Annabel Palmer talks to Tom Gearing, the Apprentice heartthrob who is transforming the wine investment industry
THE media storm that surrounded Tom Gearing, who charmed his way to second place in last year’s Apprentice, had started to quieten down. But with the new season now luring in viewers, fans of the show are starting to wonder: whatever happened to last year’s candidates? For Gearing, the answer is a 60 per cent increase in turnover for his company Cult Wines, a fine wine investment firm, and hundreds of new clients.
Gearing was raised with wine. By 11, he was travelling to Burgundy with his father and quaffing its finest vintages. Nonetheless, his plan had always been to work in financial markets. But like many others who graduated in 2009, he quickly realised that getting a job in finance would be almost impossible. Gearing was sitting on his hands. He could have obtained work experience, or done unpaid placements. His brother was working in wine at the time – handling a small number of clients who he managed privately. But Gearing had other plans. “I suggested setting up an office, taking on staff, building a rigid framework and drafting a business plan. I wanted to market these services to the public.”
He knew there was a gap in the market for a specialist wine investment company. At the time, investors could only gain exposure through traditional merchants, an option that would only appeal to wine enthusiasts. “The public wasn’t able to take advantage of the long-term appreciation in capital that wine affords.” And the wine market was changing dramatically. Market conditions had improved in the Far East. In Hong Kong, import duty had been reduced to 0 per cent. The Chinese market had become one of wine’s biggest consumers. “It was a good time to be looking to start a business in that industry.”
So he cajoled a few fellow Nottingham graduates into helping. He went to Natwest and agreed an overdraft facility of £20,000, which gave him enough to rent a small office and get the business off the ground. And two years later, the prize for winning BBC’s Apprentice changed to a £250,000 investment. Gearing had an idea to launch a wine fund, and thought the show offered a win-win scenario. “If I won, I would have the investment needed to launch the fund. If not – and I was perhaps a bit naive here – I would get good exposure and hopefully make a good show of myself.” It worked: Gearing is one of the few candidates who has successfully endeared themselves to the public. And although he didn’t win the top prize, the turnover figures show it was worth the risk.
Between filming two final scenes – one in which he wins, the other he doesn’t – and the show being aired was a four month period of meetings with Lord Sugar and his advisers. It wasn’t until a week before the programme previewed that he found out the result. In the interim, he assumed he hadn’t won, and focused on developing his business. He took on extra staff and diversified his sales team. “I shifted focus from private clients to developing the wholesale trade and export business. It is lower margin, but higher volume,” he says. And now he’s set his sights on retail wines.
His willingness to adapt and constantly come up with new ideas may explain why £20,000 has been all the investment his company has needed. “While the new fund would have required investment, after the show I was so focused on Cult Wines, and it was doing so well that I was happy to let the fund idea sit on the back-burner. Our overheads have always been small, so we didn’t need a significant initial injection of capital.” Three years down the line, the company had a turnover of £3m; all the capital necessary to scale up. The hardest times were during the first three months, he recalls. “I remember having panicked meetings with Natwest, convinced we wouldn’t make our repayments.”
So it hasn’t all been plain sailing. As an unregulated market, Gearing worries cowboy companies have tarnished its reputation. Cult Wines had two years where the turnover was static. But after all the hard work – making the decision to “make something for himself”, having to learn everything on the job (“I had no clue how Forex worked”), a dabble in stardom – Gearing is 100 per cent committed. He is now looking to open an office in Hong Kong, and is brimming with ideas to get the company to the level of the competitors he looks up to. But he has intentionally taken it slow and steady. “Don’t be afraid of keeping your business small,” he advises. “When you start a business, you will make plenty of mistakes. It is far better to do that when the damage is minimal.”
CV TOM GEARING
Company Name: Cult Wines
Job Title: Director
Number of staff: 10
Company Turnover: £6m (financial year: 2012/13)
Lives: South West London
Studied: History at the University of Nottingham
Drinking: Wine, obviously! I’ve had some very good moments with mature Pauillac this year
Eating: I enjoy fine dining and modern cuisine
Reading: The Big Short by Michael Lewis
Talents: Good mental arithmetic and playing sports
Motto: “Always keep striving to improve”
First ambition: To run my own company