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SIR LAWRIE TRIES IT AGAIN : But This Time, the Briton Is Out to Lure Upscale Home Buyers Instead of Concentrating on Southern California's First-Timers

November 22, 1987|MICHAEL FLAGG | Times Staff Writer

It's dark, and it's late, and Sir Lawrie Barratt--knighted in 1981 at the recommendation of British Prime Minister Margaret Thatcher--has just finished dealing with that most mundane and irksome of Southern California problems: freeway traffic.

Clogged, snarled, creeping freeway traffic, to be specific; traffic slowed still further by a fog creeping in over Laguna Niguel from the Pacific.

Up on Niguel Summit, however, a two-story arch of pink, red and white balloons sways in a chilly breeze at the entrance to Sir Lawrie's new subdivision, Belle Maison, and a violinist plays to the guests arriving in long white limousines for a private preview.

Farther up the hill, the tinkle of a piano drifts from under a plastic tent, where the tables are laid for 500 dinner guests. In black tie, sipping a gin and tonic, Sir Lawrie strolls through the crush of local movers and shakers around the bar.

It is a long way from Newcastle-upon-Tyne, the gritty English city where Lawrie Barratt, now 60, built his first home in the early 1950s. Barratt Development PLC is now the largest British home builder and at one time built an astonishing 14% of all new homes constructed in Britain.

But Barratt's Irvine-based U.S. subsidiary has not performed up to expectations since opening in 1981, so the big plans Barratt once had for the U.S. market have been shelved.

Barratt's problems haven't scared off other foreign home builders from the Southern California market, including three other British builders and the French company Premier, which set up shop just recently. The Japanese also dabbled in the market in the early 1980s, according to the Building Industry Assn. of Orange County, but have since gone home.

In the last year, the company has tried a new tack to make Barratt American more profitable, a strategy that can be seen plainly in the two-story houses across the street from Barratt's cocktail party. When completed, they will sell for $325,000 to $450,000, and they are by far the biggest and most expensive homes Barratt has ever built in the United States.

Barratt began in Southern California by building tiny 400-square-foot condominiums that cost $50,000. Seven of them would fit in the smallest house in Belle Maison.

At one time in the early 1980s, Barratt sold condos from models set up in local Sears stores. The company's ads said: "You'll find your new home between the lawn mowers and lingerie."

Sears even sold a line of diminutive furniture and appliances to go with the condos.

Few U.S. builders had ever gone after first-time home buyers so aggressively or in such a mass-market way as Barratt. The company also built inexpensive single-family homes, though the small condos got most of the publicity. At one point, according to the company's own publicity, a customer could buy one of the mini-condos in Simi Valley, Sunnymead or Fremont for as little as $52 a week, or less than some customers' car payments.

Barratt, however, widely overestimated demand for the units in Southern California, real estate experts say. Potential buyers wound up staying in their more spacious apartments rather than plunking down their money for a Barratt condo.

"Americans, and Californians especially, have a much more optimistic outlook on life than the English," said a real estate consultant familiar with Barratt. "And one of the things they're most optimistic about is achieving a single-family, detached house.

"Barratt was frustrated in trying to sell a lot of those tiny little bandboxes."

The problems weren't just product related. Before long, the breezy Californians hired by Barratt began to clash with the more staid corporate culture of the British company.

The differences in style showed up in small things as well as large. Barratt American, for instance, refused to hire gardeners for its model homes and made its sales people mow the lawns. Some of the good ones were said to have walked out.

"I think there's nothing wrong with sales personnel doing everything possible on the site to keep the models in good condition," said Sir Lawrie. "I'd do the same thing myself if I walked in and saw something wrong."

Meanwhile, things weren't going that well back in Britain, either. In the summer of 1983, a TV program--a British show similar to "60 Minutes" called "World in Action"--alleged that Barratt's building materials were unsafe and some of the company's houses shoddily built. Before the flap had quieted down, the company had been dealt a crippling blow.

Here's what had happened: Barratt had been trying to introduce timber-frame construction--long used in the United States--to British home building, which has favored brick.

A later "World in Action" program reported that the values of the homes built by Barratt were falling, which one British stock analyst termed "a bit naughty, since it was their first television program that had caused the values to fall."

Barratt abandoned timber-frame construction in Britain and went back to masonry, but the damage was done.

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