Moving on: Fashion designer Karen Millen
Fashion guru Karen Millen is working hard to rebuild her finances after losing her £40 million fortune from the sale of her business to bankruptcy.
The 61-year-old tells Donna Ferguson how in 2017, after years of court battles and financial bad luck, she lost all her wealth and family home.
She has three adult children and now rents a cottage in Kent. Her latest collection, The Founder at Karen Millen, launched in May.
What did your parents teach you about money?
To work hard for it. I’m one of four children and was brought up in a working-class home where money was pretty tight. My mum was a secretary in the civil service and my dad was a technician who laid floors and carpets.
While I respected their hard work, I knew I wanted better. We lived in a council house in Maidstone in Kent and it was a struggle at times. We didn’t have any luxuries, it was all about putting food on the table.
My father had to retire young from ill health and he was unwell a lot while I was growing up. I remember feeling this hunger to be independent. From the age of 14, I did paper rounds and egg rounds and fruit picking – anything to get a bit of pocket money.
Was there a time in your life when you were paid silly money?
Some would say I was paid silly money when I sold my company in 2004 but it was the price offered at the time. I got about £40-odd million myself and my ex [Kevin Stanford] and business partner, got the same.
It did feel like a crazy amount. Never in my wildest dreams would I have thought we would ever achieve such success and that kind of wealth.
Of course, it felt amazing. But it came at a time when, personally, things were quite difficult. My relationship with Kevin had come to an end, my career had come to an end and selling my business felt like giving my baby away. I wanted to celebrate, but deep down, I was hurting and felt very sad. I had nothing to get up and do anymore, and nothing to work for. I would wake up and think: What now?
How did it feel to have £40 million in the bank?
My world had changed so much – overnight, almost – and I was pretty exhausted, as well as being emotionally and creatively drained. I’m sure I did celebrate, but there was a feeling of how do I deal with having all this money suddenly?
I was never great with money; I had always relied on my partner to run that side of things. I was a little bit naive about everything, despite being in my early 40s, and felt quite alone. Looking back, I was probably a little bit too scared to ask for advice. People see you as being so successful that you know everything – and you’re too scared to say, actually, I don’t. I don’t understand what I’m supposed to do or how I should be, now. So it was a very difficult time in many ways.
What is your biggest money mistake?
Not taking my wealth into my own hands. I trusted others I felt were better qualified to take care of it. I didn’t get the right advice. Whether it was investments, putting money into offshore accounts, whatever it was, I wish I’d looked into it a little more and taken more responsibility. All of those decisions have cost me. From the time of the financial crash in 2008, there were issues going on with trying to hold on to everything. My time was taken up with negativity, battles and lawyers.
When I think about the money I spent on legal fees! It was a hole that just seemed to get bigger. And it gave me little time to feel good about myself until I could put it all behind me.
I went bankrupt in 2017. Deciding to lie down and let it happen to me was the only way I could move on. I’ve never actually added up everything I lost. But I can say that I lost everything that I received from selling my business. I ended up with nothing, except my pension – and that has been my saving grace.
Have you ever struggled to make ends meet?
Since things went wrong for me, had it not been for my partner Ben, I would have found it very hard to make ends meet. But fortunately, he’s been there to support me and put a roof over my head.
Adjusting was not only difficult for me but for my three children. Luckily they had left school by then, but we lost our family home – and, unlike me, my children had grown up knowing no other lifestyle.
We went on beautiful holidays and had all the trappings wealth brings. You get used to luxuries. I would fly on private jets from time to time and drive very nice cars. Thankfully, my children were courageous and very supportive. We’ve come through it stronger.
Tie-up: Karen Millen sold the retail chain that still bears her name in 2004 but now has a new collection called The Founder
What’s the most expensive thing you bought for fun?
A Porsche Carrera GT, quite soon after we sold the company. I paid about £250,000 and was told it would increase in value. I hated that car, which was a left-hand drive. I’m short, and couldn’t reach the pedals without sitting on a cushion. I sold it after a couple of months. I’ve been told it would be worth £1.5 million now.
The best money decision you have made?
Resolving to move forward with a clean slate. There’s nothing I can do to change the past. I’ve got to look to the future and learn from my past mistakes.
It’s taken me a while to pick up the pieces but I’ve got up, dusted myself off and I’m going again. Now, I believe my wealth is in what I can create and what I can do. So I’m doing a collection with my old company, Karen Millen, which launched earlier this year, called The Founder. Doing that, I feel energised. I’m doing something I love, but I don’t have the headache of running the company.
Do you save into a pension?
Not any more, as I’m almost 62. Pensions are excluded from a bankrupt’s estate. Mine’s not huge, but it’s been a godsend. I have taken part of it as a tax-free lump sum.
I remember thinking, when I was saving into it, that it was irrelevant. Now, I’m pleased I did it. I look at the state pension and think: how do people cope on that? It’s really important to have a private pension. I wish I’d put more in, in hindsight. However, I’m fit and healthy so I’d like to think I can work for at least another ten years.
Do you invest directly in the stock market?
No. I don’t understand it. When I had money to invest, other people did it for me. And I didn’t have great experiences.
Do you own property?
No. I’ve been renting a cottage in a little hamlet in Kent for the past five years. It was difficult for me to get a mortgage as a bankrupt older woman, and my partner lives overseas. I see renting as a complete waste of money. Coming from a big house was quite challenging and for a long time I lived out of boxes. After a while, I realised I didn’t need half of what I owned. I’d like to buy a home again. A home, for me, is one of the most important things to have and enjoy.
- Karen Millen is the co-founder of Teens Unite, a charity that supports teenagers and young adults up to 24 through their cancer journey. Visit teensunite.org/ to donate.
