Gerald Ratner: From Crap Peddler To Dotcom Millionaire

September 9, 2008


When I heard that Gerald Ratner had written an autobiography, my first thought was, “Who on earth would waste money buying more crap from that pillock?”

If you’re from the UK, you may remember that Gerald Ratner lost everything in 1991. His downfall began when the tabloids reported that he’d said the jewellery he sold was crap, whilst giving a speech for the Institute of Directors. The headlines included “Crapners” and “You 24 Carat Mugs”.

Ratners was the largest jewellery retailer in the world. And at the time of the speech they had 2500 shops, 27,000 staff, sales of billions per year and profits of £125 million. But Gerald Ratner is living proof that there is such a thing as bad publicity. And his foolish words cost him almost everything, including his £650,000 a year salary.

I didn’t feel sorry for Gerald Ratner. I’d bought jewellery from the stores he owned, so I thought he deserved everything he got. But something drew me to his autobiography and when I read the cover, I noticed it didn’t just say “The Rise and Fall”. It actually said, “The Rise And Fall and Rise Again”. Well that piqued my curiosity and here’s what I discovered about Gerald Ratner.

Gerald Ratner Was Responsible For The Rise Of The Family Business To Begin With

I’d always assumed that Gerald Ratner was a spoilt kid, who’d been given a senior role in the family business, just because of who he was. In fact, Ratner was an enthusiastic child, who left school with no qualifications at 15 years old and worked his way up from the bottom.

At the time, Ratners was nowhere near as successful as it became in the Eighties. At one point, the family almost lost the business altogether. But Gerald Ratner turned the situation round, because of his quick thinking and his ability to see the point of view of others – even those who’d betrayed him.

Ratner’s Success Could Be Attributed To Three Things


Throughout his autobiography, 3 things stood out that contributed to Gerald Ratner’s success:

1) He Was Passionate About The Jewellery Business: In fact, Gerald loved it so much that despite what happened in the nineties, he’s gone back into it and now he’s the largest online jewellery retailer in the UK.

2) Gerald Ratner Surrounded Himself With Positive, Successful People: It’s no accident that Ratner and his two closest friends – Michael Green of Carleton Communications and Charles Saatchi of Saatchi & Saatchi all became hugely successful in business.

3) Ratner Made Big Decisions Quickly And Believed Anything Was Possible: From takeovers of other jewellers, to venturing into the American market; and later, setting up his own health club from scratch, when he had no money, Gerald Ratner made decisions quickly. And he didn’t worry about how he was going to raise the cash to do those things, until after he’d made the decision. He saw opportunities, not obstacles.

If Gerald Ratner Can Start Again From Scratch – Anyone Can Do It

I assumed that someone with a business as big as Ratners, couldn’t go under completely. But after reading his story, it was apparent that Gerald really was skint, after he was thrown out of Ratner’s.

Four years later, Gerald launched a health club – remortaging his house and raising the remaining capital through outside investment and a bank loan. And in February 2001, that business was sold for £3.9 million.

The sale gave Gerald Ratner the money he needed to start an online jewellery business and in 2004, he launched Geraldsonline.com. It is now the largest online jewellery store in the UK.

Gerald Ratner Recognised The Importance Of Trends

Ratner never actually said he sold crap, during that unfortunate speech in 1991. But he did make two jokes, referring to a decanter his stores sold as “crap” and saying that a Marks and Spencer sandwich would last longer than the 99p earrings he sold. According to one publicist, he didn’t actually do anything wrong, he just gave an eighties type speech in the 90′s.

During the eighties, consumers wanted to buy cheap jewellery that they weren’t worried about losing. But today, customers are looking for better quality and good value. Geraldsonline.com recognises that and it is reflected in the product range that Gerald Ratner offers.

Gerald’s lifestyle has also changed. In the eighties, Ratner lived a life of excess, with chauffeur driven cars and helicopters being the norm. His business also affected his first marriage, as he was always working and he eventually divorced from his first wife.

But today, instead of being chauffer driven around, Gerald cycles almost everywhere, on a superfast bicycle which will do up to 60mph. He works from home and instead of employing thousands of people, he deals with many aspects of the business himself, including replying to emails.

If you'd like to read Gerald Ratner's biography, you can get it here.
You can check out Geraldsonline.com here.

What do you think of Gerald Ratner’s turnaround story? Do you think anyone could turn things round as he did, or would they need to possess certain traits?

Related Reading

Oops I Sank A Business
From £1 Million To Bust – How To Turn Your Business Round Again
Have You Failed As Many Times As These Success Stories?
Business Success Is Only A Deathbed Away

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Comments

27 Responses to “Gerald Ratner: From Crap Peddler To Dotcom Millionaire”

  1. Authenticity In Business And Other Lies on September 9th, 2008 2:20 am

    [...] people. The truth is, some publicity can be so bad that it will kill your business. Just ask Gerald Ratner. Sixteen years ago, he was fired from the family business for telling the media that Ratners sold [...]

  2. Vered - MomGrind on September 9th, 2008 2:54 am

    I think Donald Trump did a similar thing? These people are obviously hugely talented and driven. I don’t think anyone could do what they have done.

    Vered – MomGrind’s last blog post..You Read Women’s Magazines? I’ll Give You Ten Reasons To Stop

  3. Alex Fayle on September 9th, 2008 7:19 am

    I also think that having proven they can make money once, banks and investors are willing to throw money at them again. Most of us, however, investors would look at and laugh…

    Alex Fayle’s last blog post..Trapped in the Day-to-Day: Urban Panther Interview Part 1

  4. Annette Werk on September 9th, 2008 7:45 am

    You say Geraldsonline.com. it is now the largest online jewellery store in the UK, is that an assumption?

    Only I suspect that DiamondGeezer.com recently seen on the BBC program Dragons’ Den is larger.

    Certainly they seem to sell at a much higher level.

  5. Robin on September 9th, 2008 7:50 am

    Hi Cath – I found that story inspiring and interesting – as I usually do with stories about how someone built up a business.

    I think he probably had some skills right from the start – only he knows if he is rising to the best challenges for him. (I mean, someone might be good at business, but really the challenge for them might be to learn to foster intimacy in their life, or something). My thoughts!

    Robin’s last blog post..Feelings Are There To Be Felt

  6. Tara on September 9th, 2008 8:49 am

    I think some people just have that business X factor. They have it hardwired into their personality almost and can turn their hand to anything. I wish I was someone like that – maybe I am but just haven’t realised it yet cause I’ve spent so much time changing nappies and organising children’s parties!

  7. Brad Shorr on September 9th, 2008 12:10 pm

    Some people have a knack for business, and when they work very hard and catch a few breaks, they can accomplish just about anything. I don’t know about this Ratner fellow, but he does sound a lot like our Donald Trump. One quality that business naturals have is resilience. You just can’t discourage them! Few people have that ability.

    Brad Shorr’s last blog post..What I Learned from My Friends about Advertising

  8. cathlawson on September 9th, 2008 2:21 pm

    Hi Vered – I don’t remember the full Donald story but he was in an amazing amount of debt and I can’t imagine any ordinary person pulling themselves out the way he did. So, I’m guessing you’re right – I don’t think just anybody could do what either of them have done.

    Hi Alex – I would have thought that too. But Gerald Ratner ruined his reputation over here to the extent that it wouldn’t have been that easy to get financial backing for anything.

    I think it was the seventh bank he visited that lent him the money. And I’m betting a lot of folk would have given up before they’d gone to the seventh bank. So, I don’t think it was financial backing that helped him get back on his feet.

    Anita – That isn’t an assumption. That is what is said in Ratner’s book. I’ve removed your link to your blog as commentluv would automatically link to you if you filled out the form correctly. And I’m assuming you do work for Diamond Geezer, because you’ve posted on their blog.

    I think it depends what you mean by bigger. I hadn’t watched that episode of Dragon’s Den, so I took a look at it now. And Diamond Geezer only made £3423 profit from a £1.6 million turnover last year.

    I know Gerald Ratner did over a million turnover but I don’t know what his profits were.

    One thing I noticed about your blog that really needs changing, is a link to your site where you actually sell the diamonds. I clicked all over the header and there was no link. In the end I found a tiny link at the bottom of the page. A lot of people would have given up looking before then. You might want to get whoever designed your site to fix it.

  9. cathlawson on September 9th, 2008 2:38 pm

    Hi Robin – It was a really inspirational story wasn’t it. That’s a good point you make. I suppose it depends what his challenges are. I’m lucky as Akemi told me my main one in my soul reading. Another good reason to have a soul reading I guess.

    Hi Tara – Do you think they’re born with it, or maybe it could be learned? IMHO changing nappies and organizing children’s parties etc can be far more stressful than running a business a lot of the time.

    Hi Brad – resilience is important isn’t it? If you don’t give up, you get those breaks eventually.

    Hi Rita – The eighties was a decade of greed wasn’t it? I think the novel: The Bonfire of The Vanities captures the essence of that time really well. I’m betting you’ve read it. Now if he’d made that speech earlier, he’d probably have got away with it. But as you mentioned the listening audience had changed.

    I know by the time I heard about it my mortgage interest had gone up to almost 14%, so I wasn’t amused to learn that I’d bought crap jewellery too.

    I know you will love the Ratner autobiography, as you sell jewellery. As you say – he definitely has stickability and I’m suspecting it has something to do with mistakes he’s made too.

  10. Raj Krishnaswamy on September 9th, 2008 5:00 pm

    Very interesting reading. I agree that whether it be Donald Trump or Gerald Ratner or Dhirubai Ambani or Anil Mittal or Sam Walton, these business magnets seems to have something special in their thought process that allows them to succeed even after meeting with failures. May be modern genetic engineering can de-code that special gene and may be sell it in a bottle to those that lack it! Like you have hinted, there is a tremendous level of courgage that Ratner has demonstrated and my appreciation goes to him. Thank you for an uplifting article.

    Raj Krishnaswamy’s last blog post..Thermal spray blog layout

  11. Tom Volkar / Delightful Work on September 9th, 2008 5:54 pm

    I’ve never heard of him before this but liked reading his story. Anyone who makes decisions quickly and has big beliefs at least can put himself or herself in position to succeed in a big way. Those are outstanding and practically necessary entrepreneurial characteristics.

    Tom Volkar / Delightful Work’s last blog post..Believe It Or Not

  12. Stephanie on September 9th, 2008 6:47 pm

    Ok, that’s a scary thought, that someone whose story somewhat reminds me of the owner of the jewelry store I used to work at could have a comeback. Just thinking of my old boss and his lousy taste coming back… ugh!

    His first name was Bob, so the worst junk was always called ‘Bob-les”.

    But they let me do homework when it was quiet, which was a nice perk for a college student.

    Seriously, it’s amazing the comebacks people who are really motivated can have. Even the worst downturn can’t ruin such people.

    Stephanie’s last blog post..4 Simple Home Business Mistakes

  13. chris on September 9th, 2008 7:19 pm

    I guess when you are not afraid of failing, all is possible. Every successful businessmen and athletes have short term memories. They succeed, they fail, and they move on, never stopping to wallow in their miseries.

    chris’s last blog post..A Letter To Me

  14. Ellen Wilson on September 9th, 2008 8:08 pm

    Cath,

    Love this, “pillock” What does it mean? Is it like asshole?

    Some people have a real knack for this stuff – it’s just part of their personality.

    I never considered myself a business person, I always considered myself a writer/photographer. Now I realize I am also a business person. I am not entirely comfortable with this. I’ll get over it I guess.

    I suppose, when I think of it, is the spit I’ve assigned to artists versus business people. I guess I won’t get into it or I’ll be writing pages. Maybe I’ll do a blog post on it!

    Anyway, I think the Importance of Trends is key. If you can do that, and have the other personality traits, you should do alright.

    Ellen Wilson’s last blog post..My Social Experiment: RSS Numbers

  15. cathlawson on September 10th, 2008 1:30 am

    Hi Raj – Thank you. The folk you mentioned definitely seem to be able to overcome anything don’t they. I guess you’ve got to have the attitude that you haven’t failed unless you give up trying.

    If someone could bottle that gene, I’m betting they’d charge a fortune for it.

    Hi Rita – I’d forgotten about that Wall Street film – that was excellent and a great example of that decade. There seemed to be so many opportunities back then. I often wish I’d been 5 years older, then I’d have been able to take advantage of them.

    Hi Tom, I figured a lot of people wouldn’t have known him. I think the American stores he owned were called “Sterling” – he didn’t change the name.

    I totally agree – thinking big and making decisions quickly, really is essential to get ahead isn’t it?

    Hi Stephanie – Am LMAO at the Bob-les stuff. Did he actually put that label on the cheap stuff?

    Hi Chris – that is a good point. The ability not to let your cock ups affect what you’re doing now is probably really important.

    Hi Ellen – Pillock isn’t as offensive as asshole. It’s something I would call someone if they screwed up. I usually save asshole for people I don’t like, if that makes sense.

    That’s interesting that you’re uncomfortable with the term business person. I wonder if a lot of people feel like that?

    Hi Rita – Does jewellery really have the reputation for being a thief’s business? I didn’t know that. It would be a good tagline on your business cards though.

  16. cathlawson on September 10th, 2008 4:21 am

    Hi Rita – 20% is a lot more reasonable than 300% mark-up. I didn’t realize that some of them charged that much.

    Maybe you could try to sell of your stock in the run up to the holiday season?

    Scary is sometimes good. Whenever I’m going to try something new, I sometimes get that feeling of being a little bit scared – but it’s usually those times that turn out good.

  17. Al at 7P on September 10th, 2008 4:21 am

    Hi Cath – although Gerald Ratner sounds like a bit of a jerk, his feat to climb back to the top is indeed impressive, and it sounds like he appreciates it more the second time around.

    I think everyone has the ability to turn it around, but not everyone will have the courage or faith to put up their own home as mortgage to start the turnaround.

    Al at 7P’s last blog post..What’s More Important: Who You Are or What You Do?

  18. cathlawson on September 10th, 2008 4:25 am

    Hi Al – sorry if he comes across as a jerk in what I’ve written. He sounded like a nice enough guy in his book.

    That is a good point re: ability. Maybe most people have it, but as you said – you need to have courage and faith too.

  19. Barbara Swafford on September 10th, 2008 6:29 am

    Hi Catherine,

    I don’t think ANY person could do the same as Gerald Ratner, but I do think his story gives some people hope. I’m betting he learned a lot from his “fall”, and those lessons will carry him well into the future.

    Barbara Swafford’s last blog post..Digging Close To Home

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  21. cathlawson on September 10th, 2008 11:31 am

    Hi Barbara – I know wht you mean. I’m guessing he must have learnt a lot from it. I think it was amazing that he bounced back. As well as being skint he was probably the least employable person in the UK for a long time.

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  27. Las Vegas homes for rent on January 21st, 2010 7:55 pm

    ever since taking some entrepreneurship classes in HS and college and tons of watching Donald Trumps show, the apprentice, I have been fascinated in hearing stories about people starting up new businesses. Thanks. And I agree with Alex Fayle’s post.

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