for what appealed to people and how that could be commercialised.
The magazine itself wasn’t a hit but Branson's means of funding it – setting up a mail-order record company – was a big success. By selling the latest music hits for lower prices, he had officially started his first profitable business. The revenue went into setting up his first bricks-and-mortar store on London’s Oxford Street: Virgin Records. Branson and his friends picked the name because they were new to the business – little did they know that it would eventually become a brand recognised all over the globe.
The money from the record shop even allowed Branson to scrape together just enough to open a recording studio in a rundown country house. The newly-formed label signed a 19-year-old named Mike Oldfield (pictured left) and released the album Tubular Bells in 1973. The opening track catapulted Oldfield, Branson, and the Virgin label to fame when it was the title theme in one of the most famous horror films of all time, The Exorcist.
Four years later Branson signed the Sex Pistols when nobody else would. Other groups including the Human League and Culture Club saw similar success in the 1980s, and artists signed by Branson became genre-defining musicians of their decade.
Purchased by Branson in 1979, Necker Island is located in the appropriately named British Virgin Islands. He had fallen in love with it a year before on an all-expenses-paid trip that he’d been offered after showing an interest – despite knowing that he didn’t have the $6 million (£3m) that the owner was asking for it. He agreed to go on the viewing trip arranged by the owner on the condition that he could bring a guest…
Branson chose to take Joan Templeman, who he married on that same island 11 years later. Wanting to impress his future wife on that first viewing, Branson offered all that he could afford for the island, but the owner rejected his measly $100,000 (£49k) offer. A year later, however, Branson’s luck changed. The owner of Necker Island had been unable to sell and so decided to take on Branson as a buyer. As Virgin Records had been doing well, Branson was able to offer a slightly better $180,000 (£89k), and the island was his.
To seal the deal, the Virgin founder had to agree to build a resort on the island within four years, and reportedly it took around £7.8 million ($15m at 1979 rates) to build the grand retreat on the 74-acre plot. But ownership of this small piece of paradise hasn’t all been plain sailing, and Necker Island has been victim to huge amounts of damage as a result of Hurricanes Irene (2011) and Irma (2017). All necessary repairs have since been made to the retreat, which people can visit through Branson's Virgin Limited Edition, a business that focuses on Branson's collection of holiday retreats around the world. In fact, this year the business reported a 27% increase in bookings for when the island was set to reopen on 1 December in spite of the coronavirus pandemic.
In 1984 Branson founded Virgin Atlantic. He had pledged to get the transatlantic airline off the ground within three months, and the venture quickly became his most successful. It was born out of Branson’s frustration with airlines he felt didn’t seem to care about their passengers on or off board – a feeling heightened when he was left stranded in Puerto Rico after a connecting flight to the British Virgin Islands was cancelled due to ‘lack of passengers’. After chartering a plane and filling it with disgruntled and ejected passengers, Branson decided it was time to take on the industry.
In a Virgin blog post, Branson explains how he phoned Boeing asking if they had any 747s available – a conversation which led to the leasing of his new airline’s very first plane. The carrier’s inaugural domestic flight from Gatwick to Newark departed full of friends, family and media on 22 June 1984.
Virgin Atlantic soon emerged as a fierce competitor to British Airways and the rivalry came to a head in 1993 when BA paid out £2.8 million ($4m) in an out-of-court settlement after a so-called ‘dirty tricks’ campaign. According to reports BA staff were doing all that they could to poach Virgin’s customers, from directly calling them to offer cheaper flights to rifling around airport lounge bins for discriminating evidence that could use to paint the Virgin brand as unsavoury. Branson himself received £476,000 ($684k) from BA and a further £104,000 ($150k) for the company. Branson reportedly gifted his employees the money in bonuses.
Despite coming out of the dispute victorious, Branson had realised that BA was a force to be reckoned with, and that in order to protect his business and its people he would have to pour more of his time and effort into Virgin Atlantic. As a result, he reluctantly sold Virgin Records to Thorn EMI for around £780 million ($1.37bn) in 1992. The entrepreneur said the sale reduced him to tears and he likened the loss of the label – which had just signed Janet Jackson and the Rolling Stones – to selling his children.
Returning to his music business roots, Branson launched Virgin Radio on the UK airwaves in 1993. He recruited DJ Chris Evans as a breakfast show host in 1997, who drove up listener numbers thanks to a fanbase gained from his BBC radio work. Evans was then part of the consortium which bought the station just four years later for £85 million ($138m). Branson kept a 20% share of the station, Apax Partners took 20%, and Evans' Ginger Media Group took the majority share of 60%.
Having made so much cash in his various business projects, Branson founded Virgin Direct, later to become Virgin Money, in March 1995. The company offered a range of investment products, and it received around 4,000 calls within its first full day of business. In the course of the following month, £40 million ($63m) was pumped into the business.
Nowadays Virgin Money offers a much wider range of financial products, including credit cards, travel money, mortgages and insurance. In 2012, Virgin Money bought Northern Rock plc and rebranded it as Virgin Money plc. After merging with Clydesdale Bank in 2019, the Virgin Money brand will also replace various UK-based banks, including Clydesdale Bank and Yorkshire Bank. The financial company floated on the stock market in 2014 and in March 2016 it was reported that Branson received £12 million ($14.8m) after its first full-year dividend. In 2020, while the share price suffered initially it has started to pick up towards the end of the year and while it is still down 30% compared to the start of the year, it has risen by nearly 50% in the last three months alone.
Branson looked to expand into other forms of transport and Virgin Trains launched in 1997, ferrying Brits across the UK at unrivalled speeds. Popular routes such as London to Manchester were suddenly taking less than two hours. Branson pocketed £24 million ($30m) in revenue in 2017 from his share, but at the end of 2019 Britain’s longest-running rail franchise came to an end. After 22 years and nearly 500 million journeys later, the last Virgin train came to a halt as owners Virgin Group and Stagecoach were denied the right to continue to run trains after failing to meet company pension rules. The companies took the UK's Department for Transport (DfT) to court over the decision, but lost the case in June this year.
In 1999 Branson sold off part of his airline business when Singapore Airlines acquired a 49% stake in Virgin Atlantic, which earned the company £572 million ($920m). It later sold its share to American air carrier Delta, which is why Virgin and Delta codeshare flights today. Virgin Atlantic had established itself as the favourable airline for those wanting to travel in style. But while the airline is keen to preserve its image, Virgin Atlantic also wants to keep with the times, and in 2019 it abolished the outdated rule that female cabin staff had to wear make-up.
Branching out into another industry, Virgin Mobile launched in 1999. The wireless communications brand offered cheaper mobile tariffs and was eventually purchased by NTL:Telewest in 2006, creating the first ‘quad’ provider – internet, television, mobile and phone. As part of the deal Branson received 6.6 million shares in the business. Later that year everything came full circle when NTL:Telewest licensed the Virgin name in a 30-year agreement, at a cost of £10 million ($12m) a year, and in early 2007 rebranded as Virgin Media.
When Virgin Media was taken over by US company Liberty Global for £15 billion ($18.5bn) in 2013, Branson netted £201.7 million ($248m) from his remaining shares in the business. Virgin Media now sits alongside BT and Sky as the UK's leading providers of household media services, and this summer owner Liberty Global annouced it was merging Virgin Media with O2, a mobile phone company owned by Spain's Telefónica, to become one of the UK's biggest entertainment and telecommunication firms. However, the £31 million ($41m) deal is currently being investigated by the UK's competition regulator. Regardless of whether the deal goes ahead, it's quite a legacy for Branson, who still receives the annual licensing fee from the Virgin Media business.
After the success of cheap tariffs for Virgin Mobile UK, Branson launched Virgin Mobile Australia (2000), Virgin Mobile USA (2001) and Virgin Mobile Canada (2005). In 2006, Virgin sold its 74% stake in Virgin Mobile Australia to venture partner Optus for a rumoured AU$30 million ($22m/£12.7m). In 2009, Branson sold Virgin Mobile USA to Sprint and reportedly collected around £196 million ($277m) from the deal. Also in 2009, Bell Canada acquired Virgin Group’s 50% stake in Virgin Mobile Canada for £111 million ($157m). Lifelong agreements for licensing the brand name exist for all companies, which bring in millions every year.
Branson took a dip into fitness when he launched the Virgin Active gym brand in 1999. The brand was sold to South African private equity firm Brait for £682 million ($806m) in 2015. At the time of its sale, Virgin Group owned 267 clubs across nine countries with around 1.3 million members. Branson banked £230 million ($285m) from the sale and retained a 20% stake. During the pandemic gyms have had to close for the most part, and in April Branson had to step in to help the ailing fitness chain. Alongside majority owner Brait, Branson (through the Virgin Group) contributed £4 million ($5.3m) to a £20 million ($26.6m) loan for Virgin Active. Virgin also hit pause on £10 million ($13.3m) in royalty fees that the fitness chain was due to pay.
Of course, Branson hasn’t just settled for planes – he has also repeatedly reiterated his dream of sending people into space on the world's first commercial spacecraft carrier. Virgin Group initially invested $100 million (£81m) into Virgin Galactic in 2010, and the same year Aabar Investments injected £219.5 million ($271m) for a 31.8% stake, as well as rights to research and launch flights from the UAE. In 2011, Aabar invested a further £78 million ($96m), bringing its stake to 37.8%. Boeing has been the most recent company to invest in Branson’s space dream, and in 2019 it contributed $20 million (£16.2m) towards the project.
VSS Enterprise (SpaceShipTwo) suffered a tragic setback in 2014 when its maiden test voyage exploded, killing the co-pilot and injuring the pilot. However, a successful sub-orbital test flight in 2018 has led to almost 8,000 people registering their interest for a trip into space, and Virgin Galactic has already sold 600 tickets for its inaugural flights, which were due to take place later this year but have been delayed until 2021. If you want to embark on one of Branson’s space flights, a ticket will set you back a cool $250,000 (£202k). The company listed on the New York Stock Exchange in October.
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Virgin opened its first branded hotel in 2011, 26 years after launching Virgin Holidays. Virgin Group’s first holiday accommodation was the 1920s Old Dearborn Bank Building in Chicago, which it purchased in a cash deal worth $14 million (£8.6m). Four years later in January 2015, Branson opened the first of his Virgin Hotels in Chicago, Illinois and at the opening party the outgoing Branson danced on top of a car (pictured). Geared towards female business travellers, rooms – called 'chambers' – have luxurious Dressing Room areas and guests use an app called Lucy to interact with hotel staff.
A second Virgin Hotel opened in San Francisco in 2017, and its New York City and Las Vegas hotels were due to open this year, although both openings have been delayed until 2021. However, Virgin was still able to open its Nashville location in June. The first Virgin Hotel due to open outside of the US is in Edinburgh, Scotland, but plans have been put on hold due to archaeologists having found ancient artefacts on the plot. The new opening date is set for 2021.
Back in October 2017 Virgin partnered with Hyperloop One, which is just one of the companies seeking to make the sci-fi dream of cross-country high-speed travel in low-pressure tubes a reality. The start-up uses the Hyperloop design that billionaire Elon Musk's Tesla and SpaceX developed, and seeks to bring Virgin Hyperloop One to market with Branson serving as chairman. The goal is to speed up journey times in America, India and Saudi Arabia.
In October 2019 Virgin signed a deal with the government of Saudi Arabia to build a test track for the concept, and he is pictured here with the Prime Minister of the UAE at one of the hyperloop partnership unveilings. The 22-mile (35km) track will be built alongside a research and development facility and manufacturing plant, north of Saudi Arabia’s commercial centre Jeddah. Currently a journey from Riyadh to Jeddah takes 10 hours, but Virgin Hyperloop One predicts that with the technology it currently has in development it will take 76 minutes once the project is completed.
Formerly known as Virgin Cruises, Branson's cruising company started as an attempt to lure non-cruisers into the market following research that showed 85% of people would give a cruise holiday a try. The source of the research, Bain Capital, actually has a majority share of what is now known as Virgin Voyages. The inaugural sailing of the company’s first luxury cruise ship, Scarlet Lady, has since been postponed as a result of the coronavirus pandemic and the cruise industry as a whole remains at a standstill after enduring a no-sail order in the US for most of the year.
The last couple of years have seen Virgin Atlantic make hefty losses, including a £49 million ($60.6m) loss in 2017, and a further £26 million ($32m) loss the following year. The company’s situation has only worsened due to the coronavirus pandemic, with Virgin Atlantic having cut 4,650 jobs out of its 10,000-strong workforce. Virgin Australia, of which Branson was a shareholder, entered voluntary administration in April after failing to get a loan from the Australian government, although in September it was bought by US-based private equity firm Bain Capital for AU$5 billion (US$3.8bn/£2.8bn), which will have to deal with its AU$6.8 billion (US$3.9bn) debts.
Meanwhile, the British arm of the business caused a stir after requesting £500 million ($618m) from the UK government to keep it afloat – despite that being only a fraction of the billionaire’s own personal wealth. In July, Virgin Atlantic finalised a £1.2 billion ($1.6bn) deal to rescue the airline, which includes £200 million ($266m) from Branson’s Virgin Atlantic Group, funding from US hedge fund Davidson Kempner Capital Management and other investors. Branson’s treatment of staff has also lost him public favour, as in March the company told employees to take eight weeks’ unpaid leave as the few flights that were still running were almost empty. In response to earlier criticism, Branson said that he was asking for a commercial loan rather than a handout, and he has referenced other airlines that have received similar help, such as easyJet’s £600 million ($741m) ‘coronavirus loan’.
But Branson's offer to mortgage the island as collateral for the UK government loan came under fire as many criticised the British entrepreneur of benefiting financially from his island's location in the tax haven of the British Virgin Islands in the past. Branson has always maintained that he bought Necker out of "love" and not for tax reasons. And it isn’t only Branson's tax history that has come under scrutiny during the COVID-19 pandemic...
Once Branson began asking for public money, critics started to question other actions previously taken by the billionaire. His business Virgin Care, founded in 2010, took the UK's National Health Service (NHS) to court in 2017 after it lost out on a £82 million ($101m) contract bid to run children’s services in the south of England, which resulted in an undisclosed settlement from six clinical commissioning groups. The co-founder of Virgin Care, Dr Vivienne McVey, rejected the idea that the group had sued the NHS however, saying that the company had actually just disputed the decision on the contract. The commissioning groups refused to discuss the issue further, and instead chose to pay Virgin Care to end the debate. McVey also emphasised that Virgin Care never made any profit from the work it carries out.
In better news, on 8 November this year Virgin Hyperloop One made history when it tested human hyperloop travel for the first time. The trial journey took place on a 0.3-mile (500m) test track in the Nevada desert and the first brave passengers were Virgin Hyperloop One's Josh Giegel, co-founder and chief technology officer, and Sara Luchian, director of passenger experience (pictured). They travelled the length of the test track in just 15 seconds, reaching 107mph (172km/h), although that's a fair way off the company's plans to reach speeds of more than 620mph (1,000km/h).
This year has seen Branson dig deep for his Virgin businesses, through loans and government lobbying. But Branson is also well-known for his philanthropy. Virgin Unite was founded in 2004 with the premise of connecting people and entrepreneurial ideas to create a better world. The overheads and costs of the charity are funded by Branson and Virgin Group, which allows for all donations to go directly to the charity efforts. The charity founded and supports many different projects including The B Team, The Carbon Room, The Elders and Oceans Unite. Branson himself is also listed as a supporter of over 30 different charities including Children With AIDS, Cancer Research and Greenpeace.
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Another of Branson’s interests is the political disruption in Venezuela. Branson decided to pair his music knowledge and charitable ways and threw an aid concert for the country in 2019. Inspired by events such as Live Aid, which was held in 1985 to raise funds for the Ethiopian famine, Branson’s concert Venezuela Aid Live was to raise money to get supplies to what used to be South America’s richest country. He also hoped that the event would put pressure on President Nicolás Maduro to allow that aid through the Venezuelan border. The concert received mixed reviews, but hundreds of thousands of people attended the free event in Colombia, and it reportedly raised $2.5 million (£2m) within four days.
Despite this year's ups and downs, Sir Richard Branson is worth $4.5 billion (£3.35bn) according to Forbes as of 22 December. Whether he wins the race for space remains to be seen, but you can be sure that his business ambitions will continue to reach for the stratosphere.
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