Sir Hugh's Addiction

He could frequently be seen in the casinos of London and Monte Carlo, always at the roulette wheel and usually on a massive losing streak. At one time. Sir Hugh Fraser, at 40 one of Britain's more powerful businessmen, played back-to-back tables at Ladbroke's and lost the equivalent of half a million dollars in a single evening. To cover his losses, Fraser has been forced into selling an estimated $2.4 million worth of stock in Scottish & Universal Investments Ltd., an associate company of the House of Fraser Ltd., which owns Harrods and more than 100 other department stores throughout the British Isles.

Though he has not been formally charged with lawbreaking, Fraser's conduct has been called into question by authorities for the City, London's financial center. In a scolding report, the London Stock Exchange accused Fraser of "lack of judgment" and "inefficiency and ignorance of financial matters" in his running of the company, but at the same time it cleared him of attempting to use privileged information for personal gain. Still, a group of big investors is applying pressure to have Fraser removed as chairman, and the British Department of Trade is about to begin an investigation of its own.

Sir Hugh still has his backers, including Carter Hawley Hale Stores, Inc., which invested $68 million in the House of Fraser two years ago in exchange for a 20% interest; the company also owns Neiman-Marcus in Dallas and Bergdorf Goodman of New York. From his Los Angeles office last week, Chairman Edward W. Carter said he felt "very sorry" about Fraser's personal problems but believed they had not harmed the business. Said he: "Fraser runs the company, and he does it well."

Bloody Fool. "I think I've been a bloody fool," admits Sir Hugh. He described the stock exchange report as fair and vowed to swear off roulette. But he has fought to stay on the company's board by threatening to put his 36% stock ownership up for sale if shareholders move against him. At parties, Fraser appears to be making a joke of the whole affair. He sang and danced two weeks ago at a gathering near his Scotland home in Drymen, Stirlingshire, and led guests in choruses of The Man Who Broke the Bank at Monte Carlo.

An unpompous, handsome, likable Scot, Fraser seemed to have everything going for him a decade ago. He had just taken over the family's thriving retailing business after the death of his father, Lord Fraser of Allander, founder of the House of Fraser and a legendary British merchant. In 30 years, Lord Fraser had built his business from a draper's shop to an empire with sales of about $275 million annually. Sir Hugh moved vigorously into his father's shoes, increasing sales to $500 million in six years and ridding Harrods of some of its crustiness. In addition, he built Scottish & Universal Investments, at one time only a holding company for the House of Fraser, into a diverse trading organization with interests in publishing, whisky, engineering and textiles.

Sir Hugh's first marriage, to a Canadian socialite, ended in 1971 after nine years and three children. Fraser married again, but that union too ended in divorce. He began spending more time at roulette wheels. His endurance, if not his luck, was admirable. He frequently would gamble until 4 a.m., then return exhausted to his suite at Inn on the Park in London.

Why he lost so heavily at roulette--his favorite number was 32--puzzled his friends. They believed his skill as a risk-taking businessman would have told him when to quit. Says an old Ladbroke's hand: "We could never understand how a man so clever in business could be so stupid as to sit there all night throwing money away." One friend blamed Sir Hugh's failed marriages for causing a "glandular imbalance" that impaired his gambler's instinct and made him stay far too long at the wheels. He certainly did not learn from his father, who also enjoyed gambling. Says Sir Hugh: "The great difference between my father and me was that he knew when to stop."

Sir Hugh has a record of flirting with danger, he has admitted he "likes to be frightened" and proves it by driving at 100 m.p.h. from Glasgow to Monte Carlo ("to see how fast I could get there") and racing horses with Liberal M.P. Clement Freud. Whatever the reason, Sir Hugh's recklessness has cost him more than money: the damage to his name could be permanent.

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