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| ABOUT US |
| GROUP HISTORY |
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| 1900's |
The 1900’s – The beginning of Madeira Tourism
In the 1800’s, Madeira had become a popular destination for tourists and invalids, who were sent to winter in the warm climate. The beginnings of the tourist industry sprang up around these visitors who often stayed for six months or longer. In the 1880’s William Reid, already a well know hotelier on the island, began to build Reid’s Hotel, Madeira’s best-known hotel. On his death in 1887, his sons continued the project, and the hotel was opened in 1891. Designed by the same architect as Raffles in Singapore, Reid’s soon became the flagship hotel for the island, a byword for luxury.
Also during this period the Union Line and the Castle Line (later to be known as the Union Castle Steamship Company Ltd) started a regular service to South Africa calling in regularly to Madeira and Las Palmas. The early development of Tourism in Madeira was without doubt in large part due to this regular shipping service to which Blandy’s were associated for over 100 years.
Blandy’s Bank
In the late 1800’s a system developed whereby Blandy’s brass token was given to wine producers in lieu of payment. The tokens developed as a result of a chronic shortage of small change in circulation. When the producers had collected sufficient tokens to be worth exchanging, they presented them to Blandy’s where they were duly substituted by legal currency. Together with the travellers Bills of Exchange handled by the Shipping Agency, they together formed the basis on which Blandy’s Bank was founded. In 1923, a separate banking department was established. This part of the group was named Blandy Brothers (Banqueiros) Lda, and was sold to the Banco de Espirito Santo in 1966.
Meanwhile, in the Canary Island’s the business was growing under the stewardship of Charles Maurice Blandy, son of John Burden Blandy. Like Madeira, the Canary Islands were an important port of call, both for trade, passenger and naval vessels. As technology developed, Blandy’s established an engineering firm to supply the increased demand for mechanical goods. During this period Blandy’s Bank was also established in Las Palmas and eventually during the second world war it was sold to the Banco Espanol de Credito along with the ship repair yard. The early 1900’s also saw the first importation by Blandy’s of vehicles to the island, laying the foundations for the motor division which was sold in 2004/5.
The changes to the Madeira Wine Industry
In 1825 Madeira Wine reached exports of 10,000 pipes, a figure not to be reached again until 1916. This decline was partly due to the devastating effects of two vine plagues, the first of which, Oidium Tuckeri, hit the island in 1851. The second, Phylloxera, was first identified in Madeira in 1872. Together they decimated the viniculture of the island, and all the shippers saw their yields fall drastically. In response, various shippers merged to form Madeira Wine Association in 1913. The intention was to share overheads, whilst maintaining the individual house brands and styles. The Association became known as the “shipper’s graveyard” due to the difficulties faced by the industry. In 1925, Blandy’s joined the Association, which survived to become the Madeira Wine Company SA in 1986 by which time Blandy held over 90% of the Capital. In 1989 the Symington family known best for their investment in the Port Wine Trade bought a controlling interest in the Madeira Wine Company, adding the Madeira brands to their existing portfolio. This gave the company much need know how as well as world wide distribution and has proven to have been a correct decision over time.
Reid’s Hotel
By the 1930’s, Blandy’s Bank was of sufficient size to be providing considerable financial support to a number of local businesses. In 1925 Reid’s went bankrupt, the Reid family having overstretched themselves. The business re-emerged but in 1936 Reid’s Hotel ran into difficulties and applied to Blandy’s Bank for financing. The result was that, Blandy’s assumed full control of the hotel in 1937, marking the beginning of the Blandy Group’s involvement in the hotel industry. Shortly afterwards, between 1939 and 1949 the hotel was forced to close, due to World War II. In 1949 Reid’s reopened specifically to welcome Sir Winston and Lady Churchill, who occupied the same suite of rooms as had David Lloyd George twenty five years previously.
Other areas of activity
Blandy’s had taken a trade investment in the flour and milling industry in Madeira in the 1800’s. In 1942, the Madeirans revolted against the increase in the price of bread and flour, caused by the price controls imposed by the Salazar regime. This popular uprising became known as the “revolta da farinha” (flour revolt) and it was a result of this that the individual Madeiran millers decided to pool their resources and formed the Companhia Insular de Moinhos – or CIM.
The Lisbon office and the Portuguese Revolution
During the Salazar regime, all aspects of business life were centralised in Lisbon by the Portuguese government. It was therefore essential to have a presence in Lisbon, and in 1946 Blandy’s opened an office there.
In 1974 the Portuguese revolution shook the country. Up to this date, Portugal had had a protected economy, with a centralised control of industry, controlled foreign currency exchange, trade barriers, and government controlled trade unions. With the revolution, the old order was thrown out of government, the civil service and industry. The management boards of all the major companies were replaced, and all the banks were nationalised. The Blandy family decided to remain in Madeira until the situation became unsustainable, an occasion that never arose.
Following the revolution, businesses were now faced with previously unknown challenges in which their management had little or no experience; the devaluation of the Escudo, active trade unions, banking decisions made on political, not financial grounds, inflation running at 35% and a home market where there was virtually no consumer spending nor funds for investment. Although none of the Blandy Group’s businesses were nationalised, the Group faced a difficult time throughout this period. Perhaps the most painful consequence of the revolution was the forced closure of the Madeira Electronics Company, which at that time employed over 900 workers, mainly women, and was one of the largest employers on the island. In order to provide the necessary indemnification, the Group sold substantial property holdings.
In the 1970’s the circulation of the Diario de Noticias Madeira fell to approximately 7,000. Censorship of the press ceased as a result of the revolution. The country became highly politicised and it became evident that for a regional paper to be successful in Portugal, it had to provide free and unbiased reporting. It was this realisation that drove the Diario de Noticias Madeira to develop a new editorial and commercial strategy, laying the foundation for its current success.
The application for EU membership
At the time of the revolution, Madeira was granted the status of an autonomous region. Since that time it has been led by Dr Alberto Joao Jardim, a dynamic and sometimes controversial figure. The 1980’s saw the beginning of Portugal’s move towards joining the EU, a move that brought with it greater economical and political stability. It was against the background of a European future for Portugal that the Blandy Group began its program of identifying core business areas. At this juncture, the Group initiated the policy of forming partnerships with market leaders. That this has been successful is demonstrated by the partnerships with the Symington family in 1989 (MWC), Lusomundo (Diário de Notícias da Madeira) in 1994, and C&N/Thomas Cook (Porto Bay Hotels) in 2000.
Madeira Tourism in the 1980’s
By the 1980’s, tourism was once again a major growth industry in Portugal. In 1994 The Cliff Bay Hotel was opened, having been built on property owned by the group. The Cliff Bay turned out to be the beginning of the partnership that was to form the Porto Bay Group which today is one of the leading hotel group of Madeira and in which together with Ocean Islands, the two groups control 90% of the share capital. Reid’s was sold in 1996 to the Orient Express Group, and in 2000 the Porto Bay Group was formed. |
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