Lord Linley feels pinch in Pimlico

12 April 2012

THE Queen gave us the phrase, 'annus horribilis'. But it could just as easily be applied to her nephew Lord Linley. This year he has had to cope with the deaths of his mother and his grandmother.

Then he was caught up in the row over cheap rent for royals living in Kensington Palace, once home to Diana, Princess of Wales. And now it seems that the upmarket furniture company he founded nearly 20 years ago is having trouble persuading people to pay its very upmarket prices.

Lord Linley, who likes to be known as 'Dave', founded the Linley company in 1985. His shop in London's affluent Pimlico district is a haven of carved wooden furniture and elegant mirrors. A Linley table lamp can cost £700 and a set of garden furniture more than £4,000.

But new accounts just filed at Companies House show that although Linley's business has increased its sales, profits have scarcely budged. In the world of posh furniture, Linley is seeing his profit margins squeezed.

Sales for the 15 months to the end of last year were just over £3.5 million, up by £927,000 -

more than a quarter - compared with the previous year. But pretax profits remained virtually static at £174,000. After interest and tax, profits were just £10,994.

The wage bill for his 42 staff stood at £1.7 million, with the highest paid director - presumably Linley - earning £117,900 over the 15 months. A £500,000 injection from EMI record boss Alain Levy failed to end the problems.

Last year, the multi-millionaire Frenchman, who has a seat on the board, took a five% stake in the business, which has assets of £2 million. The cash injection helped Linley clear some of his bank debts, which fell from £1.6 million to £1.3 million.

Linley once confessed that his overriding motivation in life was money and he said: 'The furniture company makes a little money. Not enough. I'd like to be richer.'

Though the business has been going for nearly 20 years, it has only recently begun to turn a profit. Apart from his shop in London, Linley has outlets in Ireland and through Neiman Marcus stores across the United States.

Most of Linley's output is made to order, including ornate one-off designs costing as much as £250,000.

At present, the exclusive ambiance of Linley's store is jolted by banners that flutter outside and proclaim 'Sale - 40% off'.

Inside, there are bargains to be had . A table with tapered legs has been reduced from £6,600 to a mere £3,960, while chunky cigar holders are selling for just £50, down from £160. The sale is a visible reminder that selling beautiful but expensive furniture is no easy business.

Linley was out of the country last week, but a statement from the company to Financial Mail read: 'The last 15 months has seen Linley invest in the expansion of the business by broadening its product range and increasing the resources it devotes to new products and marketing communications.

'This resulted in net profit before tax for the 15 months of £45,571, representing year-on-year net profit growth (2001 vs 2000) of six%.'

Despite being born into the Royal Family, Linley has won respect for striving to be down-to-earth. His parents, Princess Margaret and Lord Snowdon, tried to give him and sister Lady Sarah Chatto as normal an upbringing as possible, remarking: 'They're not royal, they just happen to have the Queen as their aunt.'

Linley was keen to establish an independent career. After Bedales school in Hampshire, he studied carpentry before opening his own workshop and starting Linley.

He has a reputation for being careful with money. After Princess Margaret died in February, he and Lady Sarah each inherited about half his mother's £7.6 million estate.

He sold her Rolls-Royce Silver Wraith for £20,000 to a car dealer, surprising observers because it was so soon after the princess's death. It is not the first time that Linley has been seen as being insensitive to his mother. Margaret gave her son and his wife Serena, daughter of Lord Petersham and heiress to a £200 million fortune, her Caribbean holiday home.

The gift was to avoid death duties and the Princess hoped that the Linleys would derive as much pleasure from the house as she had. But Linley sold it for £1.5 million. She was said to be heartbroken.

Now houses are causing the Linleys more heartache. The couple and their son Charles, 3, and baby daughter Margarita are to leave Margaret's grace-and-favour apartment in Kensington Palace where they lived rent-free for two years. They have found a four-storey house in Paddington, west London.

Linley is parsimonious in his private life, but it now looks as if his company is also in need of some careful control of the purse strings.

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