Pedal power: Gerald Ratner credits cycling with easing his depression after he lost his business
Gerald Ratner likes to play it for a laugh. And my word is he’s funny. Screaming, side-splitting. With his bone-dry humor and deadpan manner, it’s only his sparkling eyes that betray that he’s playing with you.
Ratner’s exuberance may have come from the bombastic jewelers and diamond dealers around Spitalfields and Holborn in London that surrounded him during his childhood.
His father was from the East End, but Ratner, born in 1949, grew up in leafy Richmond. He joined the family jewelry company Ratners Group in 1966 and worked his way up to CEO in the 1980s.
Ratner rose to the top during an era of fast money when London was booming. He was a man of the city, drove a Rolls-Royce and associated with other wealthy young men such as Michael Grade and the Saatchi brothers.
“We had Margaret Thatcher, we had a government that was friendly to business and there were young people who had a lot of money to spend, unlike today,” he says.
But Ratner’s career was as high as his partying. During his tenure, the company became the largest jeweler in the UK. It listed on the London Stock Exchange and he used this new market entry to complete a number of merger deals, including H Samuel and Watches of Switzerland.
At its peak, the group had 2,500 stores, including 1,000 in the US, generating sales of nearly £200 million a year.
However, it was Ratner’s signature humor that would also be his downfall. Exactly 32 years ago, on April 23, 1991, his world came crashing down when he told a deviant joke during a speech at an Institute of Directors conference in Albert Hall.
“We also have cut glass sherry decanters complete with six glasses on a silver plated tray for your butler to serve your drinks on, all for £4.95,” he said in the speech, preparing for his punchline. “People say, ‘How can you sell this for such a low price?’ I say, ‘Because it’s total bullshit.’ ‘
He was quick to add that “an M&S shrimp sandwich” outlasted most of the earrings he sold.
He didn’t know there was a Mirror journalist in the audience. His comments were on the front of the paper and he lost his empire overnight.
What on earth possessed him? ‘My wife told me not to do it. She is annoyingly always right. We’ve been married 33 years and she’s rarely wrong, even if you don’t want to hear it.’
The fallout severely affected Ratner, who lost his fortune and job, sending him into a depression and unable to get out of bed for years.
Losing a business – especially a successful family business – can be crushing. Many do not recover. But not Ratner. He says cycling saved his life, adding that the drugs he was taking for his depression only made his situation worse. ‘I used Prozac, it takes away your sharpness and willpower. It didn’t do me any good for me. But I saw the benefits of cycling, it eased the depression. I still cycle 40 kilometers a day while listening to music.’
By 1996, Ratner was out of bed and back on his feet, deciding to start a health club which he sold in 2001 for £4 million.
Today, at the age of 73, he’s still not retired, with jobs including a time on the after-dinner speaking circuit where he charges between £4,000 and £6,000 per appearance. And he doesn’t mince words when he says it’s his generation that’s responsible for the UK’s slow growth.
He thinks that far too many people are taking early retirement – a phenomenon that Chancellor Jeremy Hunt is also trying to reverse by removing the limit on pension savings.
Ratner is particularly annoyed by the gilded pensions, which allowed people to leave the workforce after age 50.
He explains: ‘It is not the intention that a pension should last longer than your working life. When you go to the golf course with all your buddies, ex-British Airways pilots and cops in your Jaguar and pink Pringle jersey and tell bad jokes to each other, it’s annoying.”
He adds, “It’s just masturbation. We have a stupid system that pays you to retire. It is not fit for purpose and that is why all the old people have the money and the young have nothing.’
In addition to being a speaker, Ratner also advises start-up companies.
When it comes to retail, he is shrewd, sharp and insightful, saying many high street shops are struggling because they are run by accountants. As a result, retailers are too focused on cutting costs rather than investing in the business.
‘You have to continuously invest in new products, new shops, and the more money you invest, the more you get out of it. Now it is the opposite, there is a shortage of cash and people are not investing and so they are not moving forward. George Davies, who created Next, had no idea about numbers, but he knew about retail. That’s what you want, someone with a gut feeling.’
He targets Sharon White on John Lewis, who is considering bringing in outside investment for the first time in its history.
John Lewis loses money because it’s run by someone who isn’t a retailer. She has no experience.’ He adds that John Lewis’ decision to terminate his retail credit card agreement with HSBC hurt the company. The store cards are now managed by the little-known financial company NewDay.
“By moving it, they lowered the credit limit,” he says. ‘That’s the worst thing you can do. The higher your credit limit, the more you can spend on your card. What possible reason was it? That’s why they lose money.’
However, John Lewis emphasizes that the vast majority of his customers have been given the same or a higher credit limit. It says that NewDay must rate each customer based on their current credit and affordability, and therefore cannot automatically match what was previously offered to them.
Ratner, on the other hand, is full of praise for Primark, the budget retailer of Associated British Foods, which is successful despite not having an online presence.
‘In business you can break all the rules. It doesn’t make sense, but their stores are full,” he says. ‘And because they are not online, it is even busier in their stores. When a store is busy, it attracts more people. When you see a store with crowds of people, you wonder what’s going on. It’s holding you back.
“When the store was empty, I used to say to the staff, ‘Put on your coat and pretend to be a customer.’ ‘
Ratner is now content and happy in his career – although I point out that if he stopped cracking jokes, he might not end up in so much hot water. Ratner agrees, but he can’t help it. He says, “Making people laugh got me in trouble and still does.”
Ratner admits that he stands out compared to most of the other bosses, especially the tight corporate types who seem to put City investors at ease.
“They want a pair of safe hands,” he says. “It was different in the ’80s, they wanted the characters.”
While the business world may praise these “boring” bosses, there should always be room for the Ratners as well.
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