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White Goods

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Bolton businessman makes £86m in a DAY: 'Kitchen king' who left school with no qualifications is now worth £550m after floating his white goods website
  • Former kitchen salesman John Roberts, 40, is founder of AO.com
  • The married father of five left school without any qualifications
  • Company supplies white goods directly to its customers
  • He set up company after £1 pub bet on Christmas Eve 14 years ago
  • AO.com website has cornered 24 per cent of the UK white goods market

By Jill Reilly

PUBLISHED: 11:03, 27 February 2014 | UPDATED: 13:28, 27 February 2014

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John Robert, a Bolton businessman has made £86million in a day after selling off part of his 'white goods' website

A Bolton businessman whose friend bet him £1 to start his own business has made £86million in a day after selling off part of his 'white goods' website.

Former kitchen salesman John Roberts, 40, founder of online appliance retailer AO.com, set up the company after realising that the long supply chain for ‘white goods’ such as dishwashers and fridges was adding needless costs.

This week AO.com smashed expectations for its stock market debut with a 33 per cent rise that increased Mr Roberts' worth by £113million in less than nine hours of trading.

Mr Roberts banked £86million by selling shares in the run-up to the listing.

And with holding company AO World's shares rising from the float price of 285p to 378p, his remaining 28.6 per cent stake increased in value by £113million to £456million by the end of the day.

The married father of five, who left school without qualifications, started the company 14 years ago when he was in charge of appliance sales for Moben Kitchens.

'Like all the best businesses, it started in the pub. It was Christmas Eve and I was having a drink with Alan Latchford, who is the L of [Ao.com parent firm] DRL. He bet me a pound I wouldn’t do it,' he told Retail Week. 

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Success story: AO.com smashed expectations for its stock market debut with a 33 per cent rise that increased the worth of Mr Roberts by £113million in less than nine hours of trading

 

Mr Roberts said he had not heard of the internet when he set up the business, but he used all his product knowledge to put together a database, and Mr Latchford - who had internet experience - built the website.

 

He used his credit card to buy the appliancesonline.co.uk domain for £300 and raised £100,000 from family and friends - an investment that has since seen him corner 24 per cent of the UK white goods market

His success has seen him dubbed the ‘kitchen king’, but Mr Roberts told Retail Week the nickname 'sounds a bit conceited.'

 
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A recent AO television advert. Mr Roberts also says the key to his success is the company's customer service and his approach towards his staff

 

DOTCOM BUBBLE: BOOM AND BURST

The rise of internet sites and the tech industry in general, created a bubble which is generally defined as the period of investment and speculation in Internet firms that occurred between 1995 and 2001.

A major growth in internet users during this time led to many Internet start-ups being born in the mid to late 1990s.

Many of these companies engaged in unusual and daring business practices with the hopes of dominating the market as well as engaging in a policy of growth over profit.

At the peak of the dot-com bubble in 1999, it was said that a new millionaire was created every 60 seconds in Silicon Valley.

But many argue that the dotcom boom and bust was a case of too much too fast.

On 10 March 2000, the Nasdaq index of leading technology shares spiked, bursting the Dotcom bubble.

Investors soon realised that the dot-com dream had devolved into a classic speculative bubble.

They were left counting their losses as panic selling ensued as the stock market’s value plunged.

Companies such as Boo.com, Clickmango.com, Ready2Shop.com, Pets.com went from being leaders of a revolution to the losers.

Survivors such as Lastminute.com, were left desperately trying to stay afloat.

'I wasn’t very academic at school - I left without any real qualifications and went to work in the warehouse of a local kitchen distributor. That’s what got me into this industry,' he said

AO, which considers John Lewis as its main rival, first partnered with Sainsbury’s and then Boots, Next and B&Q.

But when Sainsbury's ditched AO in favour of Comet in 2009, Mr Roberts says his business really took off because it then focused more on direct retail to customers.

 

The company grew in popularity by undercutting the big high street retailers like Comet and providing services such as same-day delivery.

Mr Roberts also says the key to his success is the company's customer service and his approach towards his staff.

'The rules of the game have changed but the same old-fashioned principles still hold. Good old customer service is still key,' he says.

He says every customer which comments on AO's Facebook page gets a hand-signed letter from him.

AO now has 1,000 employees who receive gym membership for only £2 a month and get free chocolates and crisps - Mr Roberts claims he spent £50,000 on crisps last year. 

The share price rise means his personal fortune increased by nearly £3,700 for every second of share trading.

AO raised a total of £423m, initially valuing the company at £1.2billion, but the rise in its share price meant it ended the day worth £1.6billion, nearly as much as rival Dixons.

The company plans to use £60million of the cash raised in the float to expand in Europe, starting in Germany.

The remaining £363million of the £423million raised went to existing shareholders who sold up, other senior staff and early-stage ‘angel’ investors.

City sources said the float was oversubscribed, amid support for new market offerings. 

The share price drew comparisons with the enthusiasm surrounding the dotcom floatations in the late 1990s.

McColl’s store chain started the retail float race by raising £133million.

Pets At Home, Poundland, Card Factory and House of Fraser are on course for listings this year.

 

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swear wen these storees come it just makes you feel a type a way

 

ffs

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Got my washing machine and freezer from these dudes.

Their site us good - it's built to allow you to filter on appliance specific features, and to compare them. Their fitting is also cheap.

I think they make a lot of money by selling those bullshit extended warranties. Had someone phone me twice after I bought trying to get me go buy one

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Got a tumble dryer from there before they changed the company name and yeah some northern dude was bugging me to get the cover.

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