Gerald Ratner - The Rise, Fall and Rise Again

Given the majority of my book reviews have been the worlds’ leading tech companies or generational entrepreneurs, reading a book by Gerald Ratner a business man more famous for a speech in the 90s….. might seem like an odd choice.

However, there is often more to learn in failure, and rebuilding, than there is just hearing about the 0.1% of entrepreneurs who go on to be household names. Although for many Gerald Ratner will be a household name.

So perhaps it’s because I just took a public relations course with the incredible Abi Donald .., or it’s perhaps because the story of one man, in one speech, losing ￡500m has always stuck in my head!

I've also had my own personal PR nightmare. But that's perhaps one for another day. 20 years on it's still too raw.

For those that don’t know. And that’s probably everyone born post 1990 and not born in the UK. Gerald Ratner was the CEO of Ratner’s, a jewellery business that was on almost every high-street in the UK. It was founded by Gerald Ratner’s family, but it was Gerald that took it on and made a number of acquisitions and managed to create one of the few successful UK companies that have enter the United States and made a real success.

During the 1980s, Gerald was the man that could do no wrong, and as well as flying around in a helicopter, he was having lunch with Maggie Thatcher and telling her how to do business on the UK high-street. He was the epitome of 1980s capital market success.

Ratner’s basically owned the whole of the UK’s fast fashion jewellery market - wouldn’t of been called that then probably something like "budget jewellery". Both through their own branded stores, and stores like H Samuel and Ernest Jones which it took over during the 80's M&A boom. Ultimately, Ratner’s reputation was destroyed, it's shops all shut, and it was those brands that would go on to form Signet Jewelers, now the world's largest specialist jeweller, but not with Gerald at the helm.

So, what happened. Well, in 1991, at the top of his game Gerald Ratner had the mother of all PR disasters. He was talking at the Institute of Directors conference at the Albert Hall where there was a full house (including journalists), and during the speech, as a joke, he referred to one of his products as “total crap” (not his jewellery as has often been misquoted). This was jumped on by the press and Ratner became the poster boy of 1980s fat cats. If you want to hear the speech check out this link:

https://www.youtube.com/watch?v=Nj9BZz71yQE

The story is one of redemption though and Gerald Ratner would go on to create a successful health club and online jewellery store. What I like about this book is that Gerald faces the speech head-on. As you’re reading it you feel his pain and you can only imagine what it must have been like to have felt like you’d destroyed everything your family had built.

These are my lessons from what is a wonderful book:

1. Family business: The book really details what it’s like to be in a family business. How consuming it can be and how often all conversations at the dinner table end up being about the company (something I lived growing up – but then I loved it like Gerald Ratner). Unfortunately, his family often fell out. The lesson, be very sure before you get into business with family. It’s a credit to Gerald that he admits the breakdown in his 1st marriage was largely down to him and his obsession with the business. You tell early on in this book he's able to take a good look at his own mistakes!
2. Take opportunities don’t wait to be asked: Many people will talk about not being where they want to because they did get the opportunity, and it not being fair. What I liked about Gerald’s narrative of his own career was that he just took opportunities when he saw them and didn’t wait to be asked. Sometimes this can upset the apple cart but often it’s the quickest way to get ahead.
3. Read the room (and the time): Gerald admits that he misread the time. The speech that got him into trouble was one he'd made many times before. He was a product of the opulence of the 1980s but all that had changed by the 1990s and Capitalism at all costs was becoming socially less acceptable, or at least flashing it the publics’ faces was less acceptable. A speech like his may have worked in the 80s but by the 90s it should have been considered outdated, brash and out of touch - something that he accepts.
4. Losing control of the narrative: Much of Gerald’s speech has been misquoted or taken out of context. But the trouble is that once you are taken out of context you lose control of the truth. There’s no doubt that is what happened here. Unfortunately, this is what makes most speeches boring and stale but also why it’s so important to think hard about what you’re saying and the business risk of getting it wrong.
5. Time heals: Ultimately Gerald Ratner can be considered a success. In 1992, you’d never had thought it. But it’s worth noting that time has a funny way of making things better so if you are going through a tough time in business or life – try not to believe it will last forever. Gerald Ratner managed to come back from what The National called "The number 1 PR disaster in history"!

Any new founder recommendations would be very gratefully received.

Until next month!