Already a Bloomberg.com user?
Sign in with the same account.
SKIBO CASTLE: WHERE THE NETWORKING IS AS GOOD AS THE GOLF
Peter de Savary has revived steel baron Andrew Carnegie's castle as an elite retreat
It's 7:59 a.m. at Skibo Castle in northern Scotland, and Thomas J. Usher, chief executive of U.S. Steel Corp., is asleep in Andrew Carnegie's four-poster bed. In another minute, he is roused by a bagpiper circling the estate--a wake-up call established by Carnegie in 1898. Usher bathes in Carnegie's tub, sits at his desk, and pens a letter to Pittsburgh about a problem at a mill. "It was fascinating to think almost 100 years ago Andrew Carnegie sat right here and did the same thing," Usher says. "I was Walter Mitty-ing it."
Usher isn't the only top executive indulging his imagination at Skibo Castle. Since British entrepreneur Peter de Savary opened an exclusive, invitation-only club at Carnegie's former estate in mid-1995, hundreds of A-list executives, celebrities, and politicians--Louis V. Gerstner Jr., Charles R. Schwab, George R. Roberts of buyout firm Kohlberg Kravis Roberts & Co., and telecom tycoon Philip Anschutz among them--have come to fish, play golf, and dine at the huge table where Mark Twain, Rudyard Kipling, and Teddy Roosevelt once supped.
Most guests claim they come to get away from it all, but Skibo has quickly gained a reputation among the corporate elite as a place where the networking is as good as the golf. "It brings out a camaraderie that is very hard to explain," says William Schreyer, chairman emeritus of Merrill Lynch & Co. Pamela Cavenagh, managing director of the German couturier Escada, has proof: She is negotiating to market accessories with Land Rover as a result of her visit. "Everybody's guard is down," she says. "It makes for quite a dealmaking atmosphere."
HOUSE PARTIES. That's just what de Savary, 53, had in mind when he bought the 7,500 acres in 1990 for $10 million. Forlorn and remote, 600 miles north of London, Skibo Castle seemed an unlikely setting for a luxury hotel. But de Savary, who has won and lost spectacularly in past real estate and oil deals, saw a brilliant marketing opportunity: push back the clock 100 years and revive Carnegie's house parties for tycoons and celebs. And for good measure, he encourages them to give to charity--just as Carnegie did.
Membership to the club costs $5,000 annually--on top of $700 a night for a room for two. For that, visitors can stroll the moors or sit at the desk where Carnegie wrote his philanthropic tome, The Gospel of Wealth, one of hundreds of books in the cavernous library. On one recent wintry night, three dozen strangers laughed like old friends at cocktail hour. As James, the butler, circled with a silver tray, Alan, the jester, cracked jokes. Graham Puttergill, CEO of HSBC Gibbs, Hong Kong National Bank's insurance arm, smiled while David Clapp, a Goldman, Sachs & Co. partner, puffed a pre-Castro cigar and regaled George Brown, a Ritz Carlton co-founder, with a story about a recent hunting trip.
Skibo is the cornerstone of de Savary's privately owned Carnegie Club, an expanding worldwide network of upper-crust getaways. He has three in Europe and plans to open a fourth in the U.S. next year if he wins rezoning on a landmark mansion in Newport, R.I. This year, de Savary says, Skibo will pull in $9 million--well above the $6 million it costs to run the place.
The Carnegie Club is just the latest venture in de Savary's long and remarkably volatile career. A native of Essex, England, he got his start in business after dropping out of high school and going to work for his father, a furniture maker. But early on, he moved to the Far East and embarked on a string of ventures investing in real estate and oil. With backing from wealthy Arab contacts, he eventually set up a bank in the Caribbean to finance his own and other deals. By 1983, de Savary was rich enough to underwrite Britain's $8 million tilt at the America's Cup.
He lost the yacht race but kept the headlines with projects such as St. James's Club, a chain of exclusive hotels he developed in Paris, Antigua, London, and Los Angeles and sold in the late '80s. In 1988, de Savary also sold a chain of casinos and snooker halls, called LandLeisure, for about $300 million--pocketing a profit of $50 million, he says. The acquirer, Leisure Investments, sold it a year later for less than $150 million. De Savary says the company failed to secure a gaming permit, which was not transferable.
IN LIMBO. By the time he bought Skibo in 1990, business associates estimate de Savary's net worth was about $150 million. But in 1994, halfway through the castle's $30 million renovation, his heavily leveraged real estate empire collapsed. Left in limbo were projects in France, Britain, the Caribbean, and New York, where he'd planned a condo complex for an entire city block. By his own account, de Savary lost more than $100 million.
Thanks to government loans and a hefty investment from Nomura Securities Co. Chairman Max Chapman, however, de Savary was able to hold on to Skibo. "It was an unusual project that I wanted to be a part of," Chapman says. "Peter is a classic entrepreneur. He has 10 ideas a week--including a lot of crazy ones."
Skibo, at first, seemed one of the looniest. Originally the site of a 10th century Viking stronghold, Carnegie rebuilt the castle and threw a perpetual party until just before he died in 1919. His only daughter, Margaret, lived there until 1981. But by the late 1980s, it was so run-down that the receivers of the Carnegie estate were ready to turn it into a prison or mental ward. When de Savary arrived in 1990, there were holes in the roof and the golf course was so overgrown it was indistinguishable from the surrounding moors. Still, says de Savary: "I knew I'd end up owning it."
De Savary tracked down Carnegie's belongings and hired 130 staffers, insisting they call him "PdS" or "Mr. de Savary." A stern taskmaster, de Savary was slapped with a $5,000 government fine for "intimidating" a Skibo cook. "He was slacking off," de Savary recalls.
De Savary's timing on the venture was perfect, as record wealth flooding from Wall Street helped rekindle curiosity about Carnegie. Once the world's richest man, he gave away $4 billion (in current dollars) to build 3,000 libraries and fund education. Now, with modern tycoons such as Bill Gates and Ted Turner making big donations, "everybody's vying to be the next Andrew Carnegie," says Avery Russell of Carnegie Corp., the $1.4 billion fund the steel baron established.
CACHET. To sign up members, de Savary counts on cachet and word of mouth. He also distributes elaborate 30-page books on why Carnegie called Skibo "heaven on earth." And he gets the word out with high-profile events such as Shell Oil Co.'s golf championship last year between Fred Couples and Greg Norman--a Carnegie Club member.
Indeed, golf may be as much a draw as the Carnegie aura. After Andrew Harper's Hideaway Report, a highly regarded travel newsletter, called Skibo the world's "consummate private golf sanctuary," for example, Merrill Lynch's Schreyer returned with friends from Monsanto, Deere, and Schering-Plough in tow.
Once night falls, though, the spirit of Carnegie reigns. After the court jester reads his "Ode to Haggis"--saluting the Scottish dish of stuffed sheep's stomach--the bagpiper leads everyone to the long dining room table for "neeps" (turnips), "tatties" (potatoes), and salmon from local waters. But first, de Savary has a toast: "To Andrew," he declares. A proper nod from a man whose future rests in keeping Andrew Carnegie's memory alive.By I. Jeanne Dugan in Dornoch, ScotlandReturn to top