Eddie Davies, who has died at the age of 72, was a resolute and imaginative businessman who made his mark in three seemingly separate areas: electronics, football and cultural institutions linked to science and technology.
In electronics Davies will be remembered for his key role in building up the Isle of Man-based Strix from a fledgling business in a niche technical area into a world leader. Davies is pictured here with the steel magnate Lakshmi Mittal and Peter Marsh.
In football he was instrumental in turning the illustrious Bolton Wanderers Football Club into a key force in the English Premier league, arresting several years of decline. In the arts and sciences, Davies’s support through generous gifts was immensely important to organisations such as the V&A Museum in London and Kew Gardens. He is pictured below at a Bolton match.
Strix is a British success story. It has used specialised knowhow in metals technology to become the world leader in the quirky yet important field of kettle thermostats, devices that cut off power when electric kettles boil and stop the devices becoming a safety hazard.
The company’s key invention is a modification of a technical device used in the 18th century by British craftsmen to make clock springs, later used during World War Two to create electric thermostats to stop flying suits overheating. Thanks in large part to Davies’s acumen, these odd beginnings were fashioned into the base for a global business. Like many mid-sized engineering companies in Britain, Strix is a “hidden champion” in a product field so narrow and specialised that it’s ignored by the multinational giants.
In the 1970s kettles were predominantly employed in the English-speaking world for making tea. Today the items are just as likely to be used – in places such as China and Russia – for boiling water for soup or coffee. Every day it is estimated that 1bn people turn on kettles containing Strix’s control devices.
1bn people a day are said to use a kettle containing a Strix control.
After just over 20 years running the company, Davies sold his controlling stake in Strix in 2005, netting more than £100m. Selling out to a private equity owner was the first step to transforming Strix from what was essentially a family company to what is now a business quoted on London’s AIM stock exchange . Strix has a market capitalisation of some £300m and more than 800 employees.
The company continues to operate in much the same way as under Davies’ stewardship. It keeps its HQ, key factory for precision engineering and main R&D operations in the British Isles (on the Isle of Man). It has a determinedly global approach. Like many companies in electronics Strix uses China for the bulk of its manufacturing. Strix’s main plant is in the southern city of Guangzhou, which opened in 1997. According to a 2018 brokers’ report: “Strix should enjoy steady top line expansion. The company demonstrates product superiority and integrity in what appears a growth market. Strix’s leading [approximately] 38 per cent global market share tends to confirm product superiority while we identify ample scope for the market to grow.”
Many of the kettle makers that Strix sells to are Chinese
Davies was generous to me as a journalist in giving insights and opinions on what was going on in both football and business. He had a courteous (often reserved) manner though could be fiery on occasions when something annoyed him, for instance referring decisions in soccer matches that he disagreed with. Davies wasn’t given to flamboyant gestures. He did nothing to make himself appear a public figure, using words sparingly in most conversations and generally avoiding media interviews. This policy ensured for many years he barely figured in newspaper articles (apart from some pieces in the Financial Times mainly written by me).
I first met Davies in the early 2000s when after much effort I went to the Isle of Man to see him as the head of Strix. Working at the FT I’d heard about Strix. It seemed an intriguing company. But Strix was notoriously private and difficult to find out about. Luckily Davies opened doors. On the Isle of Man trip I met some fascinating characters and learned some aspects to how the company worked.
Strix’s controls have revolutionised the kettle industry
Strix had been set up in 1982 on the Isle of Man by John Taylor, who while a skilled inventor lacked the management capabilities needed to run an expanding company. Taylor’s father, Eric, was another clever technician with a bent for innovation. He had set up an earlier electric controls company – Otter Controls, which continues to operate from Buxton, Derbyshire – from which Strix later separated triggering a family row. In 1984 John Taylor recruited Davies – an engineer who knew about business – as chief executive. Taylor stepped aside to become the company’s chief scientist.
Davies always said he was grateful to the education he’d had that combined – highly unusually – a lot of technical insights into both physics and accountancy. Davies said of himself: “I’m an engineer who can read balance sheet “. This combination served him well over the time when he and Taylor in tandem built up Strix’s business.
When running Strix, Davies said the model for Strix’s growth was the US’s Intel – the world’s biggest maker of microchips. While kettles are less glamorous than semiconductors, Strix has attempted to emulate the Californian company’s approach to protecting its technical secrets and branding. “The comparison with Intel is appropriate, as many of our customers in the developing markets often put stickers on their packaging saying that there are Strix controls inside [to differentiate themselves from others using competing or counterfeit controls],” Davies told me in 2004. Strix’s gross margins at the time were 40-50 per cent, very high for an engineering business and only just below those of the US giant. A company’s gross profit is its sales, minus costs of production, excluding overheads and research and development expenses.
Strix aims to move increasingly into coffee makers, reducing the focus on tea drinkers
Helped by Davies, I went to see the company’s small factory in Ramsey, Isle of Man, where the “blades” for Strix’s kettle thermostats are made in a secret process. I pieced together details of the high-tech bi- and tri-metallic strips contained in these blades. They are made using home-produced machines using procedures almost impossible to write into an engineering manual and tantamount to a black art. The company continues to operate in Ramsey, having resisted the temptation to switch this key element of its production to its main Guangzhou plant. It seems that Strix follows still the philosophy laid down by Davies: “We make the blades … on the Isle of Man and then ship them to China. We would never produce them in China because the risk of competitors finding out about the technology would be too great.”
In a series of later emails Davies explained that the key to the thermostats is a sudden “snapping ” action linked to the blades’ reaction to heat. This action causes the thermostats to behave as an electric switch, so shutting off power once the kettle has boiled. According to Davies, if the muscles of a human body were to emulate the capabilities of a Strix blade, the average person would be able to lift a 100-tonne truck. This graphic description made its way into The New Industrial Revolution: Consumers, Globalisation and the End of Mass Production, a book I wrote about global industry that was published in 2012. Davies was among the guests at the Royal Academy of Engineering reception to mark the publication. He is pictured below with John Incledeon (centre), Lakshmi Mittal and Peter Marsh.
After visiting the Isle of Man, and after I’d also seen Strix’s plant in China, during a trip 2004, Davies and I struck up a good relationship. We used to meet regularly in London for lunch or dinner. While Davies favoured the Savoy Grill, I reciprocated by taking him, on FT expenses, to pleasant but less grand establishments. Davies invited my son Jonny and I to see many Arsenal v Bolton matches in the years from around 2005 when Bolton were riding high in the Premiership. At these matches, I also got to know Davies’s wife Sue – every bit as keen a Bolton fan as Davies, and in her private life a notable horse breeder. Davies – who was born near Bolton – had taken over ownership of the club in 2003 having already been a director. During the time I was watching Bolton I grew to admire the team’s battling style and refusal to buckle. Phil Gartside was the chairman and made all the public statements about the club – something he seemed fond of doing. Sam Allardyce was the shrewd and highly successful manager who had the great ability to get the best out of the players. Davies was the behind the scenes man who provided a lot of the advice and ideas – plus a considerable sum of money – to keep the club at a high level in a tough league.
Between 2004 and 2007, when Allardyce left, Bolton finished in 8th, 6th,8th and 7th positions in the Premiership, which was very creditable for a little fancied club with relatively slim resources (although with a fantastic history). During the 13 years to 2016 when Davies owned the club, Bolton could afford, thanks to his largesse, star players including Youri Djorkaeff, Jay Jay Okocha, Nicolas Anelka (pictured below) and Fernando Hierro. Referring in a typically wry way to Bolton’s stellar league ranking, Davies once said to me, at a time when the team was doing particularly well, “We’re suffering nosebleeds up here!” Bolton’s run of success ended, however, in 2012 when the club was relegated to the second-tier Championship league.
When Davies eventually passed on the club to new owners, he wrote off personal loans of around £175m. The sales process was fraught with problems. Davies wanted to find a group of owners who would look after the club’s long-term interests. In the end he transferred the club (essentially for a negative sum) to a consortium headed by ex-player Dean Holdsworth which he thought had the right ingredients. Davies told me after completion: “What a relief. At least I can sleep nights now!”But a few months later, Bolton suffered a further blow, going down another tier to League One, though bouncing back into the Championship a year later. The Bolton Wanderers’ Supporters Trust said after his death: “Davies was BWFC through and through and he was pivotal to the success of our club in recent times.” One fan told the Bolton News: “Under Davies’s ownership we saw the best time to be a Bolton fan. May he rest in peace.” Davies is survived by Sue and a son and daughter.
The last text I got from Davies was in May 2018 after a dramatic 3-2 win over Notts Forest enabled Bolton to stave off at the last minute yet another relegation and remain in the Championship. After I’d sent a text seconds after the final whistle congratulating Bolton on this escape, Davies replied, in a terse, Davies-like way that summed up the situation perfectly: “Bloody fantastic finish.”
Davies had a bloody fantastic life for which he will be long remembered.