Viscount Linley interiors firm takes £1m hit as orders dry up

Cutting back: Viscount Linley’s pay rose by a modest £4,600 to £173,500
12 April 2012

Viscount Linley saw his bespoke furniture and interiors business tumble by nearly £1 million into the red last year, according to accounts filed at Companies House.

Linley, the business of the Queen's nephew, boasts Elton John, Mick Jagger and Oprah Winfrey among its clients but has been hit by the financial crisis. Millionaires in London, Moscow, Europe and the US have put off hiring the company's services, and many property developments have been mothballed.

A spokeswoman for the viscount said: "It was particularly the large interiors projects that were affected. People have not been moving house, so the market has been very quiet."

The accounts reveal that a profit of £199,147 in 2008 turned into a loss of nearly £1 million last year as sales fell from £7.7 million to £5.1 million.

The document states: "2009 was a difficult trading period with the global economic crisis impacting on turnover and leading to a loss for the year.

"In response a full review of the business was conducted which resulted in cost savings in both personnel and overheads." Linley cut its marketing budget and decided not to replace staff who left, slashing the payroll from £2.3 million to £1.8 million. The viscount gave himself a £4,600 rise to £173,500.

In October, Linley hired a new managing director, Olivier Cardon, from French interiors group Roche Bobois. The former banker took over from Craig Allen, Linley's creative chief for 10 years, who left for soaps and fragrances group Molton Brown. "Olivier is the man to lead us out of recession," said Linley's spokeswoman. She added: "Everyone I have spoken to in the luxury goods industry says last year was the worst anyone can remember." However, she said that sales were starting to pick up.

The tough times for Linley began after a Russian oligarch known as the "cashier to the Kremlin" became a shareholder in late 2008. Sergei Pugachev, worth more than £3 billion by some estimates, has close ties to Russian prime minister Vladimir Putin and has installed himself and his two sons Alexander and Victor as directors on Linley & Co's board.

Pugachev was already friends with the viscount, taking him on bear-hunting expeditions in Siberia. Linley reciprocated by inviting him to a pheasant shoot in Windsor Great Park.

The oligarch made his fortune in shipyards and property deals but also runs a luxury goods business including the French delicatessen chain Hediard and Russian watchmaker Poljot. In 2008, it was hoped he would help expand Linley internationally. While that seems to have been put on hold last year, the spokeswoman said this year would see more overseas moves, potentially including stores in Moscow.

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