Gerald Ratner joined his family’s jewellery business in 1966 and built it up into an incredibly successful high street chain during the 1980s.
The shops disrupted the formerly sober jewellery industry with their fluorescent orange posters that advertised cut price bargains.
The Ratners Group at the time consisted of Ratners, H. Samuel, Ernest Jones, Leslie Davis, Watches of Switzerland and over 1000 shops based in the US that included Kays.
People loved Ratners stores because they offered affordable products to the man and woman on the street. It was generally known as the place where working-class boys bought rings for working-class girls.
Life was great for Gerald Ratner as he enjoyed the trappings of success via a luxury lifestyle that included expensive cars, boats, houses and a personal relationship with the then Prime Minister Margaret Thatcher. Everything then unfortunately came crashing down on April 23rd, 1991 when he was invited to be a guest speaker at a dinner hosted by the Institute of Directors.
Upon being asked how it was possible for his company to sell sherry decanters for the extraordinarily low price of £4.95 in front of a 6000-strong audience of journalists and business people, he answered, to the amazement of those in attendance that included a significant number of his company’s shareholders:
“How can you sell this for such a low price? I say, because it’s total crap.”
To make matter even worse he also said that his company, “sold a pair of earrings for under a pound, which is cheaper than a shrimp sandwich from Marks and Spencer, but probably wouldn’t last as long.”
The media predictably had a field day and ran the story so often that any working-class boy worth his salt knew that in buying his working-class girlfriend ‘crap’ from Ratners, he would inevitably struggle to ‘get lucky’ going forward.
The company’s shares swiftly nosedived by £500 million (roughly £900 million in today’s money) in a matter of days. For reasons known only to himself, Gerald Ratner had managed to undo not only his entire life, but his family business empire in less than 10 seconds.
Mr. Ratner lost his job as well as his playboy lifestyle and the company had to do an about turn by renaming themselves ‘Signet Group’.
Ratner’s speech remains infamous in the corporate world as a stark example of the value of branding and image over quality. Such gaffes are often referred to in popular culture as “doing a Ratner” and Ratner quickly acquired the nickname “The Sultan of Bling” as a result of the debacle.
Ratner has since said in his defence that his remarks were not supposed to be taken seriously. He blamed the aggressive and deliberately wrongful interpretation of his comments by several media outlets for the severe consumer reaction that resulted in customers exacting revenge by staying away from Ratner shops in their droves.
In our opinion Mr. Ratner should be applauded for being honest with his customers about the quality of his company’s products. Here at The W1nners’ Club we’d never baulk at ‘doing a Ratner’ and would spare no opportunity whatsoever in telling you that our products are absolutely awesome!